Edward Esene, who operates a co-working and incubation hub in the busy Alausa district of Lagos, is preparing to pack up and move. His decision isn’t based on a need for more square footage or a better location for his clients. Instead, it is a move driven entirely by the soaring cost of keeping the lights on.
For Esene, the monthly power bill in Alausa has become an unbearable weight. He notes that even a modest month costs over ₦200,000, and when the heat calls for full air conditioning, that figure easily doubles to ₦400,000. While Nigeria’s electricity struggles are a long-standing narrative, the recent shift in how power is priced has created a new set of headaches for small business owners. Under the current service-based tariff system, consumers are categorized into bands. Esene’s hub sits in Band A, which promises up to 20 hours of power a day but comes with a hefty price tag.
The disparity is stark when compared to residential rates. According to data analyzed by Zoyols News, ₦20,000 gets Esene about 88 units of electricity at his office, whereas at his home in a Band B area, the same amount buys nearly 148 units. This unforgiving math is forcing many operators to reconsider their locations. Esene expects that by moving his business to a Band B zone, he could slash his energy expenses by half, saving more than ₦2.5 million annually.
This predicament is a snapshot of a larger crisis within the shared workspace industry. As remote work and the tech sector have grown in cities like Lagos, Abuja, and Port Harcourt, co-working spaces have become essential. They offer the stability that many Nigerians cannot find at home—reliable internet and constant power in a country that generates less than 6,000 megawatts for over 200 million people. Yet, for the operators providing these sanctuaries, electricity can swallow up to 40% of their total revenue.
Just a few kilometers away in Ikeja, Florence Chikezie, founder of Rehdalia, faces a similar struggle. Despite also being in a Band A zone, she says the promised reliability has often been a mirage. Recent outages have left her with only a few hours of grid power in the mornings, forcing her to rely heavily on diesel generators. The timing could not be worse, as diesel prices recently spiked from ₦990 to ₦1,690 per liter in less than a week.
These rising costs are pushing profit margins to the brink of extinction, but raising membership fees is a risky move. Most clients are freelancers and startups who are extremely sensitive to price changes. If the cost of a desk becomes too high, they simply retreat to working from home or shift to virtual meetings. This leaves operators like Chikezie and Esene in a tight spot, where even a full house doesn’t necessarily guarantee a profit.
To stay afloat, some hubs are getting creative. Esene uses a dual pricing model where well-funded government or development programs effectively subsidize the desks of independent freelancers. Others are turning their spaces into event centers on weekends to find new streams of income. While many dream of switching to solar power to escape the cycle of high tariffs and expensive diesel, the initial investment remains out of reach for most.
For many entrepreneurs in this space, the reality is blunt: the traditional co-working model is under immense strain. The government’s attempt to link tariffs to supply was meant to improve service, but for businesses where electricity is the core product, the high cost of “good” power is becoming just as damaging as no power at all. For Esene, the choice to move to a cheaper, albeit less reliable, power band is a survival tactic that highlights the unique challenges of doing business in Nigeria’s current economic climate.
