KEY POINTS
- Nigeria loses N7–N10 trillion annually due to unreliable electricity, with additional spending on generators exceeding N3.7 trillion.
- Dependence on petrol and diesel for power generation links domestic energy costs to global oil price fluctuations, driving inflation.
- CPPE recommends boosting refining capacity, supporting renewable energy, improving public transport, and prudent oil revenue management to stabilize the economy.
The Centre for the Promotion of Private Enterprise, CPPE, has raised alarm over Nigeria’s chronic electricity supply issues, estimating that the country loses between N7 trillion and N10 trillion annually due to unreliable power. The warning was issued in CPPE’s latest policy brief, titled “Fragile disinflation amid escalating energy shocks: Urgent action needed to protect citizens and businesses,” authored by Chief Executive Officer Dr. Muda Yusuf.
According to CPPE, the persistent electricity shortfall is fueling inflationary pressures, reducing productivity across households and businesses, and increasing reliance on costly alternative energy sources such as petrol and diesel generators, which alone cost Nigerians over N3.7 trillion annually.
CPPE highlighted that the nation’s reliance on imported fuel for power generation links domestic energy costs directly to global oil price fluctuations. Rising energy costs have intensified transport expenses, a major channel of inflation, and threaten economic stability.
The group stressed that premature policy easing in the face of these structural weaknesses would be risky. It also noted that despite a marginal decline in headline inflation from 15.10 percent in January 2026 to 15.06 percent in February 2026, external shocks and high energy costs continue to pose significant risks to households and businesses.
Urgent policy measures needed
CPPE outlined several recommendations to address Nigeria’s energy crisis and reduce economic instability:
- Strengthen domestic refining capacity, including support for the Dangote Refinery.
- Ensure stable crude oil supply and favorable terms for local refiners.
- Expand investment in efficient and affordable public transport to lower transport-related inflation.
- Remove import duties and taxes on renewable energy equipment, including solar panels, inverters, and batteries.
- Prudently manage oil revenue windfalls to support foreign exchange reserves and productive sectors.
The group argued that these measures are critical to protecting citizens, businesses, and the broader economy from ongoing energy shocks and inflationary pressures.
Nigeria has struggled with unreliable electricity for decades, forcing households and businesses to depend on alternative energy sources.
This structural weakness has constrained industrial growth, limited competitiveness, and made energy costs a major driver of inflation. CPPE emphasized that without urgent and coordinated action, the economic losses linked to poor electricity supply could worsen further.
