SPECIAL REPORT: Nigeria’s energy crisis threatens livelihood amid soaring costs

By Quadri Adejumo

Nigeria is facing an escalating crisis that is threatening the livelihoods of its citizens. The convergence of soaring energy costs, and poor electricity supply has created a storm of challenges, leaving communities grappling with the palpable impacts of living degradation and economic instability.

Despite being Africa’s most populous nation and a key player in the global energy market, the country is facing a multifaceted crisis. In recent months, gas and energy costs have gone up, and there have been frequent power outages, lowering public confidence in the new government led by Bola Tinubu.

In May 2023, President Bola Tinubu assumed office as Nigeria’s sixteenth president. Shortly after taking the oath of office, the President declared that all Nigerians would have access to affordable electricity, highlighting the country’s power sector as one of his areas of focus. He claimed that electricity will become more accessible and affordable to businesses and homes.

But the power sector has significantly deteriorated in the first year of his administration, in contrast to the promises he made. Different cities have been darkened by widespread power outages, highlighting the growing gap between his lofty promises and the harsh reality the nation faces.

Persistent power outage

In spite of many years of promises and initiatives pointed toward developing the country’s energy infrastructure, power outages remain a persevering and broad issue. 

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In the last nine years, Nigeria’s national electricity grid has collapsed more than 200 times, regularly resulting in widespread blackouts. This year, the country has experienced blackouts, with the grid collapsing in February, March, and April. This month, the strike by labour unions caused the grid to shut down.

And this comes at a time when the price of petrol is beyond the reach of average citizens.

“In a week, I can count the number of hours we got electricity for. Heat is killing us. Our businesses are crumbling. It’s so unbearable. Everything in the country is faulty,” Balikis Hassan, a mother of two, told our reporter.

In a country where reliable power is a luxury rather than a norm, Balikis, like many other Nigerians, face daily hurdles and frustrations in accessing consistent electricity. From frequent electricity blackouts disrupting daily routines to the financial strain of relying on alternatives to power, Balikis is no stranger to the harsh realities of Nigeria’s electricity struggles.

Yet there is a rise in electricity tariffs. 

The Nigerian Electricity Regulatory Commission recently approved a sharp increase in electricity tariffs. Customers in Band A category are being charged 206 Nigerian nairas (€0.13, $0.14) per kilowatt hour (KWh), a significant rise from the previous rate of 66 naira (€0.041, $0.044).

In Nigeria, electricity usage is splitted in bands ranging from A-E. Band A refers to customers who receive 20-24 hours of electricity supply daily. Band B enjoys 16-20 hours of power supply, while those in Band C get 12-16 hours daily. Band D subscribers receive 8-12 hours of power supply each day, and Band E subscribers only receive 4-8 hours of electricity supply daily.

Despite years of public investment, Nigeria has the lowest access to electricity worldwide, with around 92 million people out of the country’s 200 million populace lacking access to power, according to the Energy Progress Report 2022 released by Tracking SDG 7. The nation has 12,500 megawatts of installed capacity but produces only about a quarter of that.

The failure of the Nigerian power sector to provide satisfactory power supply cripples the country’s economic development. The International Monetary Fund (IMF) estimates that Nigeria loses as much as $29 billion, that is 5.8 per cent of its annual Gross Domestic Product (GDP), due to a lack of energy and unreliable power supplies.

Rising fuel cost amid scarcity

Millions of Nigerians’ lives and businesses have been put in jeopardy by the rising cost of energy and fuel. Despite being a significant oil maker, Nigeria finds itself grappling with the conundrum of shortage, as its residents endure the worst part. 

Prices of fuels and diesels have since soared. Fuels in most outlets sell at an average of N700 (€0.43, $0.46) per litre. Diesel sell for about N1,225 (€0.74, $0.79) per litre. This was a drop from the previous price of N1,700 (€1.05, $1.13) per litre following the sale of the commodity by the Dangote Petroleum Refinery. 

Aliko Dangote, Africa’s richest man, has said his refinery will also reduce fuel prices in Nigeria. The refinery is to begin operation in July.

Many workers face exorbitant transport fares and lengthy delays to work, as transportation comes with the burden of high fuel prices. Mrs. Hassan, a teacher and a mother of two expresses her frustration. “It’s not just about the money, it’s the toll it takes on our time and energy,” she tells the reporter.

She also expressed her anger at the daily ordeal of enduring endless waits for buses. 

“My children, like many others, now resume school late, because they wouldn’t get the bus to school on time. Even with the high price, it’s hard to buy fuel because it’s so scarce,” Balikis added.

For Chinedu Amadi, a Lagos based electrician, who relies on public transportation to navigate his daily life, this adds to an already challenging existence. “Every day feels like a battle against the high cost of living expenses,” Chinedu tells SolaceBase.

“As a provider for my family, I can’t even afford to go to my workplace everyday. Most times, I walk long distances because I can’t afford to take a bus with the little money on me. I hope one day, the cost of living will no longer dictate our ability to survive.”

From small business owners struggling to keep their shops open amid rising expenses to others finding a way through resilience and sacrifices, the toll of these challenges are staggering. “I used to sell frozen fish, but with the high cost of petrol and unstable electricity, it’s become increasingly difficult to make ends meet,” Kemi Ibrahim, a fish seller in Iyana Ipaja, Lagos laments to the reporter.

Kemi has had to pivot her business model, opting to sell smoked fish. However, this adaptation comes at a cost – not just financially, but also on her health. “I’ve always had eye problems, but it has worsened because I now spend much time around smoke,” she explains. The constant exposure to smoke from the fish business has exacerbated her pre-existing eye condition. “But what shall we do? We have to make money and take care of the family,” Kemi reflects with a heavy heart. Her words encapsulate the stark reality faced by many small business owners in Nigeria.

Health risks of running generators

At least 40% of Nigerian households rely on petrol-powered generators as back-up for electricity. The health risks associated with the use of generators loom large. Fuel generators emit harmful pollutants into the air, including carbon monoxide, nitrogen oxides, and particulate matter. These pollutants, when inhaled, can lead to a myriad of health problems, ranging from respiratory issues to cardiovascular diseases.

The toxic fumes discharged by generators, when trapped indoors, represent an inevitable danger to health and safety, with possibly deadly results. The seriousness of using generators indoors and an increased risk of lung cancer have been linked in recent studies, highlighting the danger even more.

According to Dr. Arinze Ifeanyi, an Oyo based medical practitioner, generator fumes are a silent killer. “Carbon monoxide, a colorless and odorless gas, can seep into homes and cause severe health problems, often without any warning,” he stated.

He focuses on how prolonged exposure can lead to death, long-term health issues, including asthma, bronchitis, and even heart disease. “The particles in the fumes can penetrate deep into the lungs, causing inflammation and decreased lung function over time.”

Over the years, the deadly consequences of generator fumes have claimed the lives of thousands across the country. With this tragic reality underscoring the urgent need for action to address the risks associated with generator use.

Economic hardship 

Nigeria is grappling with a high energy cost, coupled with a severe inflation crisis, with the inflation rate soaring to 33.20 percent in March from 31.70 percent in February, the National Bureau of Statistics (NBS) said. The result is widespread chaos. A surge of violent unrest has swept across the nation amid the deepening economic crisis.

The economic hardship has also sparked protests, as many Nigerians have taken to the streets to protest the rising cost of living.

In the face of these challenges, the Nigerian government has vowed to take action to address the country’s emerging crisis.

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The Nigerian National Petroleum Company Limited (NNPC) blamed the fuel scarcity on activities of some petroleum marketers, who exploited the situation to make more money. The spokesperson of NNPC, Olufemi Soneye also added that the NNPC had increased the volume of petrol in Nigeria.

Also, Nigeria’s Minister of Power, Adebayo Adelabu said he has diagnosed the power issues to a large extent. 

“I have found out that the solutions are not as difficult as we all believe. And it doesn’t stop there. We should be able to evacuate and transport this power at the minimum of 80 percent of the stored capacity to the end users of the exchange system.”

“In setting targets for ourselves, we also need to set short-term targets. My own vision is for us to increase the stored capacity of our generation to at least 20,000 megawatts in the next three years.” 

Although the nation is still struggling to sustain a 4,000MW electricity generation, the minister insisted that Tinubu’s administration will meet the 20,000MW target by 2026.

On the increment of tariffs, Adelabu noted; “With what we have now, in the next three months, the entire country will be in darkness if we don’t increase tariffs.” He said the sum of $10 billion is needed yearly for the next ten years to revive the nation’s power sector.

However, skepticism abounds as Nigerians question whether these promises will translate into tangible improvements. With a history of corruption, mismanagement, many fear that the government’s response may fall short of addressing the root causes of the crisis.

“Supply chain disruptions and maintenance issues in major refineries overseas are two aspects of Nigeria’s current energy crisis, which has resulted in prolonged fuel shortages. In spite of past changes in the NNPC, including its progress to a public corporation, these endeavors have not adequately resolved the hidden issues,” Ojo Adesola, an energy strategy examiner, told this reporter.

“Nigeria’s current Minister of Power, for instance, struggles to effectively convey the benefits and necessity of energy sector reforms to the public. Effective communication techniques are essential for addressing these difficulties. Policy reforms and their implications must be explained to the public in a way that is understandable. A viable long-term solution is switching to sustainable energy sources like wind and solar power.” Adesola stated.