Nigeria’s telecom industry is facing escalating operational costs, largely due to its heavy dependence on diesel-powered generators to keep networks running amid unreliable electricity supply.

The 2025 State of Africa’s Infrastructure Report by the Africa Finance Corporation reveals that, telecom operators in Nigeria burn over 40 million litres of diesel every month.

This results in annual spending of more than $350 million on diesel alone.

The report read, “A growing number of tower sites going off-grid or relying on diesel generators is a cause of concern for several reasons. First, it increases CAPEX and OPEX costs for operators, making investments in rural and remote areas even more prohibitive. In fact, GSMA Intelligence estimates that the energy cost of a mobile base station in rural areas could be 37% more than in urban areas. In Nigeria, for instance, telecom operators consume over 40 million litres of diesel per month, representing a yearly spending of over $350 million.

“Mobile broadband costs are further exacerbated by the higher amount of energy required to power data traffic in Africa (0.24 kWh/ GB compared to a global average of 0.17 kWh/GB), where lower traffic volumes and use of older technologies like 3G are energy inefficient. Second, tower sites that rely on generators and batteries report frequent theft of battery equipment and diesel.”

Nigeria’s weak and unreliable power grid has left telecom operators heavily dependent on diesel generators to maintain network uptime, especially in rural and underserved areas where grid access is limited or non-existent.

The report further underscores the deep-rooted challenges in Nigeria’s energy sector, citing the persistent unreliability of the public power supply and the widespread dependence on petrol and diesel generators.

It read, “In Nigeria, unreliable public supply has pushed millions of households and firms to rely on petrol and diesel generators. Captive generation is especially widespread among industrial and commercial users.”

The growing reliance on off-grid generation solutions in Nigeria underscores the widening disconnect between the country’s energy demand and the limited capacity of its national grid. The rise of decentralised energy systems, such as captive power generation, signals an urgent need for substantial investment in grid infrastructure and renewable energy alternatives to strengthen energy security and support economic development.

The report also points out that Africa’s digital transformation continues to face major obstacles—chief among them is the last-mile connectivity gap.

While Africa has made notable progress in expanding subsea cable infrastructure, much of this capacity remains concentrated in coastal urban hubs. To extend its benefits to underserved areas, significant investment is still needed in middle- and last-mile infrastructure.

This includes the development of fibre corridors that link landing stations at ports to production centres, secondary cities, and rural communities.

The report read, “Nigeria, Egypt, and Kenya are emerging as hubs—but an estimated $7 billion in annual investment is needed to close the data infrastructure gap continent-wide.”