5 Ways Power Shortage Is Affecting Nigerian Businesses


By Adeniyi Ogunfowoke

The World Bank data on ease of doing business released this year ranked Nigeria 169 out of 190 countries. Ten sub-indices were used for this ranking such as starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. One sub-indices that many Nigerians can relate with is electricity. Although all Nigerians are feeling the effects, businesses are feeling it more. Jumia Travel identifies 5 ways power shortage is affecting Nigerian businesses.

Huge amounts are budgeted for diesel and generator

There is no way any business can run smoothly without having a generator notwithstanding if it is a startup or an established business. The budget for generators, diesel as well as servicing these generators is humongous. These monies, if there is no power interruption, can be deployed to other aspects of the businesses.

Startups are likely to fail

Many young Nigerians have ventured into the uncertain world of entrepreneurship despite the recession. They have satisfied all the constitutional requirements for setting up a business but they have to still a factor in how to provide electricity. Over time, you will observe that some of these great startups are likely to fail due to power shortage. They can only do as much.

Businesses cannot employ

If electricity can be tackled in Nigeria, the monies companies spend on providing power can be used to employ more Nigerians. This is a part reason why some companies prefer to use contract staff.

 No room for growth or expansion

Growth and expansion are essential to any business. The more businesses spend on electricity, the more they cut back on growth. Combining power shortage with the economic recession, some companies have no choice than to lay off some of their workers.

Businesses are moving out

Nigeria is the biggest market in Africa. At the same time, it has the biggest challenges. Some of them have decided to continue running their businesses in the country, others have made the decision to move their operations to other countries while maintaining a little presence in the Nigeria.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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