Doris Uzoka-Anite, Minister of Industry, Trade and Investment, says Nigerian manufacturers lose an estimated $27 billion annually as a result of power shortages which drive up production costs and hamper growth.
Speaking to industry leaders and stakeholders at the inaugural session of the Nigeria Industrial Revitalisation Dialogue Series, held in Abuja, the minister noted that Nigeria experiences significant economic losses due to inadequate power supply.
“The impact of inadequate power supply:
The reality is, Nigerian manufacturers lose approximately $27 billion annually due to power shortages. This translates to lower productivity, higher production costs, reduced competitiveness, and fewer job opportunities for our people.
As a result, the contribution of manufacturing to our GDP remains stagnant, hovering around 9 percent, when it should be well above 15-20 percent considering our economic size and potential,” she noted.
Uzoka-Anite explained that a staggering 90 percent of Nigerian manufacturers rely on diesel-powered generators due to unstable power supply, noting that this dependence triples the cost of manufacturing compared to peer countries.
She said that this challenge has hindered the nation’s economic potential, stressing the need to address the power challenge to make manufacturing competitive.
According to a World Bank report she cited, an increased contribution of the manufacturing sector to the GDP from 9 percent to 15 percent could generate an additional $50 billion annually, create millions of jobs, and reduce unemployment, which currently stands at around 33 percent.
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Uzoka-Anite pointed to the potential of public-private partnerships (PPPs) as a pathway to industrial revitalisation, citing examples of successful infrastructure investment models worldwide. She highlighted Vietnam as a country that overcame similar challenges in the 1990s by investing heavily in power infrastructure, which has since positioned it as a manufacturing powerhouse.
She noted, however, that the government was already taking steps to address the issue, referencing initiatives such as the Distributed Access through Renewable Energy Scale-up (DARES) project and the Nigerian Gas Master Plan.
These programmes, she said, aim to reduce the cost of energy through sustainable power solutions, such as leveraging Nigeria’s abundant natural gas reserves to provide industries with affordable energy options. She added that the recent removal of VAT on gas infrastructure was another move by the government to incentivise energy investments.
“The Federal Government is committed to expanding access to clean energy and reducing reliance on costly diesel generators, there are a number of programs such as the Distributed Access through Renewable Energy Scale-up (DARES) project aims to provide over 17.5 million Nigerians with new or improved access to electricity through renewable energy solutions.
“We understand that for manufacturers to thrive, we need to deliver practical, sustainable solutions that ensure affordable, reliable power. With stable energy, we can unlock the full potential of our industries and create millions of jobs our people desperately need,” she said
Uzoka-Anite, therefore, called on all stakeholders to actively engage in discussions to forge a path towards Nigeria’s industrial growth, underscoring the government’s commitment to building a resilient and diversified economy.
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