With power supply being one of the major business constraints in Nigeria according to the Central Bank of Nigeria (CBN), it has been revealed that Nigerians spend about $14 billion on generator and fuel yearly in order to prevent their businesses from crippling.
For years, generator has served as an alternative source of power for Nigerians, as the country experiences unstable and poor power supply. This has led to increase in generator budget for many households and businesses within the country.
The amount spent on generator and fuel by Nigerians was revealed by the Director in charge of African Development Bank (AfDB) in Nigeria, Ebrima Faal who stated that it would have negative impact on the power sector.
The $14 billion shows an increase in spending and proves power supply in Nigeria is not getting better despite the privatization.
In order to improve the power sector, Nigeria privatised the power sector, leading to the creation of 12 distribution companies (Discos), but year in year out, both the government and the Discos have continued to blame each other for the poor power supply.
The increase shows businesses struggle to remain in business, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, said in a report by The Nation. He said spending on generator is unavoidable even though it’s increasing cost of operation and affecting contribution to the Gross Domestic Product (GDP) of the country.
According to the International Monetary Fund (IMF), lack of access to electricity and unreliable power supply are key constraints to doing business in Nigeria. The IMF estimated the annual economic loss at about $29 billion.
Despite the poor power supply, a bill to ban importation of generators into Nigeria passed the first reading in the Senate. The bill was sponsored by Senator Bima Muhammadu Emagi (APC Niger South).
Also, last year, Senator Francis Fadahunsi requested a five-year ban on generator importation. The suggestion was, however, rejected by the Senate President, Ahmed Lawan.
The decision to ban generator sets was once successful in 2015 when the Federal Government banned the importation of the most commonly used type of generating set in Nigeria popularly known as “I better pass my neighbour.”
It is still puzzling as to why Nigerian Senators keep introducing bills that seek to stop the use of generators in a country with epileptic electricity supply. Even President Muhammadu Buhari’s office was projected to spend N46 million on fueling generators in 2019.