Kehinde Fajobi
Nigeria suffers annual economic losses of $26 billion due to power shortages, according to the latest Africa Trade Barometer report by Standard Bank.
This figure does not include the estimated $22 billion that businesses spend each year on fuel for off-grid generators.
“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 USD 22 billion,” the report states.
The report highlights that Nigerian businesses face substantial operational costs due to unreliable electricity, noting, “In Nigeria, surveyed businesses must contend with a national grid that frequently collapses as it fails to meet a daily peak demand nearly four times its generation capacity.”
Power infrastructure challenges have become a severe obstacle for businesses across Africa.
“Across the 10 African markets, power supply infrastructure remains the most severe obstacle to surveyed businesses’ operations,” the report added, calling it “one of the most poorly perceived infrastructural attributes” for businesses.
Blackouts, according to the report, lead to “downtime in production, risk the quality of goods that require controlled environments, impact water supply, and affect telecommunications infrastructure which businesses may rely on for payments. The result is reduced sales and income.”
The report’s findings come amid a series of recent grid collapses in Nigeria, including three outages within one week this month.
The National Electricity Regulatory Commission (NERC) attributed one outage to a transformer explosion at the Jebba transmission station.
“Initial reports on the grid disturbance that occurred this morning indicate that today’s outage was triggered by an explosion of a current transformer at the Jebba transmission station at 0815hrs and an associated cascade of power plants shut down arising from the loss of load,” NERC reported.
In response, the House of Representatives announced plans to investigate the frequent national grid collapses impacting the country.