Companies are paying more for ‘darkness’ as the power outage continues

For Ngozi Uzordike, owner of a popular financial consultancy firm, the dream of financial independence feels increasingly distant.

Rolling blackouts, a constant frustration for Lagos residents, have become a business nightmare.

Most Band A customers, who are expected to get at least 20 hours of power supply daily as they have to pay an exorbitant rate of N225 kilowatt per hour (KWh), are already complaining of poor supply.

Also read: Can’t escape the heat: Power outages make Nigeria’s heat wave unbearable

“We are on band A, but we are struggling to get two hours of uninterrupted supply; we need to apologize, reschedule appointments and hope they come back,” Uzordike said.

Uzordike is not alone. Companies across Lagos are paying a high price for the energy sector struggles.

The lack of power supply has increased production costs for many companies who have been forced to supply their electricity, usually using diesel generators as an alternative source of electricity.

While some who cannot afford to run their generators for at least 15 hours a day are already bankrupt, others who can are struggling with little patronage due to the costs associated with high fuel costs. interest, inflation, etc. on their goods or services.

DisCos, the electricity distribution companies, has come under fire for failing to provide consistent power despite customer complaints and high bills.

“We are on band A, but I can tell you clearly that we are actually paying for the darkness,” said Emeka Uka, who runs a fast food restaurant.

The unreliable power supply forces Uka and his cohorts to rely on generators, significantly increasing his operating costs.

“The generator is eating into profits, mainly due to rising fuel costs,” he explained.

The added burden makes it difficult to compete and forces it to consider raising prices, a move that could drive customers away.

The impact extends beyond financial pressure.

Unpredictable power outages disrupt workflows, leading to delays and lost productivity.

“Imagine that there is a machine halfway through a process and the power goes out,” says Zainab Mohammed, who manages a printing press. “The quality suffers and sometimes the entire job is ruined.”

The lack of reliable power creates a vicious cycle. Companies struggle to expand or invest in improvements, which hinders economic growth.

“Customers are frustrated and it is damaging our reputation,” Ngozi said. With every power outage, the dream of a thriving business seems further away.

A feeling of powerlessness lingers heavily. Many entrepreneurs express their frustration with the lack of transparency and responsibility of the DisCos.

Power supply at an all-time low

Nigeria’s electricity supply is currently at its lowest level ever. On social media platforms, Nigerians have complained about the epileptic power supply and on many occasions, they have pilloried Adebayo Adelabu, the country’s minister of power, accusing him of being clueless.

Nigeria has suffered from poor power supply for decades, a problem estimated by the World Bank to cost companies around $29 billion annually.

The country has the lowest access to electricity globally, with about 92 million people out of the country’s 200 million population lacking access to electricity, according to the Energy Progress Report 2022, released by Tracking SDG 7.

Also read: Gas-rich Nigeria faces power outages as supply shortage widens

A 2021 World Bank report also revealed that a total of 74 percent of power users in the country are dissatisfied with electricity supply across the country, while 93 percent of metered power users paid their bills regularly, while 78 percent of electricity consumers paid their paid bills regularly. consumers in the country received less than 12 hours of power supply daily.

Earlier in February 2024, women protested at the office of the Power Distribution Company in Port Harcourt saying their husbands no longer make love to them at night due to excessive heat and poor power supply.

NERC had increased the tariff for Band A consumers from about N66 KWh to a flat rate of N225 KWh in a bid to reduce government subsidy to the sector.

As they struggle to meet the required hours of electricity under Band A, most consumers and the larger part of the country, who need to enjoy between 16 and about four hours of electricity under Band B to E, have been thrown into darkness.

Some customers in the Ajao Estate area of ​​Lagos State, served by Ikeja Electric, who fall under Band C, said the delivery only comes at midnight and disappears before dawn. These customers must receive at least 12 hours of electricity per day.

Nigerians are indeed dissatisfied with the deteriorating power situation in the country, which has been exacerbated by the heatwave due to harsh climatic conditions.

Adeola Adenikinju, Chairman of the Nigerian Economic Society (NES), said it was clear that the DisCos do not have enough power to distribute to customers.

He noted that Band A consumers are likely to be more negatively affected by the higher tariff, apart from an overall improvement in electricity generation.

“DisCos should not implement rate increases until they are ready to meet the number of hours required under each rate band. “In general, the current tire category should be a transitional phase. It is also discriminatory. Every customer should have the right to a stable, reliable, affordable and constant electricity supply,” Adenikinju said.