Persistent Power Cuts Force 70% of Nigerian Firms to Run Generators

A recent AfDB economic outlook reveals that 70.7% of businesses in Nigeria now own or share generators. Companies face power outages that cost them about 3% of annual sales. The report highlights how the private provision of electricity, water, security, and logistics acts as “parallel levies.” These hidden costs weaken profitability and erode confidence in public services and taxation. Weak service delivery has driven many firms into informality and undermined voluntary tax compliance. The bank warns that inefficiencies in public investment are draining more than 40% of spending across Africa. Strengthening electricity, healthcare, education, and water supply could improve trust in government. Better public services may broaden the formal tax base and free up billions for growth-enhancing investments.

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