The Nigerian baking industry is facing an unprecedented crisis that has forced more than 80,000 bakeries to shut down operations within just four years, according to industry leaders who warn the entire sector is on the brink of collapse.
Industry in Freefall: From 140,000 to 60,000 Bakeries
Engr. Onuorah Emmanuel, President of the Premium Breadmakers Association of Nigeria (PBAN), revealed the shocking statistics during the association's PBAN Day Out 2025 event held in Lagos. The gathering, themed "The Business of Baking: Pathways to Profit, Productivity and Growth," highlighted the severe challenges facing bread producers nationwide.
Before 2020, Nigeria had approximately 140,000 operational bakeries, but economic pressures have decimated the industry, leaving fewer than 60,000 still functioning today. This represents a loss of over 57% of the country's baking businesses in just four years.
Triple Threat: High Costs, Energy Crisis, and Insecurity
Emmanuel identified multiple factors driving the industry collapse, starting with astronomical production costs exacerbated by multiple taxation systems that manufacturers across all sectors have repeatedly complained about.
"The finances are stifling us; interest rates are astronomical," Emmanuel declared. "You can't go to the bank and get a single-digit loan. All their loans are above 30 per cent."
The energy crisis represents another critical challenge, with many bakeries paying premium rates for Band A electricity but receiving low voltage that forces them to rely on expensive diesel generators for consistent power.
Security concerns in Nigeria's northern region, the country's primary food basket, have crippled local wheat farming efforts. Farmers now pay tolls to bandits or terrorists simply to access their farms, making domestic wheat production increasingly dangerous and impractical.
Import Dependency and Government Intervention
The baking industry's fundamental vulnerability lies in its near-total dependence on imported wheat. Emmanuel disclosed that Nigeria produces only 300,000 metric tons of wheat annually while consuming 5.1 million metric tons, meaning approximately 98% of the wheat used by Nigerian bakeries comes from international sources.
The PBAN president did acknowledge some positive government action, praising President Bola Tinubu for lifting the 15% import duty and Value Added Tax (VAT) on wheat and grains following serious advocacy from PBAN and other stakeholders.
"Before the taxes were removed, we were changing prices almost four times in a month in order to stay afloat," Emmanuel explained, noting that the tax removal has helped stabilize bread prices and reduce constant staff layoffs.
Broader Implications for Nigerian Economy
The crisis in the baking industry reflects wider challenges facing Nigeria's manufacturing sector and small-to-medium enterprises (SMEs). The National Association of Small and Medium Enterprises (NASME) has similarly complained that high interest rates, coupled with low purchasing power, are killing small businesses across the country.
Emmanuel argued that taxation alone cannot grow the economy and that the government must focus on wealth creation if it wants to raise revenue from taxes. He emphasized that fixing security would address multiple economic problems simultaneously, stating plainly: "The government must fix security because if you fix security, you fix everything."
As Nigeria's baking industry continues to struggle, the closure of over 80,000 businesses represents not just an industrial crisis but a threat to national food security and employment, with ripple effects that touch every Nigerian household that depends on affordable bread.
