LAGOS, Nigeria — Nigerian manufacturers spent ₦3.231 trillion on alternative energy sources between 2023 and 2025 as unreliable public electricity supply and rising energy prices increased the cost of running factories, according to the Manufacturers Association of Nigeria (MAN).
The expenditure rose from ₦781.68 billion in 2023 to ₦1.11 trillion in 2024 and ₦1.34 trillion in 2025, representing an increase of about 71.4% over the three-year period.
The rising bill has diverted funds that manufacturers could otherwise invest in equipment, technology, research, product development and factory expansion, the association said.
Otunba Francis Meshioye, immediate past president of MAN, identified energy costs as a major constraint on the sector during the association’s 54th Annual General Meeting in Lagos. He said energy accounted for about half of manufacturers’ overhead costs.
“The estimates reflect the enormous financial burden imposed by unreliable public power supply, inadequate energy infrastructure and unbearably high energy prices,” Meshioye said.
He warned that increasing reliance on self-generated electricity was eroding profitability and discouraging new investment, as companies diverted resources to maintaining power supplies instead of expanding production.
“History offers no example of an industrialised nation, whose factories are powered principally by privately-generated electricity,” he said.
The figures come amid a slowdown in Nigeria’s industrial growth. According to the data presented, industrial growth fell from 7.46% in the second quarter of 2025 to 3.96% in the second quarter of 2026, while overall gross domestic product grew by 4.43% in the second quarter of 2026.
Manufacturing’s share of national output also declined from 9.57% in the first quarter of 2025 to 7.72% in the second quarter of 2026.
MAN warned that continued pressure on manufacturing subsectors could threaten factory operations and employment without comprehensive measures to address the sector’s challenges.
Dr. Kandeh Kolleh Yumkella, a former director-general of the United Nations Industrial Development Organization, said Nigeria must address its electricity supply deficit to achieve its ambition of becoming Africa’s industrial hub.
Yumkella cited World Bank estimates that unreliable electricity costs Nigeria between ₦7 trillion and ₦10 trillion annually, equivalent to 5% to 7% of gross domestic product. He also cited Standard Bank’s Africa Trade Barometer, which puts outage-related losses at $26 billion and generator fuel expenditure at a further $22 billion in 2025.
The combined costs approach 10% of GDP, according to the figures he presented.
Yumkella said more reliable electricity would lower production costs, increase factory capacity utilisation, encourage domestic value addition and create jobs for Nigeria’s growing youth population.
For manufacturers, the rising cost of alternative energy highlights the financial pressure created by an electricity system that forces businesses to supplement public power with privately generated electricity.
Without more reliable and affordable electricity, energy costs are likely to remain a significant constraint on investment, domestic production and the competitiveness of Nigerian-made goods.
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