Nigeria’s manufacturing sector is spending billions of naira to keep factories running as unreliable electricity supply continues to force businesses to depend heavily on alternative sources of power.
The Manufacturers Association of Nigeria (MAN) said manufacturers spent an estimated ₦1.35 trillion on alternative electricity in 2025, representing a 23 per cent increase from the ₦1.1 trillion recorded in 2024.
MAN President, Francis Meshioye, disclosed the figure at the association’s 54th Annual General Meeting and Made-in-Nigeria Exhibition in Lagos.
The rising cost means manufacturers are diverting a growing share of their resources towards powering factories instead of investing in expansion, modern equipment and increased production capacity.
Meshioye warned that the situation was becoming increasingly difficult for businesses already dealing with high production costs, foreign exchange challenges, expensive credit, logistics problems and weak consumer demand.
He said some manufacturers had been forced to shut down factories or reduce operations as the cost of keeping production running continued to rise.
According to him, resources that should have gone into expanding production lines, acquiring new technology and improving productivity are instead being consumed by the need to generate electricity.
The power challenge is occurring alongside another major weakness in the manufacturing sector — dependence on imported industrial inputs.
MAN said Nigerian manufacturers imported raw materials worth about ₦3.53 trillion in the first half of 2025, with approximately ₦1.72 trillion coming from Asia.
The association said reducing dependence on imported raw materials would require greater investment in local production of industrial inputs and intermediate goods.
Despite the challenges, manufacturing capacity utilisation increased from 51.33 per cent in the first quarter of 2025 to 57.50 per cent in the second quarter.
However, MAN warned that the improvement could be reversed if the sector’s structural challenges are not addressed.
Reliable electricity, affordable financing, efficient transportation, regulatory stability and access to locally produced industrial inputs were identified as key requirements for sustainable manufacturing growth.
The warning comes as Nigeria seeks to position itself as Africa’s industrial hub and build a $1 trillion economy.
Director-General of the National Institute for Policy and Strategic Studies, Ayo Omotayo, said manufacturing must play a major role in achieving that ambition, stressing that an industrial policy would have little impact without effective implementation.
For manufacturers, the message is clear: without a significant reduction in the cost of powering factories and doing business, Nigeria’s industrial growth could remain constrained despite rising production capacity.
