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Electricity supply efficiency in Nigeria: A case of electricity distribution companies

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  • Iyabo Adeola Olanrele

    (Nigerian Institute of Social and Economic Research)

Abstract

This paper examines the technical efficiency of electricity supply across eleven electricity distribution companies using the Data Envelopment Analysis (DEA). The analysis was performed with a recent and extended data from 2015 to 2019. The output indicator for calculating electricity supply efficiency is electricity supply proxy by energy received by each electricity distribution company. The input indicators are network losses (proxy by transmission losses) and aggregate technical commercial and collection losses (ATC&C). Empirical findings were reinforcing and in line with other findings in the literature. The results show that all electricity distribution utilities are technically inefficient in electricity supply to a varying degree. Four electricity distribution companies performed above 65 percent level of technical efficiency, while two operate at less than 70 percent. Thus, privatization has not eradicated technical inefficiencies in the electricity supply. The inefficiencies in the electricity sector are partly due to technical and commercial limitations

Suggested Citation

  • Iyabo Adeola Olanrele, 2022. "Electricity supply efficiency in Nigeria: A case of electricity distribution companies," Economics Bulletin, AccessEcon, vol. 42(4), pages 2054-2064.
    • Handle: RePEc:ebl:ecbull:eb-22-00167
    as

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    References listed on IDEAS

    as
    1. Bjurek, Hans & Hjalmarsson, Lennart & Forsund, Finn R., 1990. "Deterministic parametric and nonparametric estimation of efficiency in service production : A comparison," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 213-227.
    2. Md Kamrul Hossain & Anton Abdulbasah Kamil & Md Azizul Baten & Adli Mustafa, 2012. "Stochastic Frontier Approach and Data Envelopment Analysis to Total Factor Productivity and Efficiency Measurement of Bangladeshi Rice," PLOS ONE, Public Library of Science, vol. 7(10), pages 1-9, October.
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    More about this item

    Keywords

    Electricity supply; Technical efficiency; Data Envelopment Analysis; Distribution Companies; Nigeria;
    All these keywords.

    JEL classification:

    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • P1 - Political Economy and Comparative Economic Systems - - Capitalist Economies

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