The Centre for the Promotion of Private Enterprise (CPPE) has warned that Nigeria loses between N7 trillion and N10 trillion annually due to unreliable electricity supply.
The disclosure was made by the CPPE in its latest policy brief titled “Fragile disinflation amid escalating energy shocks: Urgent action needed to protect citizens and businesses,” signed by Dr. Muda Yusuf on Sunday.
The group noted that persistent power shortages are worsening inflationary pressures and undermining productivity across households and businesses.
What they are saying
CPPE highlighted the economic burden of unreliable electricity and its strong link to inflationary pressures in the economy.
- “Nigeria’s exposure to energy-driven inflation is intensified by structural weaknesses in the domestic economy.”
- “Estimates indicate that unreliable electricity imposes annual economic losses of between N7 trillion and N10 trillion, while spending on generators exceeds N3.7 trillion annually.”
- “The heavy reliance on petrol and diesel for power generation, due to unreliable electricity supply, creates a strong and immediate pass-through from global oil prices to domestic inflation.”
- “The resurgence in monthly inflation and the emergence of external shocks suggest that premature policy easing would be risky.”
- “Transport costs have become a major channel of inflation transmission, and easing this burden would provide immediate relief to households.”
The group stressed that urgent and coordinated policy actions are required to prevent worsening inflation and economic instability.
Get up to speed
Nigeria has long grappled with unreliable electricity supply, forcing widespread dependence on alternative energy sources.
- This dependence has increased exposure to fluctuations in global oil prices.
- Energy costs significantly affect production, transportation, and general price levels.
- Weak electricity infrastructure has constrained industrial growth and competitiveness.
These long-standing structural challenges have made energy costs a major driver of inflation in Nigeria’s economy.
More insights
CPPE also outlined several policy recommendations aimed at addressing the energy crisis and stabilising the economy.
- Strengthening domestic refining capacity, including support for the Dangote Refinery.
- Ensuring stable crude oil supply and concessionary terms to local refiners.
- Scaling up investment in efficient and affordable public transportation systems.
- Removing import duties and taxes on renewable energy equipment such as solar panels, inverters, and batteries.
The group further advised prudent management of oil revenue windfalls to boost foreign exchange reserves and support productive sectors.
What you should know
Recent inflation data suggests a slight moderation, although risks remain significant due to structural vulnerabilities.
- Nigeria’s headline inflation rate moderated marginally to 15.06% in February 2026, down from 15.10% recorded in January 2026.
- This is according to the latest data released by the National Bureau of Statistics (NBS).
- Inflation was significantly higher at 26.27% a year earlier.
External shocks and rising energy costs continue to pose threats to stability.
