Nigeria’s industrial ambitions are under growing pressure as manufacturers spend more on alternative energy to keep their businesses running amid unreliable public electricity supply.
The Manufacturers Association of Nigeria (MAN) reported that the sector spent a combined ₦3.231 trillion on alternative energy between 2023 and 2025, highlighting the financial burden of powering factories in the country.
According to the association, manufacturers spent ₦781.68 billion on alternative energy sources in 2023. The figure rose to ₦1.11 trillion in 2024 before reaching ₦1.34 trillion in 2025. This represents an increase of more than 71 per cent over the two-year period.
The rising cost of power generation has added to the challenges facing manufacturers, putting pressure on profit margins and weakening the sector’s competitiveness. MAN warned that the trend could further undermine industrial development without effective government support and improvements in power supply.
The association’s report also showed a decline in industrial growth, which fell from 7.46 per cent in the second quarter of 2025 to 3.96 per cent in the corresponding quarter of 2026, despite Nigeria recording gross domestic product (GDP) growth of 4.43 per cent during the latter period.
Manufacturing’s contribution to national output also dropped from 9.57 per cent in the second quarter of 2025 to 7.72 per cent in the second quarter of 2026.
MAN warned that the contraction of key manufacturing sub-sectors could put more factories at risk of closure over the next six months unless authorities introduce comprehensive and coordinated support measures.
Speaking at the association’s 54th Annual General Meeting in Lagos, its immediate past president, Otunba Francis Meshioye, described the cost of alternative energy as unprecedented. He said energy expenses now account 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,” he stated.
Meshioye explained that manufacturers’ growing dependence on privately generated electricity has become one of the biggest cost pressures facing the sector.
He warned that unreliable power continues to reduce profitability, weaken competitiveness and discourage new investments. The high cost of running generators and other alternative energy systems also limits the funds manufacturers can commit to modern equipment, research, innovation and expansion.
“History offers no example of an industrialised nation whose factories are powered principally by privately generated electricity,” he stated.
The former MAN president argued that Nigeria would struggle to become Africa’s industrial hub without dependable, affordable and sustainable electricity. He stressed that reliable power must become standard practice rather than an exception if local businesses are to expand and compete effectively.
The concern extends beyond factory operating costs to the wider economy, where inadequate electricity supply continues to affect productivity, investment and job creation.
Former Director-General of the United Nations Industrial Development Organization (UNIDO), Dr Kandeh Kolleh Yumkella, also called for urgent action to close Nigeria’s energy gap.
Yumkella said the substantial sums manufacturers spend on alternative power have serious economic consequences, diverting resources that could otherwise support production and business growth.
“The World Bank estimates that unreliable electricity costs Nigeria between ₦7 trillion and ₦10 trillion annually, equivalent to five to seven per cent of GDP. Standard Bank’s Africa Trade Barometer places outage-related losses at $26 billion, with a further $22 billion spent on generator fuel, together approaching 10 per cent of GDP in 2025,” he added.
Yumkella, a former chairman of Sierra Leone’s Presidential Initiative on Climate Change, Renewable Energy and Food Security, said closing the electricity gap could deliver significant benefits for Nigeria’s industrial sector.
More reliable power would help businesses lower production costs, increase capacity utilisation and reduce reliance on imported goods by expanding domestic manufacturing and value addition.
He also stressed that improving electricity access could support the creation of productive jobs for Nigeria’s growing youth population.
The figures underline the importance of affordable energy for Nigerian manufacturers, particularly as businesses face rising operating expenses and growing pressure to remain competitive. Without improvements in electricity infrastructure and supply, manufacturers will continue to spend substantial resources generating their own power instead of investing in innovation and expansion.
For Nigeria to achieve its industrial development goals, reliable electricity will remain essential to strengthening local production, attracting investment and supporting sustainable economic growth.

