Nigeria loses $26bn annually to power failures, says Standard Bank

.Says naira depreciation disrupting businesses

Nigeria is losing $26 billion annually to power outages across the country, according to Standard Bank.

In its ‘Africa Trade Barometer’ report, Standard Bank said electricity supply is a major barrier to businesses in Nigeria and across Africa, noting that firms in Nigeria spend about $22 billion yearly on off-grid fuel to offset the impact of unreliable electricity.

The report said this is raising operational costs of businesses in Nigeria.

“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 said.

The report said power cuts reduce productivity in the nation, disrupting production, water supplies, and  telecommunications infrastructure.

“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.

“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 stressed the need for a diversified energy mix to reduce dependence on the national grid, noting that the government must intervene in the electricity sector to stabilise generation.

The report further noted that there has been a significant decline in business confidence in Nigeria on the back of naira depreciation.