Nigerian manufacturers spent N1.4 trillion on power generation in 2025, underscoring the heavy cost burden it continues to impose on the sector.
The figure highlights persistent gaps in grid supply that force factories to rely on diesel and gas generators to maintain operations.
At BusinessDay’s Manufacturing Conference 2026 held recently in Lagos, Oluchi Odimuko, assistant director of sectoral and regulatory affairs at Manufacturers Association of Nigeria (MAN), said factories across the country spent N1.35 trillion on alternative power supply, up 21.6 percent from 1.11 trillion spent in 2024.
Odimuko stressed that the country’s manufacturing sector cannot thrive on unreliable power, warning that without reform, “there’s no way, there’s no how” industry can escape crippling costs.
“Electricity supply is irregular and manufacturers have to find alternative power,” she said at the BusinessDay conference.
Nigeria’s new National Industrial Policy 2025, launched in February, placed energy reform at the heart of its strategy to revitalise the manufacturing sector, with a strong emphasis on renewable energy adoption, state-level electricity autonomy, and private-sector-led power solutions to drive productivity and competitiveness.
The policy aligns closely with the provisions of the Electricity Act 2023, which empowers state governments and private investors to generate, transmit and distribute electricity within their jurisdictions.
Yet the country currently struggles to meet 5,000 Megawatts, a mere five percent of demand, leaving millions without reliable power and factories reliant on costly generators.
“Power is a major challenge that has crippled a lot of businesses. The government must reform the power sector to improve supply for Nigerians,” said Femi Egbesola, president of the Association of Small Business Owners of Nigeria.
“If we don’t tackle the issue of power and other challenges, the country cannot industrialise in a sustainable way,” Egbesola added.
From agro-processors to brewers to banks and pharmaceuticals, operating costs have more than doubled owing to poor power supply.
Nigerian manufacturers rely heavily on diesel and gas to power their factories, and the prices of both commodities have surged over 100 percent in recent months.
Energy cost accounts for 40 percent of factories’ operating costs, according to MAN.
Nigeria’s power infrastructure is as old as the country itself, but a lack of “maintenance culture,” as observed from continental peers, erodes the little gains of the frail structures.
“The asset for electricity in Nigeria is almost or even a lot newer than South Africa, but their asset management for electricity is still very good and they can generate much more electricity than Nigeria,” Ruth Owojaiye, director of corporate and regulatory affairs, British American Tobacco (BAT) Nigeria, said at BusinessDay’s Manufacturing conference.
South Africa generates 68,000 MW per day, with the state-owned utility, Eskom, generating roughly 95 percent.
In February, the Ministry of Trade and Investment launched the Nigerian Industrial Policy, part of which aims to drive Nigeria’s manufacturing sector growth from nine percent, according to the latest GDP figures, to 25 percent by 2030.
But manufacturers say Nigeria’s ambitions will need a driver and implementation. “How quickly can we convert that paper into what impacts the manufacturer? Because there is so much to manufacture, all the resources, both FMCG, minerals, whatever it is.”
“But policies need to work for people to be able to create this product, generate profit, and eventually create the prosperity that Nigeria needs,” she said.
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