The manufacturing sector in Nigeria continues to grapple with an escalating energy crisis, spending a staggering N676.6 billion on alternative power sources during the first half of 2025, according to latest industry data.
Massive Energy Costs Despite Slight Improvement
The Manufacturers Association of Nigeria (MAN) revealed these alarming figures in its State of Affairs Report for October 2025, highlighting the persistent challenge of unreliable electricity supply despite a marginal decrease from the N708.1 billion recorded in the second half of 2024.
Dr. Oluwasegun Osidipe, MAN's Director of Research and Economic Policy Division, presented the report, emphasizing that even with this enormous expenditure on generators and other backup systems, manufacturers still struggled to meet their power requirements adequately.
Severe Operational Constraints and Job Losses
The energy crisis has had devastating consequences on the manufacturing sector, with companies recording 18,935 job losses in the first six months of 2025 alone. The October Manufacturers' CEOs Confidence Index (MCCI) identified inadequate power supply and the high cost of electricity as among the most severe operational constraints facing manufacturers in the third quarter.
Former MAN Vice President John Aluya explained the compounding effect of the energy challenges: "Alternative energy at the moment is not meeting our production needs, because for you to get alternative energy, you have to invest first."
Aluya noted that these additional costs ultimately increase production expenses and weaken the competitiveness of Nigerian manufacturers in both domestic and international markets.
Legal Battles and Government Intervention Calls
MAN has been actively challenging what it describes as unsustainable energy policies, including filing a lawsuit against the Nigerian Electricity Regulatory Commission (NERC) and electricity distribution companies in April 2024 over the controversial tariff regime. Although the Federal High Court dismissed the case on October 7, the association continues to advocate for policy changes.
The manufacturing body strongly opposed the over-200% increase in electricity tariff for band A users, arguing that such hikes could cripple the already struggling sector.
In its recommendations, MAN urged the Federal Government to expand embedded power generation and support industrial clusters with gas-powered or renewable mini-grid solutions to ensure reliable and affordable electricity for manufacturers.
The association's report comes amid other significant challenges facing the sector, including manufacturers recording N1.4 trillion worth of unsold goods in 2024, largely attributed to high inflation and declining consumer purchasing power.
