Nigeria Losing Up to N10tn Annually to Power Shortages — CPPE

Nigeria is losing between N7 trillion and N10 trillion annually due to unreliable electricity supply, according to the Centre for the Promotion of Private Enterprise (CPPE).

The disclosure was contained in the organisation’s latest policy brief titled “Fragile disinflation amid escalating energy shocks: Urgent action needed to protect citizens and businesses,” signed by Dr. Muda Yusuf.

The group warned that persistent power shortages are intensifying inflationary pressures and weakening productivity across both households and businesses.

“Nigeria’s exposure to energy-driven inflation is intensified by structural weaknesses in the domestic economy.”

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“Estimates indicate that unreliable electricity imposes annual economic losses of between N7 trillion and N10 trillion, while spending on generators exceeds N3.7 trillion annually.”

“The heavy reliance on petrol and diesel for power generation, due to unreliable electricity supply, creates a strong and immediate pass-through from global oil prices to domestic inflation.”

“The resurgence in monthly inflation and the emergence of external shocks suggest that premature policy easing would be risky.”

“Transport costs have become a major channel of inflation transmission, and easing this burden would provide immediate relief to households.”

The CPPE emphasised the need for urgent and coordinated policy action to prevent further economic strain.

Nigeria’s long-standing electricity challenges have forced widespread reliance on alternative energy sources, increasing exposure to fluctuations in global oil prices. Energy costs continue to influence production, transportation, and overall price levels, limiting industrial growth and competitiveness.

To address the crisis, the CPPE recommended strengthening domestic refining capacity, ensuring stable crude supply to local refineries, and expanding investment in public transportation.

It also called for the removal of import duties on renewable energy equipment such as solar panels, inverters, and batteries, alongside prudent management of oil revenues to support foreign exchange stability and productive sectors.