Nigeria reportedly incurs a yearly loss of approximately $26 billion due to power outages. According to the most recent Africa Trade Barometer report, this figure excludes costs related to 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 by Standard Bank said.
Businesses are estimated to spend nearly $22 billion each year on off-grid fuel to mitigate the effects of power shortages. This, in turn, increases operational expenses.
“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,” the report reads.
It highlighted that the availability of electricity poses a critical challenge to business operations not only in Nigeria but also across the entire African continent.
“Across the 10 African markets, power supply infrastructure remains the most severe obstacle to surveyed businesses’ operations,” the Standard Bank read.
“It is reported as one of the most poorly perceived infrastructural attributes as well as the one presenting the most severe obstacle to business operations,” the report added.
“Blackouts cause a downtime of 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 comes amid the constant collapse of the national power grid in recent weeks.
Earlier this month, many areas reported power outages following three grid collapses in one week.
The National Electricity Regulatory Commission (NERC) stated that this situation was caused by an explosion of a transformer at one of the transmission facilities.
“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 said.
The House of Representatives announced plans to investigate the continuous collapses of the national grid.