Despite spending an estimated N676.6bn on self-generated power in the first half of 2025 (H1 2025), the Nigerian manufacturing sector was still unable to meet its electricity needs, a report from the Manufacturers Association of Nigeria (Man) says.
The October edition of Man’s Manufacturing State of Affairs Report reveals that grid supply has not only remained unreliable but also unaffordable for industries across the country.
Oluwasegun Osidipe, Man’s director of research and economic policy, warned that energy shortages continue to constrain output despite a slight reduction in generator-related expenses in the opening months of this year compared to late 2024.
Although the costs of alternative energy fell from N708.1bn in H2 2024 to N676.6bn in H1 2025, Man said the burden “remains unsustainable” for firms facing rising inflation, elevated interest rates, and accelerating production costs.
He said inadequate grid supply, high electricity tariffs, and the soaring cost of self-generation ranked among manufacturers’ most severe constraints in Q3 2025, underscoring persistent structural weaknesses in Nigeria’s power market.
Man said the power supply shortage contributed to 18,935 job losses across the sector during the period under review, while raw material imports reached N1.72tn.
The association urged the Federal Government to scale up embedded generation, industrial cluster electricity schemes, and gas- or renewable-powered mini-grids to ensure manufacturers can secure “reliable, affordable off-grid electricity” essential for competitiveness.
This recommendation aligns with recent progress in Nigeria’s Interconnected Mini-Grid (IMG) Programme.
In May, Nigeria completed the first phase of its IMG rollout, supplying power to more than 6,000 customers in Nasarawa, Kano, Ogun and Abuja.
The system demonstrated how hybrid mini-grids can ease dependence on diesel generators, which reportedly cost between ₦600–₦650/kWh in some industrial zones.
Earlier, Man’s director-general, Segun Ajayi-Kadir, warned that electricity—a “critical but inefficiently supplied input”—continues to weaken Nigeria’s industrial base.
“No manufacturer can competitively produce in that kind of environment,” said Ajayi-Kadir, noting that power prices have risen sharply.
He said Man had recommended a more manageable 100% tariff increase that would only be tolerable if supply quality improved, stressing that current tariffs are “for power that is inefficiently generated and run.”