SMEs in Lagos Struggle with Rising Energy Costs

Small and medium enterprises (SMEs) in Lagos are facing severe challenges due to escalating energy costs and rising petrol prices. Business owners, including Deacon Ok, have reported that the increase in fuel prices significantly raises operational expenses for power generation and transportation, making it difficult to maintain profitability.

For instance, Ok noted that daily fuel expenses range from N5,000 to N10,000, with some businesses having to increase the cost of services and products. The transport fare for moving goods between Lagos and Abuja has reportedly surged from N30,000 to N80,000, depending on the load and fuel availability.

Economists like Funmi Adeyemi warn that the persistent rise in fuel prices could trigger deeper inflationary pressures, particularly affecting SMEs that operate on thin margins and lack access to affordable credit. This situation creates a vicious cycle of declining consumer purchasing power, increased operational costs, and potential business closures or layoffs.