By Favour Pius
The Centre for the Promotion of Private Enterprise (CPPE) has warned that the rising cost of energy across Nigeria is placing severe pressure on small and medium-scale enterprises (SMEs), cautioning that sustained increases in electricity, fuel and logistics costs could threaten the survival of many businesses.
The economic advocacy group said escalating energy prices are significantly increasing production and operating costs for businesses, particularly small enterprises that rely heavily on self-generated power to sustain operations.
Chief Executive Officer of the organisation, Muda Yusuf, noted that the surge in the cost of diesel, petrol and electricity tariffs has compounded the already challenging operating environment facing Nigerian businesses.
According to him, many SMEs, which form the backbone of Nigeria’s economy, are increasingly struggling to remain competitive as rising energy costs erode profit margins and weaken productivity.
He explained that most small businesses operate in an environment where public power supply remains unreliable, forcing them to depend on generators powered by diesel or petrol energy sources whose prices have risen sharply in recent months.
“The energy cost burden on businesses has become extremely high. For many SMEs, energy accounts for a significant portion of operating expenses, and the persistent increase in fuel and electricity costs is squeezing their margins,” Yusuf said.
The CPPE warned that if the trend continues, it could lead to business closures, job losses and slower growth within the small business segment, which plays a critical role in employment generation and economic activity.
Industry analysts say the energy challenge has become one of the most pressing concerns for manufacturers, traders and service providers across the country, particularly in urban commercial hubs such as Lagos, Aba and Kano.
Many SMEs in these areas rely on generators for several hours daily to power equipment, refrigeration systems, office operations and retail services.
To mitigate the impact of rising energy costs, the CPPE urged businesses to adopt energy efficiency measures and explore alternative power solutions where possible.
Yusuf advised enterprises to invest in energy-saving technologies, adopt solar and hybrid energy systems and review their operational processes to reduce unnecessary energy consumption.
He also called on the government to accelerate reforms aimed at improving electricity supply, deepening investments in renewable energy and reducing the structural challenges affecting Nigeria’s power sector.
According to him, improving access to affordable and reliable electricity remains critical to boosting productivity, supporting industrial growth and enhancing the competitiveness of Nigerian businesses.
The CPPE further noted that targeted policy interventions to support SMEs in managing energy costs could help stabilise the sector and prevent further economic strain.
Analysts say addressing Nigeria’s energy challenges is essential for unlocking the full potential of small businesses, which account for a significant share of employment and economic activities across the country.
