Effects of power outages on SMEs
Mrs. Janet Osas has experienced a downward trend in her frozen food business due to poor power supply.
A wholesaler at Kado fish market, Mrs. Osas, while relating her experience to Daily Trust said, her business depends solely on good power supply to survive but inadequate supply has been a major problem.
“I deal in frozen food such as; chicken, turkey, fishes, gizzard, shrimps, prawn and others. A day without electricity creates lots of worry for me. I have lost huge amount of money in the past due unstable power supply. The moment these items are not frozen buyers complain bitterly. They also spoil very fast when there is no constant electricity thereby making us to record huge losses,” she said.
Mrs. Osas said, for her to be in business, she has to invest in a good generator that can power her cold room well but not without spending huge amount in purchasing fuel.
“If the government can help us with consistent electricity supply it will help boost our business and generate more profit. But instead of profit we run into losses most of the time,” she said.
Mr. Myron Uche, a business man who specialises in making canopies, windows and rails, also said power outages affect his business adversely because he uses machine that requires constant electricity. “Without light we can’t work except we use generator as an alternative source and that cost a lot for me as a business man,” he explained.
He said the problem is also affecting his profit, adding that the money he spends in buying fuel in a week can recharge his meter for a month. He added that the most worrisome is the fact that it affects his profit margin and the customers cared little or nothing about it.
“I have to buy petrol and diesel but the customers are not helping matters as they don’t want to know how you do it whether or not there is light; all they want is their work done. If you give them slightly changed charge rate they will complain. Most time I have to agree to their low price or you lose them,” he said.
Our reporters who also spoke to some entrepreneurs, heard that the poor power supply in Abuja and its environs is slowing down the growth of some of their businesses while increasing their energy cost.
Some business owners who spoke with Daily Trust in Mararaba and Ado areas of Nasarawa State said they spend a lot of money to fuel their generators.
There are similar complaints of insufficient power supply in Nyanya and Karu suburbs of Abuja. Many of the entrepreneurs said they spend more on buying petrol (premium motor spirit) and diesel at its current price of N145 and N200 respectively to power their businesses.
On how they recoup the money spent on alternative energy source, Malam Ado Muttaka who runs a laundry shop around Karu market said, “I just have to add it to the cost of services by raising the price per unit. For instance clothes that we used to iron for N50 before June 2016 have gone up to N80. We now iron suits for N300 instead of N200. That is how things have changed.”
Another business owner, a welder, Gbenga Muyiwa, in Nyanya Phase IV said he has devised means to work more at night because his area gets more supply from 12am.
“However, it is slowing down business as some customers who want instant jobs in daytime can’t pay for the cost of using diesel for their jobs,” Muyiwa added.
Reacting to the power situation, the marketing officer in Mararaba who interfaces with business owners, Mrs. Esther Audu, said the Abuja Electricity Distribution Company (AEDC) only distributes what it receives from the Transmission Company of Nigeria (TCN).
She said the firm hardly gets 70 per cent of its daily power allocation which results in insufficient power for customers under it.
A quick check by our reporters indicate that the Distribution Company (DisCo) ought to be allocated about 450 megawatts (mw) daily power load but often gets less than 300mw.
But, with the Federal Government’s approval of the contract of the Mambilla hydro power plant designed to deliver 3,050 megawatts of power to Nigerians in the next six years, it is hopeful that the power situation will improve.
However, with the rising cost of electricity to power Small and Medium scale Enterprises (SMEs) in the country, an expert has said switching to solar power could cut energy cost by over 50 per cent for SMEs operators.
The Managing Director of Lagos-based Solar King Industries, Mr. Justice Ekeke, told Daily Trust on telephone that the cost of using solar to power businesses is far cheaper than using diesel/petrol based generators in the long run.
“The new arrangement we have demands that with just N250,000, small businesses could be powered with three solar panels, an inverter, the charge controllers and other accessories.
“The panels can last for 25 years along with the inverters. It is only the batteries that need to be replaced after three to four years. Although while it is a bit high to acquire it at first, it is more cost effective in the long run,” Ekeke explained.
He noted that there are options for instalmental payments for subscribers among leading solar firms in the country.
But whether solar energy will solve the problem of power supply or improve electricity supply by the Power Holding Company of Nigeria, only time will tell.