Artisans, traders, and Micro, Small and Medium Enterprises (MSMEs) are struggling to survive due to the crippling effects of low power availability and the rising cost of electricity or alternative power generation on their businesses and livelihood, LEADERSHIP has learnt.
MSMEs, particularly artisans and operators in the informal economy, are experiencing severe challenges including bad debts, poor sales, and diminished inventory caused by power supply disruptions in some parts of the country and steep electricity costs. These difficulties continue to hinder market readiness and competitiveness, forcing millions to close shop.
Millions of MSMEs across the country are salvaging their businesses with generators, solar power inverters, and inverter batteries to tackle the challenges of power outages, which come at a significant cost, increasing daily operating expenses amid low revenue.
Scores of traders and artisans in Alagbole, Akute, Ajuwon, Denro, and other SME hubs in Lagos lamented to the LEADERSHIP correspondent about the traumatising effect of power outages on their businesses, resulting in debts. Meanwhile, others, barely able to feed themselves, have been forced to seek better alternatives or grind their businesses to a halt.
LEADERSHIP’s findings in Lagos and Ogun State suburbs revealed that frozen food sellers were forced to use generators to power their freezers due to erratic power supply and were running at a loss because of the high fuel costs.
A frozen food operator at the popular Ajuwon/Akute Market in the Ifo Local Government Area (LGA) of Ogun State, Toyin Adeyeye, recounted to LEADERSHIP her traumatising experience as a trader since December 2024, attributing business disruption and hindered growth to the electricity distribution companies.
She said, “We traders in this market segment are facing power outages and minimal profits due to the economic hardships in the country, but the erratic power supply has clearly pushed many of us into serious debts. We have no power to chill our drinks, preserve our frozen foodstuffs, or operate our cold room stores.
“Cartons of frozen chicken, fish, and prawns spoiled within a week of purchase. While some of us managed to salvage the situation with solar inverters and generators, others were not so fortunate. It was a terrible experience. Even now, power supply remains unstable. This is partly why the prices of fish and other frozen foods are increasing daily.”
Further findings revealed that over 40 million MSMEs in Nigeria are caught in a prolonged crisis of low energy transmission and persistent power outages, disrupting business models throughout the value chain.
These supply gaps, combined with high tariff costs and electricity outages, have significantly undermined MSMEs’ market readiness.
In Ilorin, Kwara State, small business owners also decried the impact of electricity tariff hikes and soaring fuel costs on their businesses.
Welder Baba Ahmed said that an energy source costing N1,000, which used to generate 15 units of electricity, now produced just 7 units.
“In just three days, we exhaust N5,000 on energy. After paying for energy, there is barely anything left for food. We have been barely surviving. Saving money is out of the question,” he said.
Another business owner along Offa Road, Ilorin, known simply as Rasheed, who runs a cybercafé, said he spends between N45,000 and N50,000 weekly due to the unstable power supply.
However, his view contrasts with other business owners.
He said that despite tariff hikes, he still preferred a power supply from IBEDC, which, if stable, cost him about N10,000.
“The only challenge is irregular supply; we get just about 4 to 6 hours during the day,” he said.
LEADERSHIP also gathered that states experiencing high tariff costs and persistent power outages include Lagos, Ogun, Oyo, Osun, Ekiti, Delta, Rivers, Cross River, and Edo State. These power outages have revealed the unreliable supply gaps in the electricity supply in states, which is forcing many small businesses to struggle for survival.
Despite receiving little or no power, consumers lamented that they are still subjected to exorbitant estimated bills.
A resident of the Magboro area of Ogun State, Uwem Eyo, reported prolonged blackouts plunging many businesses into crises, with some areas experiencing months without electricity.
A laundry business operator in the Ogba area of Lagos State said he spends N5,000 daily on fuel to power his generator, yet the Ikeja Electricity Distribution Company (IKEDC) continues to issue him high electricity bills for power he does not consume.
Similarly, Sophia Akodu, a resident of Ojodu Berger in Lagos, decried rising estimated bills, stating her household now pays over N100,000 monthly on prepaid meter billing despite having no electricity for 24 hours.
Another businessman, John Ajayi, said he no longer relied on the power supply from electricity companies for survival. He regretted that despite the hardships and losses, electricity companies continued issuing estimated bills.
“We are still paying for electricity we don’t use and there is nobody to hold the electricity companies accountable. It is shameful. The government can do their part, but electricity suppliers must also fulfil their responsibilities,” he said.
He added that he had to buy rechargeable clippers for his shop to cut customers’ hair to reduce the high cost of fuelling his generator.
Addressing these concerns, the national president of the Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, lamented that many people had closed their businesses, especially those relying solely on electricity.
He said entrepreneurs operating cold rooms, welding workshops, and manufacturing companies could not use small generators and must rely on large generators.
“Once they buy diesel, there are no profits left, so they revert to electricity. If there is no power, they cannot operate. Some firms have laid off workers while others have closed completely. Statistics show about 10 per cent of businesses have closed in the last year,” he explained.
Egbesola added that the current challenge was the need to look for alternative power sources, but micro and small businesses could not afford options like solar energy, inverters, or gas such as CNG.
“Only big businesses can afford these, resulting in inflation as costs are passed on to consumers. Prices of products are rising daily, fuelling inflation,” he said.
He noted the consequences include more unemployment, additional business closures, increased emigration, and erosion of investor confidence.
“Regarding the losses incurred, we do not have research-based reports, and it would be inappropriate to speculate without evidence. But it is clear losses faced by traders are enormous,” he said.
Egbesola predicted that without urgent solutions, commodity prices will continue rising, adding: “People will abandon their businesses to seek either white-collar or blue-collar jobs, or resort to menial work like motorbike taxi riding or manual farming. This will increase unemployment, and with more unemployed people, crime will rise because people must find ways to survive.”
In Enugu, welder Ignatius Okonkwo said that while power supply had improved, high tariffs hindered profitability.
He commended the Enugu Electricity Regulatory Agency for reducing tariffs and urged the government to enforce this immediately.
He also called for implementation of refund orders for overbilled power users.
In Delta State, epileptic power supply and tariff hikes had caused hardship and economic loss.
Iron welder Jimoh Tunde in Asaba lamented being billed for electricity services not enjoyed.
“It’s definitely hurting our businesses. We run generators, and when there was some power supply, profits were small. Now it’s worse. We use diesel and petrol to run generators to make our products,” he said.
Tailor Isioma Okonkwo lamented rising expenditures and firing trainees due to unprofitability.
Agbor resident and ice block producer Monday Idehen lamented the tariff increases, noting they did not correspond to supply. He was billed N40,091.43 in April 2025 and N48,572 in May 2025.
“I’ve had to relocate my deep freezers to a remote area with stable electricity. However, transportation costs are high, and ice blocks melt before reaching customers in town,” he said.
In Kogi State, business owners are struggling due to high tariffs and erratic power from Abuja Electricity Distribution Company (AEDC), with some forced to close down.
LEADERSHIP’s visit to Lokoja metropolis revealed a deteriorating business environment.
Welder Abdulganiyu Sunday at Felele Park noted the high cost of electricity and poor supply have deprived him of business.
“We were paying N20,000 in 2023, now over N50,000, but power is unavailable most of the day. It’s 2 pm and we have no light. We appeal to AEDC to investigate high bills and supply more power so we can work and feed our families,” he said.
A frozen food operator at Pata Market, identified as Mallam Shehu, said his shop had been closed for a year.
His fish often spoiled due to outages, causing debts and forcing closure.
“Most times, fish worth millions bought on credit are spoiled for lack of power. AEDC still forces payment for power not supplied,” he said.
The situation is similar at other business outlets visited.
In Sokoto, epileptic electricity supply and high tariffs have forced hairdresser Janet Musa to adopt a new survival strategy, after they took a toll on her health.
She opened her salon at Offa Road over seven years ago, initially benefiting from better power supply.
“Suddenly, supply became erratic. Using a generator became costly and I was running at a loss. A year ago, I packed my tools and closed the shop,” she said.
She became an itinerant hairdresser, working at the Nigerian Army barracks and visiting homes.
Soft drink trader Malam Sani Sa’allah at Emir Yahaya Road shares similar struggles.
Power outages hurt his sales, while high tariffs threaten business viability.
“During power supply, my four freezers run simultaneously, but on generator, I have to switch off two as it cannot power all four. Fuel costs are high and hugely impact business,” he explained.
In Imo State, epileptic power and high tariffs adversely affect artisans such as hairdressers, welders, and plumbers.
Hairdresser Onyemaechi Ubaka said high tariffs and unreliable power supply impede business development.
She stressed that running the business is unprofitable as funds are diverted to generators, leaving no profit.
Ubaka appealed to the government to intervene and ease the challenges faced by artisans.
Welder Chibueze Ezeala also lamented the unbearable situation, struggling to feed his family after paying high tariffs and fuel costs.
He called for urgent government action to support welders.
“In fact, most welders have closed shops due to harsh economic realities. Something must be done urgently to allow us to continue as we have no alternative livelihoods,” he said.
In Kebbi State, small business owners operate skeleton services or have closed due to high electricity bills.
The Chairman of the Automobile Association of Welders, Alhaji Muhammed Makera, lamented his high monthly workshop electricity bills paid to KEDCO.
The Manufacturers Association of Nigeria (MAN) condemned frequent electricity tariff hikes, warning they negatively impact manufacturing.
MAN criticised Nigeria’s power sector privatisation for failing to improve electricity generation and supply.
Director general of MAN, Segun Ajayi-Kadir, highlighted steep electricity costs for manufacturers and SMEs.
He noted Band A tariffs increased by over 200 per cent, significantly raising operational costs.
He also highlighted the surge in borrowing costs for manufacturers, with average lending rates rising from 28.06 per cent in 2023 to 35.5 per cent in 2024, pushing total finance costs to N1.3 trillion and limiting capital expansion.
Similarly, director of Export Trade Development at ITFA, Abdullahi Sidi-Aliyu, emphasised the need for MSMEs to build ethical markets fostering resilient, profitable, and environmentally sustainable social enterprises.
He urged SMEs to grow sustainable businesses addressing environmental and social challenges while promoting eco-friendly business interactions.
