CPPE Issues Urgent Call as Rising Energy Costs Squeeze Small Businesses
- The CPPE has raised concerns about rising global energy prices and their effect on Nigerian businesses
- The think-tank group noted that the increasing energy costs are threatening SME sustainability
- In a statement to Legit.ng, Muda Yusuf calls on the government to boost power supply
Legit.ng journalist Dave Ibemere has experience in business journalism, with in-depth knowledge of the Nigerian economy, the stock market, and broader market trends.
The Centre for the Promotion of Private Enterprise (CPPE) has warned that surging global energy prices, driven by geopolitical tensions in the Middle East, are worsening operating conditions for Nigerian businesses and threatening their sustainability.
In an advisory note made available to Legit.ng on Sunday, March 15, Muda Yusuf, chief executive officer of CPPE, said there is now heavy reliance on petrol and diesel by firms due to a persistent electricity shortage.
Source: UGC
Cost of rising energy
The CPPE boss noted that the use of alternatives has significantly increased production and distribution costs, squeezing profit margins, especially for small and medium enterprises (SMEs).
The think tank noted that the latest spike in energy prices comes at a time when businesses are already grappling with high inflation, elevated interest rates and weak consumer purchasing power, further compounding economic pressures.
CPPE said:
“Without deliberate adjustments by businesses and supportive policy interventions from government, rising energy costs could significantly erode profitability and dampen economic growth.”
To cushion the impact, CPPE urged businesses to prioritise energy efficiency by optimising generator usage, adopting energy-saving equipment and strengthening internal energy management systems.
It added that even modest efficiency gains could significantly reduce fuel consumption and operating costs.
The organisation also called for a gradual shift toward alternative energy sources such as solar and hybrid systems, noting that although initial investment costs may be high, long-term savings are increasingly attractive amid persistently high fuel prices.
Yusuf said:
“Energy price shocks often transmit strongly through logistics and transportation costs. Businesses should therefore review their logistics operations with a view to improving efficiency and reducing fuel consumption."
Other concerns for businesses
On logistics, CPPE advised firms to streamline supply chains by consolidating deliveries, optimising transport routes and adopting digital solutions to reduce fuel consumption and operational expenses.
It further recommended flexible pricing strategies, improved cost management and stronger cash flow planning to help businesses navigate the current volatility, while encouraging cluster-based solutions such as shared power and logistics infrastructure to achieve economies of scale.
For policymakers, CPPE stressed the need to expand incentives for renewable energy adoption, including tax breaks and import duty waivers on clean energy equipment.
It also called for improved access to affordable financing to enable SMEs to invest in energy-efficient technologies.
Source: Twitter
The group also highlighted the importance of strengthening domestic refining capacity to reduce dependence on imported fuel and ease pressure on foreign exchange, while also urging the government to accelerate reforms in the power sector to improve electricity supply reliability.
CPPE said a stable power supply remains the most sustainable solution to Nigeria’s high energy cost environment, as it would reduce businesses’ dependence on costly diesel and petrol generators.
He said:
"Beyond supply security, domestic refining also has significant macroeconomic benefits. By reducing the country’s dependence on imported petroleum products, local refining lowers the demand for foreign exchange used for fuel imports, thereby easing pressure on the exchange rate and improving Nigeria’s balance of trade.
"Over time, a strong domestic refining base can also support export opportunities for refined products within the African region, further strengthening external reserves and Nigeria’s position in regional energy markets."
DisCo announces 19 hours power outage
Earlier, Legit.ng reported that the Abuja Electricity Distribution Company (AEDC) has announced a planned electricity outage that will last about 19 hours in several parts of Kogi State.
The company issued the notice in a public statement to customers in Lokoja town, Konton Karfe, Naval Base, Banda, Felele, Army Barracks and surrounding areas.
The technical team of the Transmission Company of Nigeria (TCN) has scheduled a maintenance exercise at the Lokoja Transmission Station.
Source: Legit.ng
