From frozen food sellers in Abuja to textile traders in Kano and foodstuff dealers in Lagos, entrepreneurs say rising petrol prices, unstable electricity supply and escalating transport costs have created a hostile business environment that threatens the backbone of the nation's economy.
Findings reveal that many businesses now spend between 60 and 80 per cent of their earnings on energy-related expenses, leaving little room for profit, expansion or even survival. To cope, many have reduced operating hours, scaled down inventories, introduced alternative business models or shut down operations altogether.
The situation is particularly concerning given the critical role Micro, Small and Medium Enterprises (MSMEs) play in the Nigerian economy. Economic experts estimate that MSMEs contribute about 90 per cent of the country's Gross Domestic Product (GDP), while Nigeria is home to more than 40 million such enterprises.
Yet these businesses remain trapped in a cycle of inadequate electricity supply, poor energy infrastructure, rising transportation costs and persistent economic uncertainty.
While some operators have resorted to generators and solar power systems, these alternatives come at enormous costs that continue to rise alongside fuel prices.
Petrol, which sold for about N187 per litre in 2023, now costs as much as N1,400 per litre in some locations following the removal of fuel subsidy and global market pressures, including tensions linked to the ongoing conflict involving the United States and Iran in the Middle East.
Frozen Food Traders Count Their Losses
For frozen food seller, Toyin Adeniyi, power outages have become a recurring nightmare that directly affects her livelihood.
According to her, prolonged blackouts result in spoiled stock, wasted capital and mounting debts for traders who depend on refrigeration.
"Traders in this business face power outages and minimal profits due to the economic situation in the country. The erratic power supply has clearly pushed many of us into indebtedness. We have no electricity to chill our drinks, preserve our frozen foodstuffs, or operate our cold rooms," she said.
Adeniyi explained that cartons of frozen chicken, fish and prawns often spoil within days of purchase when power supply fails.
"Cartons of frozen chicken, fish, and prawns get spoilt in a week of purchase. Some of us manage to salvage the situation with solar and generators, others aren't as fortunate. It's a terrible experience. The unstable power supply is partly why the fish and other frozen foods prices increase daily."
Abuja Artisans Battle Rising Bills
In Abuja, artisans and small business operators describe a similar struggle.
For Baba Ahmed, a welder operating in Garki, electricity is essential to his trade. However, the recent increase in electricity tariffs has significantly reduced the value consumers receive for their money.
"N1,000 which used to provide fifteen units of electricity now gives just seven units," he lamented.
"In three days, we exhaust five thousand naira on energy. After paying for energy, there's barely anything left for food. We barely survive as saving money is out of the question."
Many traders also complained about estimated billing practices, arguing that they continue to receive exorbitant electricity bills despite experiencing little or no power supply.
A fashion designer in the Federal Capital Territory said he spends thousands of naira daily on fuel for his generator while still receiving hefty electricity bills from the Abuja Electricity Distribution Company.
"We are still paying for electricity we don't use and there is nobody to hold the electricity companies accountable. It's shameful. The government can do their part, but electricity suppliers must also fulfil their responsibilities."
A barber who requested anonymity revealed that he had resorted to purchasing rechargeable clippers to reduce generator expenses and continue serving customers.
For business centre operator Emeka Eze in Jikwoyi, the situation has become increasingly difficult.
"My small shop is struggling to survive under this harsh business environment. Since fuel subsidy removal and other policies of the government, I don't make significant profits anymore. In fact, I am now an agent as a way of engaging in other side hustles to enable me feed and provide for my family."
According to Eze, nearly 80 per cent of his earnings now go into fuel purchases.
Similarly, Henry Michael, who operates a laundry business in Orozo, said unreliable electricity has made running his business frustrating and expensive.
"My business depends heavily on electricity and in the long run, I now have to rely on generators, especially since we use heavy washing machines. Again, constant increase in fuel prices have made it impossible for me to operate my generator daily."
As a result, he is considering reverting to charcoal irons to keep his business running.
"I'm thinking of buying charcoal irons as an alternative as I don't want to disappoint my customers or lose business opportunities."
He added that if conditions worsen, he may be forced to abandon the business altogether and return to his hometown.
Kano Traders Scale Down Operations
In Kano, traders at the famous Singer Market say transportation costs have become one of their biggest challenges.
Secretary of the market traders' association, Alhaji Hamisu Jingau, said increasing fuel prices have dramatically raised the cost of moving goods from Lagos and other commercial hubs to Kano.
"Traders no longer bring goods in bulk as before because of the cost of fuel which has significantly increased transportation cost."
He explained that many traders now purchase goods in smaller quantities because transport costs consume most of their profits.
"What happens is when traders pay for transportation nothing is left from the profit and so many hardly purchase goods that require movement from one location to another, and when they must, they buy in small quantity just to satisfy customers. Also, customers who used to buy goods in large quantities now buy little, it's that bad."
According to Jingau, transporting goods from coastal regions to northern Nigeria now costs millions of naira, discouraging many traders from expanding their businesses.
He noted that traders increasingly rely on waybill services and online transactions, with customers from neighbouring states and countries such as Niger, Chad and Cameroon placing orders remotely rather than travelling to Kano.
To reduce costs, traders have also adopted cooperative strategies.
"Two to three traders now share the cost of bringing a single container to Kano where the market is experiencing low activity."
Provision store owner Mustapha Muhammad said consumer spending patterns have changed significantly.
He explained that he now focuses mainly on essential items such as rice, sugar, flour, cooking oil and detergents.
"I no longer restock kitchen utensils, cosmetics, plastic items and electronics because people are after essential goods and not luxury anymore."
Muhammad said even loyal customers now purchase smaller quantities because of financial constraints.
Perishable goods dealer Haladu Ali shared similar concerns.
Because of the scarcity and high transportation costs associated with tomatoes and pepper, he has shifted his focus to selling yam.
"Because of the scarcity, the prices have more than doubled. Perishable items are seasonal and we also face transportation challenge."
Ali explained that lack of refrigeration and unreliable electricity make preservation nearly impossible.
"So honestly when you overcome one challenge, another one springs up. I visit my village regularly, getting ready for the farming season to complement my earnings."
Business centre operator Suleiman Bala faces rising rent and electricity bills.
"They just increased the rent to about N250,000 when we are battling with rising production costs."
He disclosed that his monthly electricity bill averages N15,000 despite irregular supply.
To survive, Bala now relies on a small solar inverter and has brought a POS operator into his shop to share rental expenses.
Textile trader Mudatex has introduced installment payment plans to attract customers struggling with reduced purchasing power.
Another trader, Abubakar Danzaria, abandoned his rented shop entirely and now operates as a mobile textile trader, selling directly to civil servants and other customers.
"Fortunately I have a motorcycle with which I move around, otherwise I wouldn't have been able cope with transportation fares charged by commercial tricyclists."
Lagos Traders Adopt Survival Strategies
The situation is no different in Lagos, where traders say economic hardship has significantly reduced customer patronage.
Foodstuff seller Akamuokulo John identified transportation costs as one of his biggest challenges.
"Whenever I go to the market to buy goods, the cost of transportation adds to the expenses and due to the high cost of things, some people always buy in small quantity just to manage."
He urged the government to address fuel prices, which he described as a major burden on businesses.
POS operator Olorunosebi said inflation has reduced his purchasing power and forced him to diversify his income streams.
"The cost of living is high. It is increasing daily. What I could afford with N10,000 and N20,000, I no longer can."
Unable to depend solely on POS operations, he has added the sale of hair creams to his business.
Clothing trader Ademola Abiodun also reported declining sales and shrinking inventories.
"The materials I used to buy like three wears I now buy for two because the cost of things increase daily."
According to him, consumers are spending less because rising prices have stretched household budgets.
Experts Warn of Wider Economic Consequences
Economic analysts warn that the difficulties confronting SMEs could have serious implications for the broader economy.
Speaking on Trust TV's Business Daily programme, economic analyst Wilson Agaba said struggling small businesses ultimately affect employment, income levels and market stability.
"When small businesses struggle, the effects are felt across the larger economy. There will be job losses, household incomes drop drastically while goods and services become more expensive."
He warned that sustained pressure on SMEs could deepen poverty and worsen Nigeria's already fragile economic conditions.
Development expert Joseph Momoh described the situation as a classic example of cost-push inflation, where production and distribution costs rise faster than business revenues.
"In Nigeria, many small and medium-sized enterprises depend heavily on road transport and self-generated power. When fuel prices rise and grid electricity remains unreliable, businesses face a double burden: higher logistics costs and operating expenses."
According to him, rising transportation costs affect every link in the value chain, from manufacturers and distributors to consumers.
"The result is reduced demand because household incomes aren't increasing at the same pace. Businesses then face lower sales volumes even as their operating costs continue to climb."
Momoh stressed that energy costs have become a determining factor in business survival.
"For small businesses such as bakeries, restaurants, salons and cold-storage operators, energy expenses determine if the business survives or not."
What Government Must Do
To reverse the trend, Momoh urged government to focus on long-term structural reforms rather than temporary interventions.
He advocated investment in energy infrastructure, including increased power generation capacity, reduction of transmission losses and incentives for renewable energy projects such as solar mini-grids.
"Expanding generation capacity, reducing transmission losses, and encouraging private investment in renewable energy can lower long-term electricity costs."
He also recommended major investments in rail transportation, inland waterways and road rehabilitation to reduce logistics costs nationwide.
On direct support for businesses, Momoh proposed targeted interventions including tax relief, low-interest loans and energy-efficiency grants for SMEs most affected by rising costs.
"Ultimately, sustainable business growth depends on reducing the structural costs of doing business. If Nigeria can achieve more reliable electricity, more efficient transport systems, and a stable macroeconomic environment, businesses will become more productive, prices will stabilize, employment will grow, and the rate of business closures will decline significantly."
For millions of Nigerian entrepreneurs, those reforms cannot come soon enough. As fuel prices rise, electricity remains unreliable and operating costs continue to soar, many small businesses are finding themselves in a daily battle for survival, with some already pushed to the brink.