Standard Bank’s recent Africa Trade Barometer report underscores the severe economic toll of Nigeria’s electricity shortages, estimating losses of approximately $26 billion annually.
As businesses grapple with unreliable power supply, they collectively spend around $22 billion each year on off-grid fuel solutions, adding significant strain to operational costs and deterring investment.
According to the report, the country’s fragile national grid collapses frequently, meeting only a fraction of the daily peak demand. This forces companies across sectors to rely on costly, polluting generators to keep operations afloat.
The economic repercussions of the electricity crisis extend beyond lost revenue, affecting sectors reliant on temperature-controlled environments, secure water supplies, and stable telecommunications.
Bank highlights that power outages are particularly disruptive for industries dealing with perishable goods, as well as businesses dependent on uninterrupted digital payments.
The downtime, coupled with mounting production costs, directly impacts businesses’ revenue, threatening Nigeria’s overall economic stability.
Energy analysts agree with the report’s call for an urgent shift toward a diversified energy mix and policy interventions to stabilize the electricity sector.
According to renewable energy expert, Professor Ijeoma Agbo of Lagos University, “Nigeria’s dependence on a single, outdated grid system is unsustainable. The government must incentivize renewable energy investments and foster a mixed energy model to ensure resilience.”