Nigerian manufacturers spent an estimated N1.35 trillion on alternative electricity in 2025, representing a 23 per cent increase from the N1.1 trillion recorded the previous year, as the cost of keeping factories running continues to put pressure on industrial investment.
The Manufacturers Association of Nigeria (MAN) said the rising expenditure on self-generation was occurring alongside factory closures and production cuts, warning that the burden was becoming increasingly difficult for businesses to sustain.
The association’s President, Francis Meshioye, raised the concern at the opening of MAN’s 54th Annual General Meeting and Made-in-Nigeria Exhibition in Lagos. Brandspur Brand News reports that he identified energy costs, foreign exchange exposure, expensive financing, logistics, regulatory charges and weak consumer demand among the pressures affecting manufacturers.
Meshioye also highlighted Nigeria’s continued dependence on imported production inputs. He said manufacturers imported about N3.53 trillion worth of raw materials in the first half of 2025, with approximately N1.72 trillion coming from Asia.
The figures, he argued, underscored the weakness of domestic supply chains and the difficulty of achieving deeper local value addition when manufacturers remain heavily reliant on imported materials and intermediate inputs.
The pressure comes as the Federal Government seeks to position Nigeria as an industrial hub through its newly approved national industrial policy. Meshioye said the policy would need to deliver practical improvements in reliable and affordable energy, access to finance, industrial inputs, logistics, regulatory certainty and the ability of businesses to expand.
Central Bank data cited by the MAN president showed that manufacturing capacity utilisation rose from 51.33 per cent in the first quarter of 2025 to 57.50 per cent in the second quarter.
He, however, cautioned that the increase should not be viewed separately from the mounting costs facing factories. Higher capacity utilisation, he said, would have limited significance if manufacturers continued to struggle with the cost of producing goods.
Meshioye called for faster implementation of the national industrial policy and urged the government to enforce Executive Orders 003 and 005, which promote patronage of locally manufactured goods.
He also advocated sanctions against ministries, departments and agencies that fail to comply with the orders, while urging government institutions and political parties to prioritise Nigerian-made products during the forthcoming electoral period.
Also read: https://brandspurng.com/2020/10/22/nigeria-venture-plans-to-raise-1-2-billion-to-fix-power-gap/
The argument is that increased local procurement during the election cycle could provide additional demand for domestic manufacturers and support businesses beyond the immediate political season.
For manufacturers seeking to compete within the African Continental Free Trade Area, the challenge extends beyond increasing output. Meshioye said Nigerian firms must become more competitive on price, quality, standards, reliability and delivery while building stronger domestic supply chains and investing in technology.
The Director-General of the National Institute for Policy and Strategic Studies, Professor Ayo Omotayo, said Nigeria’s economic ambitions would remain difficult to achieve without a stronger manufacturing base.
Omotayo said manufacturing could potentially account for as much as 25 per cent of the country’s Gross Domestic Product, compared with about 3.3 per cent currently.
He also called for a dedicated policy on raw materials, arguing that continued spending of trillions of naira on imported industrial inputs was unsustainable.
Electricity was another major concern raised by the NIPSS director-general, who said manufacturers needed cheaper and more dependable power to bring down production costs. He disclosed that NIPSS was proposing that the Federal Government examine the power and energy sector for faster ways of improving electricity supply to manufacturers.
Omotayo further linked Nigeria’s manufacturing structure to pressure on the foreign exchange market, saying dependence on imported finished products and raw materials contributes to demand for dollars.
He called for closer collaboration between universities and manufacturers to develop locally produced components for industries that currently depend on imported machinery and spare parts.
MAN Director-General, Segun Ajayi-Kadir, said the Made-in-Nigeria exhibition demonstrated the breadth of products already being produced locally, but acknowledged that energy costs, production inputs, logistics and regulation continued to undermine industrial competitiveness.
He said the success of the national industrial policy would ultimately be measured by whether it produces tangible improvements in industrial investment, productive capacity, productivity, local value addition, employment and the ability of Nigerian manufacturers to compete.
