Tiny generators known to power the homes of the least wealthy households and shops of the smallest businesses in Nigeria’s commercial capital, Lagos, have gone out of reach for many amid a rapid price surge.
“I better pass my neighbour,” the phrase used to describe the generators, now make their owners not only better than his neighbour but the entire neighbourhood.
The price of the generators, a vital household appliance in Africa’s most populous nation, due to unreliable public power supply, has jumped 40 percent to N140,000 this year from N100,000 in February 2023.
In the last two decades the price of the tiny generators, with less than 1KVA capacity, has surged more than tenfold from N10,000, showing how hyperinflation and other factors are putting basic commodities out of the reach of many Nigerians.
Blessing Abeti, a resident of Ikeja struggling to keep her small salon running, recently discovered the shocking new cost of a generator.
“N140,000! I nearly fainted,” she said on X formally known as Twitter. “Before, it was a way to show you had a little extra. Now, it’s about survival.”
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Abeti’s story is a common one. Erratic power cuts have made generators indispensable for homes and businesses alike. The once-coveted status symbol has become a vital tool for navigating daily life.
“The price of generators has almost doubled in a year. People are buying anyway because they have no choice,” Funsho Abiodun, a generator dealer, told BusinessDay.
Data obtained from the United Nations International Trade Statistics Database (UN Comtrade) revealed that Nigeria has allocated a staggering $2.4 billion towards the procurement of generating sets over the past 26 years.
UN Comtrade, renowned as the foremost repository of global trade statistics, documents Nigeria’s imports of generators from 1996 to 2019. The apex of this expenditure occurred in 2013, with the country importing generating sets valued at $262.5 million, marking the highest expenditure in two decades.
For Hakeem Aliyu, a barber and cooking gas retailer in Lagos, getting a new generator to change the ailing one is a luxury he can’t afford. “I am still managing the small generator I bought in 2015 because the price of the same generator in the market is too much.”
Aliyu mentioned that he acquired the comparable generator set for N15,000 nine years ago. The barber intends to maintain and manage the current one.
The latest Nigeria SME Survey conducted by PricewaterhouseCoopers reveals that electricity expenses rank as the primary operational cost, trailed by rental and capital expenditures.
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A market analysis indicates that the prices of compact petrol generators surpass the N100,000 mark. Certain independent sellers on the online shopping platform Jumia offer the Tiger TG1200/1550 model for N145,000.
The latest report from the Access to Energy Institute (A2EI), a German-based energy think-tank, forecasts steady annual growth of three percent in the small generator market until 2030. This market, estimated at 22 million units in 2018, is anticipated to expand to cater to the demands of a burgeoning population and economy.
A2EI said an anticipated surge in product demand, estimating an increase of eight million units by 2030. The report highlighted that the primary drivers behind this escalation are the projected population growth rate of 2.5 percent annually. This surge will result in heightened demand from both households and small businesses.
In addition, the report noted that rising incomes will empower a larger segment of the population to acquire generators, either as initial purchases or as supplementary backup options for existing ones.
Last year, the International Renewable Energy Agency (IRENA) identified Nigeria as Africa’s foremost importer of premium motor spirit (PMS) and diesel generators.
The Agency made this known in its report titled ‘Renewable Energy Roadmap: Nigeria,’ jointly developed by IRENA and the Energy Commission of Nigeria (ECN).
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According to the report, Nigeria’s on-grid electricity generation relies heavily on natural gas power stations, constituting 86 percent, alongside substantial contributions from large hydropower plants at 14 percent.
However, issues such as gas unavailability, machinery breakdowns, seasonal water shortages, and constrained grid capacity have severely impeded the operational efficiency of these facilities, consequently undermining the overall power supply.
Persistent power shortages have forced numerous households and businesses to rely on self-generated power, turning to diesel and petrol generators as alternative sources.
According to IRENA, a staggering 84 percent of urban households employ backup power solutions like fossil diesel or gasoline generators, while 86 percent of Nigerian businesses either possess or jointly utilise a generator.
“Given the several million captive generators imported into the country, Nigeria leads Africa as the highest importer of generators and is also one of the largest importers worldwide. Nigeria’s erratic power supply systems and the relatively expensive captive generation negatively impact the economy from the residential to the industry sector.
“Owing to the high costs of captive generation, households and small and medium-sized enterprises spend between two and three times more on kerosene, diesel and petrol than they do on electricity from the grid. In industry, government figures suggest that the cost of self-generating power makes Nigerian products approximately one-third more expensive than imports.”
