The
World Bank data on ease of doing business released this year ranked
Nigeria 169 out of 190 countries. Ten sub-indices were used for this
ranking such as starting a business, dealing with construction permits,
access to power, registering property, getting credit, protecting
minority investors, paying taxes, trading across borders, enforcing
contracts and resolving insolvency.
One sub-indices that many Nigerians can
relate with is access to power which boils down to electricity. Although
all Nigerians are feeling the effects, businesses are feeling it more.
Here are 5 ways power shortage is affecting Nigerian businesses.
Huge amounts are budgeted for diesel and generator
There is no way any business can run
smoothly without having a generator notwithstanding if it is a startup
or an established business. The budget for generators, diesel as well as
servicing these generators is humongous. These monies, if there is no
power interruption, can be deployed to other aspects of the businesses.
Startups are likely to fail
Many young Nigerians have ventured into
the uncertain world of entrepreneurship despite the recession. They have
satisfied all the constitutional requirements for setting up a business
but they have to still a factor in how to provide electricity. Over
time, you will observe that some of these great startups are likely to
fail due to power shortage. They can only do as much.
Businesses cannot employ
If electricity can be tackled in
Nigeria, the monies companies spend on providing power can be used to
employ more Nigerians. This is a part reason why some companies prefer
to use contract staff.
No room for growth or expansion
Growth and expansion are essential to
any business. The more businesses spend on electricity, the more they
cut back on growth. Combining power shortage with the economic
recession, some companies have no choice than to lay off some of their
workers.
Businesses are moving out
Nigeria is the biggest market in Africa.
At the same time, it has the biggest challenges. Some of them have
decided to continue running their businesses in the country, others have
made the decision to move their operations to other countries while
maintaining a little presence in the Nigeria.
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