• MSMEs spend $3.5B yearly on generator power in Nigeria
• Generator costs consume up to 40% of business expenses

Nigeria's national power grid collapsed on Wednesday, the Nigerian Independent System Operator (NISO) reported, echoing the frequent outages that have plagued the country's electricity sector over the past year.

The recurring blackouts underscore the high cost of generator dependence for Nigerian businesses and households. Due to the unreliable public supply, companies, homes, and government offices are forced to spend significant resources on diesel and generator maintenance.

According to Sustainable Energy for All (SEforALL), micro, small, and medium-sized enterprises (MSMEs) in Lagos alone spend an estimated 5.3 trillion naira annually to power their generators. This amount, more than $3.5 billion, is nearly 10% of the country's approved 2025 federal budget of $36.6 billion, based on official figures.

These expenses directly impact profitability and limit the competitiveness of economic activities. A 2024 study by the Rocky Mountain Institute (RMI), a U.S.-based energy think tank, found that backup power costs can consume up to 40% of some Nigerian companies' total expenditures.

This situation persists even as the diesel generator market, valued at $547.8 million in 2023 by TechSci Research, a global consulting and research firm based in India, remains largely dependent on imports. In 2024, nearly 70% of imported generators came from China, valued at approximately $195 million, according to Intelpoint, the data and research arm of Techpoint Africa.

While NISO claims to have restored a substantial portion of the grid following the September 10th outage, the persistent power failures continue to impose a massive direct cost on the Nigerian economy. Promised investments to stabilize the grid and diversify energy sources are still awaited.

Abdel-Latif Boureima