Nigeria’s Telecom Sector Bleeds $350 Million Annually on Diesel Amid Power Crisis – AFC Report

Nigeria’s telecommunications industry spends over $350 million annually on diesel to power its infrastructure, according to the Africa Finance Corporation’s (AFC) State of Africa’s Infrastructure Report 2025. The report blames this enormous cost on the country’s unreliable electricity grid, which has forced telecom companies to rely heavily on diesel generators to keep their operations running. With more than 40 million litres of diesel consumed monthly, operators face rising capital and operating expenditures.

The report highlights that the shift to off-grid power solutions has become more common, especially for telecom towers in rural and remote areas. These towers not only require more expensive energy setups but also suffer from inefficiencies. According to GSMA Intelligence, energy costs for mobile base stations in rural Nigeria can be 37% higher than those in urban areas, discouraging investment in underserved regions. The trend threatens to widen the country’s digital divide.

Another critical concern is how these energy challenges inflate the cost of mobile broadband services. Africa’s mobile networks are less energy-efficient compared to global standards, using approximately 0.24 kWh per gigabyte of data—far more than the global average of 0.17 kWh/GB. This inefficiency is compounded by the use of older network technologies like 3G and contributes directly to higher data costs for end users.

Security issues further complicate the situation. Off-grid tower sites that rely on diesel and batteries are frequent targets for theft, losing vital fuel and battery equipment. This not only disrupts services but increases maintenance and replacement costs. The AFC notes that Nigeria’s dependence on decentralized power sources stems from deep-rooted weaknesses in the national electricity supply, which affects households, businesses, and critical infrastructure like telecoms.

Looking ahead, the report calls for substantial investments in both energy and digital infrastructure. While undersea cable networks have improved, the real bottleneck lies in middle- and last-mile connectivity. To bridge the gap, AFC urges the development of fibre corridors connecting coastal hubs to inland production centres, towns, and rural communities, alongside a parallel push for renewable and hybrid power solutions that can reduce the sector’s reliance on costly and polluting diesel generators.

Source: The Sun