Nigerian factories burned through N1.4 trillion on power generation last year. The staggering sum reveals how deeply the energy crisis cripples manufacturing competitiveness.
Manufacturers have no choice but to rely on generators. Grid supply remains too unreliable to keep production running.
At BusinessDay's Manufacturing Conference in Lagos recently, officials presented fresh data on the crisis. Oluchi Odimuko, assistant director of sectoral affairs at the Manufacturers Association of Nigeria, disclosed the figures to reporters.
Factory spending on alternative power jumped to N1.35 trillion in 2025. That's a jump of 21.6 percent from N1.11 trillion the year before.
"Electricity supply is irregular and manufacturers have to find alternative power," Odimuko told the conference. Without urgent reform, she warned, the sector cannot escape these crushing costs.
Nigeria's new National Industrial Policy, unveiled in February, made energy reform its centrepiece. Renewable energy adoption and private power solutions now anchor the government's industrialisation strategy.
The Electricity Act 2023 gave states and investors clear powers to generate electricity locally. Yet implementation remains painfully slow across the country.
Current grid capacity sits at just 5,000 Megawatts. Demand towers above 100,000 Megawatts, leaving most factories in the dark.
Femi Egbesola, president of the Association of Small Business Owners of Nigeria, sounded the alarm at the conference. "Power is a major challenge that has crippled a lot of businesses," he said.
Without tackling the energy problem, Egbesola noted, sustainable industrialisation remains impossible. He called on government to prioritise power sector reform now.
Breweries, pharmaceutical firms, banks and food processors all report doubled operating costs. Diesel and gas prices have surged over 100 percent in recent months, worsening the squeeze.
Energy costs now consume 40 percent of factory operating budgets. MAN data shows how severely power shortages erode profitability across industries.
Nigeria's power infrastructure is aging badly. Poor maintenance culture compounds the problem at every level.
South Africa generates 68,000 Megawatts daily from Eskom, its state utility. Ruth Owojaiye, corporate director at British American Tobacco Nigeria, highlighted the contrast at the conference.
"Their asset management for electricity is very good," she said of South Africa. "They can generate much more electricity than Nigeria, despite having similar or older infrastructure."
Nigeria's government has set an ambitious target: growing manufacturing from 9 percent of GDP to 25 percent by 2030. But without solving the power crisis, that dream looks increasingly out of reach.
Manufacturers say the policy looks good on paper. Real implementation on the ground remains the critical test ahead.
