The Kano Electricity Distribution Company (KEDCO) has said that about 90 percent of the 82 months of unremitted pension deductions owed to its workers were accumulated before its acquisition by Future Energies Africa (FEA) in November 2023, as it moves to defuse labour tensions with a structured repayment plan.
In a statement dated February 25, 2026 and signed by Sani Bala Sani, head of corporate communications, the company acknowledged that pension contributions deducted from workers’ salaries had not been remitted to Pension Fund Administrators over several years, describing the situation as a “fundamental breach of trust.”
“We inherited this mess and are working to clean it up,” the company said.
Legacy liabilities weigh on operations
Kano DisCo said the bulk of the pension backlog, spanning over six years, was incurred under previous management and core investors before FEA’s takeover.
“When Future Energies Africa acquired KEDCO in November 2023, we inherited a company burdened by years of systemic failures and financial mismanagement,” the statement said. “Approximately 90 percent of the current pension arrears accumulated under previous management and core investors before our acquisition.”
The company admitted that pension deductions were not remitted as required by law, noting that workers had been the primary victims of the lapse.
“This is not just a financial irregularity; it represents a fundamental breach of trust with employees who depend on these contributions for their future security,” it added.
The disclosure follows recent industrial actions that disrupted electricity supply across Kano, Katsina and Jigawa states, underscoring persistent labour pressures in Nigeria’s power distribution segment.
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Transition-year accruals acknowledged
While distancing itself from the origin of the crisis, KEDCO conceded that additional pension liabilities accrued during its first year under FEA’s management.
“Upon assuming control, FEA’s immediate priority was to stabilise KEDCO’s operations and arrest the company’s deteriorating business performance,” it said, citing efforts to improve service delivery, reduce technical losses and manage sector-wide liquidity constraints.
“While we focused on improving service delivery and addressing the liquidity crisis plaguing the entire Nigerian power sector, additional pension liabilities inevitably accrued during this critical transition period.”
Nigeria’s power sector has struggled with chronic liquidity shortfalls, weak collections, and mounting market debts, placing distribution companies under sustained financial strain.
80% of 2025 remittances paid
KEDCO said it has adopted a phased repayment structure to normalise current pension contributions while addressing the inherited backlog.
“To date, over 80 percent of agreed 2025 pension remittances have been successfully paid,” the company said, describing the payments as “tangible progress” toward restoring compliance.
Management said staff welfare and pension obligations have been elevated to priority status despite liquidity constraints.
Talks with labour, BPE
The company confirmed ongoing negotiations with the National Union of Electricity Employees (NUEE) and the Senior Staff Association of Electricity and Allied Companies (SSAEAC), alongside the Nigerian Labour Congress (NLC) and the Bureau of Public Enterprises (BPE).
According to the DisCo, discussions have produced two commitments, settlement of all post-acquisition pension obligations under FEA’s management, and agreement on a “clear, realistic timeline” for resolving the substantial pre-acquisition arrears.
“Given the magnitude of these legacy debts, resolution requires a structured approach that balances employee rights with the company’s operational sustainability,” it said.
The company also disclosed that a no-victimisation clause had been agreed to protect workers involved in recent industrial actions.
Backing probe into alleged misappropriation
Kano DisCo said it is cooperating with ongoing investigations into how pension deductions were handled before the 2023 acquisition, following allegations of possible misappropriation by former core investors and management.
“We take seriously the allegations of potential pension fund misappropriation by former core investors and management,” the company said. “If investigations reveal that pension funds were misappropriated, we will support prosecution through appropriate legal channels.”
The distributor added that workers “deserve answers about what happened to their money” and pledged transparency.
Sector-wide implications
The development highlighted the lingering impact of legacy liabilities on Nigeria’s power distribution companies more than a decade after privatisation. Pension arrears, market debts and weak cost recovery continue to test the financial viability of DisCos, even as new investors attempt operational turnarounds.
For KEDCO, the immediate challenge will be sustaining improved remittance compliance while negotiating a politically sensitive repayment schedule for arrears that accumulated over multiple management cycles.
