Nigeria’s telecom industry faces mounting operational costs, driven largely by its dependence on diesel-powered generators.
According to the State of Africa’s Infrastructure Report 2025 from the Africa Finance Corporation (AFC), telecom operators in Nigeria consume over 40 million litres of diesel every month, leading to an annual expenditure exceeding $350 million.
The report read, “A growing number of tower sites going off-grid or relying on diesel generators is a cause of concern for several reasons. First, it increases CAPEX and OPEX costs for operators, making investments in rural and remote areas even more prohibitive. In fact, GSMA Intelligence estimates that the energy cost of a mobile base station in rural areas could be 37% more than in urban areas. In Nigeria, for instance, telecom operators consume over 40 million litres of diesel per month, representing a yearly spending of over $350 million.
“Mobile broadband costs are further exacerbated by the higher amount of energy required to power data traffic in Africa (0.24 kWh/ GB compared to a global average of 0.17 kWh/GB), where lower traffic volumes and use of older technologies like 3G are energy inefficient. Second, tower sites that rely on generators and batteries report frequent theft of battery equipment and diesel.”
This substantial cost burden is a result of Nigeria’s unreliable power grid, which forces telecom operators to rely on off-grid diesel solutions to maintain service continuity, particularly in rural and underserved areas.
Nigeria’s energy infrastructure challenges
The report also noted that Nigeria’s energy sector faces significant challenges, particularly with unreliable public supply and the high reliance on petrol and diesel generators.
It read, “In Nigeria, unreliable public supply has pushed millions of households and firms to rely on petrol and diesel generators. Captive generation is especially widespread among industrial and commercial users.”
The increasing use of off-grid generation solutions highlights the gap between the nation’s energy demand and the capacity of its grid. The rise of decentralised energy solutions in Nigeria, such as captive generation, shows the need for extensive investment in both grid infrastructure and alternative energy sources to ensure energy security.
Investment in digital infrastructure
According to the report, Africa’s digital transformation faces significant hurdles, particularly in bridging the last-mile connectivity gap.
While the continent has made strides in expanding subsea cable infrastructure, ensuring that the capacity reaches underserved areas requires additional investments in middle- and last-mile infrastructure. This involves constructing fibre corridors that connect ports to production centres, secondary cities, and rural areas.
The report read, “Nigeria, Egypt, and Kenya are emerging as hubs—but an estimated $7 billion in annual investment is needed to close the data infrastructure gap continent-wide.”
It further noted that Nigeria has been making strides in improving its digital infrastructure. With the goal to triple its backbone fibre network, the country is working on an ambitious PPP model to enhance the quality of broadband available to its population and industries.
The report noted, “Nigeria, for instance, already relies on a backbone network of 35,000km but is rolling out an ambitious plan for an additional 90,000km of fibre under a PPP model to deliver a more modern and efficient backbone, able to support the latest technologies and bandwidth.”
Despite visible progress in making mobile broadband cheaper, Nigeria still faces challenges in expanding internet penetration, with a notable access deficit remaining, particularly in rural areas.
