₦airaland Forum

The African Development Bank has revealed that 70.7 per cent of firms in Nigeria own or share generators due to persistent electricity shortages, with power outages costing businesses about three per cent of their annual sales.

The bank disclosed this in its 2026 African Economic Outlook report, which, among other items, assessed Africa’s fiscal policy and tax systems. It warned that weak public service delivery continued to impose hidden financial burdens on households and businesses across the continent.

“Electricity outage losses amount to three per cent of annual sales in Nigeria, and because of this, generator reliance is widespread, with 70.7 per cent of firms in Nigeria owning or sharing generators,” the report stated.

The AfDB said the widespread use of generators reflected deep infrastructure and governance challenges that were weakening productivity, eroding profitability, and undermining confidence in taxation systems.

According to the report, households and firms across Africa increasingly pay privately for services that governments are expected to provide, including electricity, water, security, and logistics.

The bank described these expenses as “parallel levies” that reduce disposable income and raise operating costs for businesses.

“Higher domestic resource mobilisation without corresponding improvements in public service delivery imposes large implicit tax burdens on households and firms, which undermines the legitimacy and effectiveness of taxation and leads to a breakdown in the social contract,” the AfDB stated.

The report noted that many businesses in Nigeria had resorted to self-generated power because of unreliable electricity supply, adding that this trend continued to widen informality and reduce voluntary tax compliance.

The AfDB added that stronger delivery of electricity, healthcare, education, water supply, sanitation, and public administrative services could improve trust in government and strengthen tax collection efforts.

“By reducing the need for households and firms to self-provide these services, strengthening performance in these priority areas can enhance taxpayer trust, improve voluntary compliance, broaden the formal tax base, and reinforce the fiscal social contract,” the report stated.


The bank said Africa’s revenue mobilisation challenges remained significant despite increasing fiscal pressures caused by rising debt servicing costs, shrinking external financing, and growing development spending needs.

According to the report, nearly $469bn in potential revenue remains untapped across Africa due to weak tax compliance, poor administration, and ineffective policy design.

The AfDB also stated that more than 40 per cent of public investment spending across the continent was currently lost to inefficiencies.

“More than 40 per cent of public investment is currently lost to inefficiencies, and closing this gap could generate up to $299bn each year for growth-enhancing investments,” the report stated.

The bank further noted that Africa could unlock up to $1.43tn in additional annual financing by addressing inefficiencies in resource mobilisation and utilisation.

It added that Africa needed to sustain economic growth at seven per cent or higher over several decades to create jobs on a large scale and accelerate poverty reduction.

“Africa must raise annual growth to 7 per cent or higher, sustained over decades, to enable large-scale job creation and accelerated poverty reduction,” President of the African Development Bank Group, Dr Sidi Tah, said in the report’s foreword.

The report also highlighted the continent’s dependence on indirect taxes such as Value Added Tax, excise duties, and customs taxes, which accounted for 59.9 per cent of total tax revenue in 2023.

The AfDB noted that Nigeria, alongside other resource-rich economies, relied heavily on corporate income tax linked to extractive industries, reflecting the uneven nature of direct taxation across Africa.

Source: https://punchng.com/70-of-nigerian-firms-depend-on-generators-afdb

Generator republic for a reason

Since the 1980s, generator has been used in Nigeria and the Nigerian government and private sector in charge of electricity have failed woefully and disgracefully to bring in stable 24 hours electricity in Nigeria. All the holding electricity companies in in 36 states of Nigeria has been collosal failure in electricity distribution. The contractors and staff of these electricity distribution companies discos need to come and explain why other African countries with lower economy will have stable light and Nigeria cannot have stable electricity. All the past and current government in pdp and apc were just a failure in electricity provision. There are things in Nigeria that are very essential to everyone in the country who is a citizen and corruption ought not to be allowed to compromise important basic things like electricity in Nigeria

Nigerians are the course of their problem, when we're done suffering, we'll do the right thing
It beats my imagination how people vote for tinubu and are still trying to vote him again after all they've seen from his administration

That's why the rest of the loan wasn't accessed

But old cargo promised us that he's coming to work on electricity problem last election campaign??

Well he said we should vote him out if he doesn't perform in this area anyways, and we are ready to do that this 2027 by God's grace

Hence the name Generator Republic

Double wahala as diesel again cost pas PMS, just imagine.

shox:
Generator republic for a reason

Well done you're first to comment

ccollins:
Xfffrfnkkjgrsetttt3w

70% abi na 100%
They for do the statistics well.

Unless your firm doesn't need electricity to function.

I remembered when I was operating a small business in Nigeria my " I better pass my neighbour" generator nearly took my life.

I can't even wish such thing for my enemies.

Everytime I keep asking questions on how our government fails to deliver stable and reliable electricity.since 1999 return to democracy.

Imagine how we were jubilating then when Abacha died as if his death would turn Nigeria to America.

A lucrative evil agreement between the generators manufacturer and government.

Which 70%.... It is 100%. Generator/Solar is the main source and Normal power is now the backup power!!!

adenigga:
The African Development Bank has revealed that 70.7 per cent of firms in Nigeria own or share generators due to persistent electricity shortages, with power outages costing businesses about three per cent of their annual sales.

The bank disclosed this in its 2026 African Economic Outlook report, which, among other items, assessed Africa’s fiscal policy and tax systems. It warned that weak public service delivery continued to impose hidden financial burdens on households and businesses across the continent.

“Electricity outage losses amount to three per cent of annual sales in Nigeria, and because of this, generator reliance is widespread, with 70.7 per cent of firms in Nigeria owning or sharing generators,” the report stated.

The AfDB said the widespread use of generators reflected deep infrastructure and governance challenges that were weakening productivity, eroding profitability, and undermining confidence in taxation systems.

According to the report, households and firms across Africa increasingly pay privately for services that governments are expected to provide, including electricity, water, security, and logistics.

The bank described these expenses as “parallel levies” that reduce disposable income and raise operating costs for businesses.

“Higher domestic resource mobilisation without corresponding improvements in public service delivery imposes large implicit tax burdens on households and firms, which undermines the legitimacy and effectiveness of taxation and leads to a breakdown in the social contract,” the AfDB stated.

The report noted that many businesses in Nigeria had resorted to self-generated power because of unreliable electricity supply, adding that this trend continued to widen informality and reduce voluntary tax compliance.

The AfDB added that stronger delivery of electricity, healthcare, education, water supply, sanitation, and public administrative services could improve trust in government and strengthen tax collection efforts.

“By reducing the need for households and firms to self-provide these services, strengthening performance in these priority areas can enhance taxpayer trust, improve voluntary compliance, broaden the formal tax base, and reinforce the fiscal social contract,” the report stated.


The bank said Africa’s revenue mobilisation challenges remained significant despite increasing fiscal pressures caused by rising debt servicing costs, shrinking external financing, and growing development spending needs.

According to the report, nearly $469bn in potential revenue remains untapped across Africa due to weak tax compliance, poor administration, and ineffective policy design.

The AfDB also stated that more than 40 per cent of public investment spending across the continent was currently lost to inefficiencies.

“More than 40 per cent of public investment is currently lost to inefficiencies, and closing this gap could generate up to $299bn each year for growth-enhancing investments,” the report stated.

The bank further noted that Africa could unlock up to $1.43tn in additional annual financing by addressing inefficiencies in resource mobilisation and utilisation.

It added that Africa needed to sustain economic growth at seven per cent or higher over several decades to create jobs on a large scale and accelerate poverty reduction.

“Africa must raise annual growth to 7 per cent or higher, sustained over decades, to enable large-scale job creation and accelerated poverty reduction,” President of the African Development Bank Group, Dr Sidi Tah, said in the report’s foreword.

The report also highlighted the continent’s dependence on indirect taxes such as Value Added Tax, excise duties, and customs taxes, which accounted for 59.9 per cent of total tax revenue in 2023.

The AfDB noted that Nigeria, alongside other resource-rich economies, relied heavily on corporate income tax linked to extractive industries, reflecting the uneven nature of direct taxation across Africa.

Source: https://punchng.com/70-of-nigerian-firms-depend-on-generators-afdb

I have a colleague who produces catfish fingerlings. He spends over 1.6 million monthly fueling his generator. That's over 16 million naira a year now. How is this sustainable? He is trying to move to solar now but he'd be spending close to 10 million at a minimum.
Imagine similar power costs across other industries. Millions that should have been used to employ more people gets spent on power due to the inefficiencies brought about by governmental failure.

Very insightful article.
This issue of electricity has lingered for too long. What could be the most viable way to finding a solution to it.

Very shameful. I honestly don't know where we are headed

This is not news na. We no get light yet for Nigeria.

I am a manufacturer. I know how much it cost me every week to run the generators. I've lost so much this year due to epileptic power. I have no reason to vote Tinubu again because he has failed to fix electricity problems. The situation has even got worse under his government. We hardly enjoy 2 hours in a day and my press is located in an industrial area o. A stable electricity would've solved at least 50% of Nigeria's economic problems. But this government is wasting money on coastal roads that have no direct benefit on the masses. Everybody needs electricity to survive both economically and socially, but Nigerians don't need coastal road to survive. Tinubu has really misplaced the priority of the people.

Nigeria situation is this terrible due to putting the wrong peg in the right hole. Adelabu shouldn't have neard power at all. But as they like rewarding their members with juicy positions, we should expect more of all we're seeing today

Dogalmighty17:
I have a colleague who produces catfish fingerlings. He spends over 1.6 million monthly fueling his generator. That's over 16 million naira a year now. How is this sustainable? He is trying to move to solar now but he'd be spending close to 10 million at a minimum.
Imagine similar power costs across other industries. Millions that should have been used to employ more people gets spent on power due to the inefficiencies brought about by governmental failure.

It's better to spend 10 million naira one time and have maintenance costs low, than to spend 1.6 million naira monthly and have maintenance cost at 500k per month.

I blame the populace. We are too focused on being better than the next person than demanding accountability from our useless leaders.

Nastrademus:
Nigerians are the course of their problem, when we're done suffering, we'll do the right thing
It beats my imagination how people vote for tinubu and are still trying to vote him again after all they've seen from his administration

You think Tinubu is the root cause of Nigeria's electricity problem?

30 years of military didn't solve the electricity problem
16 years, PDP didn't solve our electricity problem.
8 years of Buhari /APC didn't solve our electricity problem.
3 years of Tinubu/APC have not solved our electricity problem.

The issue lies in the lack of economic capacity and governance. Recently, the 2023 Electricity Act empowered local government, state government, and, finally, the private sector to have open access to generate, transmit, and distribute electricity. What is the results?

Can Nigeria afford electricity if it is available?
Nigeria need to protest for better access to electricity.

If they come for loan now, u will aid them with the funds

If they come for loan now, u will aid them with the funds.
So, what is the solution u have before now and have u directed it to them?

Tinubu is working . . . .Gbajue!

Hmmm ..... 70.7% .... really? ... not 70% .... not around 70% ... not 70.5% ..... but precisely 70.7 percent. How many firms are there n Nigeria? ... and they contacted each and everyone of them to come to this conclusion. I wish when these people stand in public and open their mouth to shout these figures they pull from the air or their butt ... I wish someone should hurl a nylon of poo into the gap and down the throat. They'll then have a valid excuse for talking sh*t.

Originalsly:
Hmmm ..... 70.7% .... really? ... not 70% .... not around 70% ... not 70.5% ..... but precisely 70.7 percent. How many firms are there n Nigeria? ... and they contacted each and everyone of them to come to this conclusion. I wish when these people stand in public and open their mouth to shout these figures they pull from the air or their butt ... I wish someone should hurl a nylon of poo into the gap and down the throat. They'll then have a valid excuse for talking sh*t.

Is there any firm in Nigeria that doesn't depend on generator?

As a generator Republic, I'm pleased to tell you that our master strategist (AkA, the 1st class graduate, AKA the Dubai maker) is handling the economy perfectly well.

Enemies of our great generator Republic are the ones crying.

But they said tulumbu has fixed electricity.

Naustine:
Is there any firm in Nigeria that doesn't depend on generator?

Maybe .... maybe not. How about most firms ...almost all firms ... ... and like you said is there any firm that does not... none is specific. My point is he is verrrry specific and that is a big fat lie That's my problem.

To answer your question ... I'm not sure. I guess there may be few firms that have gone solar.