With power supply being one of the major business constraints in Nigeria according to the Central Bank of Nigeria (CBN), it has been revealed that Nigerians spend about $14 billion on generator and fuel yearly in order to prevent their businesses from crippling.
For years, the generator has served as an alternative source of power for Nigerians, as the country experiences unstable and poor power supply. This has led to an increase in the generator budget for many households and businesses within the country.
The amount spent on generator and fuel by Nigerians was revealed by the Director in charge of the African Development Bank (AfDB) in Nigeria, Ebrima Faal who stated that it would have a negative impact on the power sector.
The $14 billion shows an increase in spending and proves power supply in Nigeria is not getting better despite the privatization, as Nairametrics reported last year that Nigerians spent about $12 billion fueling generators.
In order to improve the power sector, Nigeria privatized the power sector, leading to the creation of 12 distribution companies (Discos), but year in year out, both the government and the Discos have continued to blame each other for the poor power supply.
The increase shows businesses struggle to remain in business, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, said in a report by The Nation.
He said spending on a generator is unavoidable even though it’s increasing the cost of operation and affecting contribution to the Gross Domestic Product (GDP) of the country.
“The costs incurred to provide alternative sources of power are inevitable if industrialists are to remain in business in Nigeria. This, perhaps, is the biggest single factor impeding the growth of industrialization.
“The issue has made our industries very uncompetitive in recent times. That is one of the reasons our industries cannot produce export unlike their counterparts abroad. Also, our industries contribute less than 10 percent of the country’s Gross Domestic Product (GDP.)”
