Analysing the cost of infrastruture failure in a developing economy

Infrastructure had been known as the key constraint to developing economy. Hence, this research analysed the cost of power outages to the business sector of the Nigerian economy using both a survey technique. One strong outcome of this research is that the poor state of electricity supply in Nigeria has imposed significant costs on the business sector. The size of these costs relate to the firm’s procurement of very expensive backup capacity to protect them against the even larger losses coming from frequent and long power fluctuations. Small-scale business owners are more heavily affected by the infrastructure failures as they are incapable to finance the cost of backup power needed to mitigate the impact of frequent outages. The small- scale operators that could afford to back up their tasks have to spend a significant amount of their investment outlay on this. This research campaigns for institutional reforms of the power supply sector in Nigeria.