Power Crisis Pushes Nigerian Businesses to the Brink

Industries Struggle with Soaring Operational Costs Amid Energy Shortages

by Oluwatosin Racheal Alabi

Businesses across Nigeria are expressing deep concern over the deteriorating power supply, which has significantly increased operational expenses (OpEx) and raised fears of potential shutdowns. Amidst this crisis, distribution companies (DisCos) have cited various reasons for the decline in power availability, leaving industries with no choice but to depend on costly diesel and petrol-powered generators to maintain production.

Chinedu Grace Otakpor-Azih, Managing Director of Kazih Kits Limited, voiced her frustration over the unsustainable energy costs impacting production. The company spends approximately N60,000 on petrol weekly, with diesel expenses even higher. The unreliable power supply has forced them to consider alternatives like gas to cut costs.

“The light situation is very poor, sometimes, there is no power for days. How can we remain productive like this?” Otakpor-Azih questioned, highlighting the economic strain and the impact on product pricing and quality due to rising operating costs.

Dapo Salau, a manager at Future Hope Interior Designs Limited, shared a similar plight, revealing that the company uses up to N25,000 in diesel daily. The unsustainable energy costs led to reduced production and layoffs. Salau fears that without improvement in the power supply, a complete halt in production might be inevitable.

Frank Ike Onyebu, the Immediate past chairperson of the Manufacturers Association of Nigeria (MAN) Apapa branch, lamented the deplorable power situation despite operating in an industrial estate. He described the current supply as “7/24,” meaning seven hours of electricity in a 24-hour period, at best. Onyebu criticized the outdated infrastructure and called for urgent reforms to avoid further damage to the manufacturing sector.

“In the last two weeks, we have used 30,000 litres of diesel, costing us N1,100 per litre. This is how much we are bleeding, and it will worsen if the power situation is not addressed soon,” Onyebu stated, highlighting the dire financial strain on manufacturers.

The consistent increase in operational expenses due to reliance on alternative energy sources is a pressing issue for Nigerian businesses. With the government and DisCos under pressure to provide sustainable solutions, industries are calling for immediate action to prevent further economic setbacks and potential shutdowns. The situation underscores the urgent need for infrastructure improvements and policy reforms to ensure reliable power supply and support the survival and growth of businesses across the country.

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