Power grid collapse poses serious threat to SMEs

On November 5, 2024, the national power grid suffered its ninth collapse this year, leaving millions in Nigeria once again plunged into darkness.

Power generation plummeted to an alarming zero megawatts from 2:00 PM, impacting all 22 operational generation companies (GenCos) across the nation.

This ongoing crisis highlights the severe instability of Nigeria’s power sector, which has been marred by frequent grid failures, inadequate capacity, and disruptions.

The Transmission Company of Nigeria (TCN) has yet to provide an explanation for this latest incident or an estimated timeline for resolution, leaving businesses and stakeholders in uncertainty.

The ramifications for businesses are significant. Frequent blackouts disrupt operations, lead to financial losses, and undermine productivity.

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Companies that rely on steady electricity to power equipment or maintain refrigeration face immediate challenges, affecting everything from manufacturing to service delivery.

Small businesses, in particular, struggle to absorb these shocks, often lacking the resources for alternative power solutions like generators.

This year has seen a troubling pattern: after a significant blackout in February, where the grid’s capacity dropped from 2,407 megawatts to just 31 MW, subsequent failures on August 5 and multiple occurrences in October have deepened concerns about the power supply’s reliability. The October 14 collapse, followed by partial failures, underscores a system in crisis.

As Nigeria’s businesses grapple with these challenges, the need for urgent reforms in the power sector becomes increasingly critical to ensure sustainable growth and economic stability. Without a reliable power supply, the potential for business innovation and expansion remains severely constrained.