NIGERIA incurs an estimated annual loss of $26 billion due to power failures, according to the latest Africa Trade Barometer report.
This figure does not include the costs associated with off-grid generators.
“Economic losses due to Nigeria’s electricity shortages are estimated at USD 26 billion annually, excluding the additional USD 22 billion spent on fuel for off-grid generators,” states the report by Standard Bank.
It highlights that businesses in Nigeria spend around $22 billion annually on off-grid fuel to counteract power shortages, significantly increasing operational expenses.
“In Nigeria, surveyed businesses face a national grid that frequently collapses, unable to meet a peak daily demand nearly four times its generation capacity,” the report notes.
Electricity supply is identified as a major hurdle for business operations in Nigeria and across Africa.
“Among the 10 African markets surveyed, inadequate power infrastructure is the most severe obstacle for businesses,” the report states.
The report further details the negative impacts of power outages, including production downtime, risks to goods requiring controlled environments, disruptions to water supply, and interference with telecommunications, which many businesses rely on for transactions—leading to reduced sales and income.
This report follows several recent national grid failures in Nigeria, with three collapses occurring within a week.
The National Electricity Regulatory Commission (NERC) attributed the latest outage to a transformer explosion at the Jebba transmission station, causing a cascade of power plant shutdowns due to load loss.
The House of Representatives has announced plans to investigate the frequent national grid failures.
