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Energy has a major impact on socio-economic development by playing a key role in economic, social and political advancement of any Nation. Inadequate supply of energy limits advancement in all spheres thereby causing depreciation in the quality of life among citizens. Small scale businesses in Nigeria also have their fair share of the effects of inadequate energy supply in Nigeria.

The aim of this study is to analyze the awareness, economic and environmental effects and attitudes of generator usage by small scale businesses and to bring about awareness on the alternatives and benefits of national grid system.

This study analyses how small scale businesses in Nigeria manages to keep business alive by using alternative energy supply such as diesel-fuel generator. This challenge facing small scale business sector is due to the inadequate power supply. The effect of generator usage on their businesses and the environment was analyzed in this study. To successful achieve the aim of the study, a hundred small scale business owners in Aku-re, Ondo State and Benin City, Edo State, both in Nigeria were interviewed face-to-face.

The results shows that, 77% of business owners didn’t see generator usage as environ-mental friendly and 71% also did not see it as yielding profit to their businesses. Con-sidering their annual turnover, 74% of small scale businesses were willing to pay more for constant electricity supply that is environmental friendly. In addition, businesses with lesser income spend 46% of their annual income on fuelling and maintenance of their generator. The age range that are into small scale businesses were between 20 – 24 years with highest rate of 32%. This shows that more youth are willing to start creative and innovative enterprise to reduce the unemployment rate in the country if there is sta-ble energy supply. This study also suggested some solutions to improve Nigeria’s power supply and help businesses to grow. It is expected that this study will help policy mak-ers, stake holders, investors and business owners to understand the effect of generator usage as an alternative power supply on the economy and the environment.


            1.1 Aim of Study

            2.1 Basic history of Nigeria
                        2.1.1 Basic Data
            2.2 Aim of the study
                        2.1.2 Theoretical Frame work

            3.1 Functional Electric Grid
                        3.1.1 Accessibility of power supply
                        3.2   Generator as an alternative
                        3.2.1 Generator and its challenges

            4.1 Small scale business in Nigeria
            4.2 Impact of small scale business on the economy
            4.3 Challenges of operating small scale business in Nigeria


            6.1 Background information
            6.2 Generator usage in small scale businesses
                        6.2.1 Cost of implementation and maintenance
                        6.2.2 Effects of generator usage on small scale business
                        6.2.3 Effect on health and environment
            6.3 Life cycle of national grid
                        6.3.1 Cost of implementation and maintenance
                        6.3.2 Effect of national grid on small scale business
                        6.3.3 Tariffs and turnover

            7.1 Power supply alternatives for small scale business
            7.2 Solar Energy
            7.3 Wind Energy
            7.4 Economical loss from using generator as an alternative
            7.5 Economy benefit from improved national grid system



Going to a salon to make my hair in Nigeria was a norm for everyone back home. When I was told the price, it was clearly higher than the usual price. Immediately I was told the increase was due to the fact that there was no constant power supply and generator was in use to keep customers and give good service.

Energy has a major impact on socio-economic development by playing a key role in economic, social and political advancement of any Nation. Inadequate supply of energy limits advancement in all spheres thereby causing depreciation in the quality of life among citizens.

In Nigeria, it’s a phenomenon that as soon as there is short of power supply, a substitute called fuel or diesel generator is been used. In homes, offices, churches, mosques, social gatherings and even market area, it has become a norm for everyone to use generator due to unreliable power supply system in the country. Currently, about 90% of busi-nesses and 30% of homes is powered by generator in Nigeria (Niyi Awofeso, 2011).

The usage of generator seem to be the best available alternative to setting up an effec-tive small scale business in Nigeria because when compared to solar energy or biogas converter, it is affordable and easy to operate with any prior knowledge about technol-ogy. However, most entrepreneurs in Nigeria do not understand the overall effect of generator usage, some only realise that maintaining a generator system (such as cost of fuelling) is a challenging factor compared to when using the National functional grid which has limited supply.

An analysis of Nigeria’s electricity supply problems and prospects found that the elec-tricity demand far outstrips the supply, hindering the country’s development, notwith-standing the abundance of energy resource across the country (Ajao et al, 2009).

More also, economic wise the nation, suffers loss due to business depending more on use of generator. This increases the cost of operation and in turn making services pro-vided quite expensive in a country where only about 61,2% lives below World poverty standard (This Day Live, 2013).

Furthermore, the dependence on generator for alternative power supply has crippled small scale businesses which are a key integral for any economic development. Operating small scale businesses can be competitive and challenging especially in a country with population of about 160million people. Shortage of power supply can also discour-age people from starting small scale business. Several small scale businesses are closing every day in Nigeria, some are at the verge of collapsing due to inadequate power sup-ply. A major factor affecting these businesses is inadequate power supply which brings about the alternative for generator usage. However, maintaining generator for business can be challenging alongside with keeping a new business alive.

According to Sambo, adequate energy has a major impact on the modern day life and will also improve the Nigeria’s development to be able to compete on the international market level (2008). There is only about 40% of Nigeria’s population having access to electricity which indicates the reason why development has been at a slow rate after her independence since 1960 (Iwori, 2008).

From experience, it is easy to identify an industrial or market area in Nigeria due to the noise coming from generator usage. There is however limit to amount and level of noise an individual is expected to be exposed to per day. The situation of people working in such environment can be hectic knowing that they are exposed to an increasing level of noise from generator on daily basis. It is known that noise has effect on human system by reducing her thinking ability and IQ when exposed to noise above 80dB daily over a long time range, noise also causes sleep and psychological disorders (Rauno Paakonen, 2012). Currently, there are no measurements for noise level on most of the generators used in market areas in Nigeria.

The health risk associated with generator usage is also to be considered, knowing that operating generator requires the use of diesel or fuel which is products from fossil fuel. When burning fossil fuel there is emission of greenhouse gases such as CO2, SO2 and NOx which depletes the ozone layer and this in turn has negative effect on the environ-ment. Diesel exhaust contains more than 40 air pollutants which are suspected to be cancer causing substances; benzene, arsenic and formaldehyde (Niyi Awofeso, 2011).

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