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,
getting electricity, 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 electricity. Although all Nigerians are feeling the
effects, businesses are feeling it more. Jumia Travel identifies 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.
By Adeniyi Ogunfowoke