The Standard Bank’s Africa Trade Barometer research estimates that Nigeria’s ongoing power problems cost the country $26 billion a year.
 Businesses in the nation spend almost $22 billion a year on off-grid fuel to counteract the effects of unstable electricity, which raises operating costs even more, according to the research.
It said: “In Nigeria, surveyed businesses must contend with a national grid that frequently collapses as it fails to meet a daily peak demand which is nearly four times its generation capacity. Economic losses arising from Nigeria’s electricity shortages are estimated to be USD 26 billion annually, without accounting for spending on fuel for off-grid generators, which is estimated to be a further USD22 billion.”Â
In Nigeria and other African markets, the availability of electricity was found to be a significant obstacle to corporate activities.
According to the paper, power outages have a significant impact on production, water supply, telecommunications infrastructure that is essential for payment systems, and the quality of temperature-sensitive commodities. Businesses experience lower sales and revenue as a result of these disruptions.
“Power supply infrastructure continues to be the biggest barrier to the operations of surveyed enterprises in all ten African markets. It is said to be the most significant barrier to corporate operations and one of the least appreciated infrastructure features.”
“Blackouts impair the water supply, disrupt production, jeopardise the quality of products that need controlled settings, and disrupt the telecommunications infrastructure that companies can depend on to make payments. Sales and revenue are down as a result,” it said.
The analysis underlined the necessity of a diverse energy mix to mitigate these issues and lessen reliance on the national grid. In order to stabilise electricity generation and draw investment into renewable energy options, it also called for policy actions.
What To Note
According to a recent report by the Association of Power Generating Companies (APGC), the national grid has failed 162 times in the previous 11 years.
After the first failure on February 4, the national grid fell for the eighth time in 2024 on October 19.
Minister of Power Adebayo Adelabu declared that the government saved almost N1.4 trillion a year when Band A customers’ electricity subsidies were eliminated.
Nonetheless, there are still a lot of obstacles facing the electricity industry.
Inadequate funding, antiquated infrastructure, and limited liquidity still make it difficult for DisCos to effectively satisfy rising customer demand. Inadequate financing is causing many DisCos to struggle with network upgrades, metering system improvements, and power loss reduction. Due to these problems, the industry has found it challenging to meet customer expectations for dependability and service quality.
These persistent issues are the focus of President Tinubu’s current administration’s reform strategy. The government’s commitment to eliminating subsidies completely and making sure that tariffs accurately represent the cost of producing and distributing power has been reaffirmed by Minister Adelabu.
In order to increase capacity and service delivery, the reform plan also outlines initiatives to draw in private investment.
Prior to this, THE NEWS CHRONICLES reported that under President Bola Tinubu’s government, Nigeria had obtained at least $1.25 billion in loans from the World Bank and the African Development Bank (AfDB) to increase its electricity supply.
The $750 million Distributed Access through Renewable Energy Scale-up (DARES) project in Nigeria was approved by the World Bank on December 14, 2023.
More recently, on July 31, 2024, the Federal Republic of Nigeria received approval for a $500 million loan from the African Development Bank Group (AfDB) to help upgrade the nation’s electrical infrastructure and increase access to greener energy sources.
Prior to Bola Tinubu taking office, Nigeria also obtained permission for around $2 billion in loans from multilateral institutions, including the World Bank.
Nigeria’s electricity supply is inadequate, and the power sector continues to struggle despite all of the loans that have been granted for the country.
