By Adewunmi Oluwaseun
Nigeria’s manufacturing sector is reeling from crushing energy costs, with manufacturers spending a staggering ₦1.11 trillion on alternative energy sources in 2024 alone, according to the latest Economic Review by the Manufacturers Association of Nigeria (MAN).
This figure represents a 42 per cent spike from the ₦781.7 billion spent in 2023 — and a mind-boggling 1,475 per cent increase in just four years, as firms scramble to stay afloat amid persistent power failures, inflation, and rising fuel prices.
The review paints a grim picture of the sector’s survival amid 12 national grid collapses, soaring diesel and petrol costs, and the introduction of higher electricity tariffs that saw Band A consumers paying over 200 per cent more in 2024.
The food, beverage and tobacco industry was the hardest hit, racking up ₦229.41 billion in energy bills, followed closely by the chemical and pharmaceutical sector at ₦208.68 billion.
Even the textile and footwear industry, already struggling, saw costs jump from ₦6.97 billion in 2023 to ₦26.45 billion.
As manufacturers turned to costly private power generation, the sector’s overall cost of doing business skyrocketed.
“The central bank’s aggressive monetary tightening and interest rate hikes to 27.5 per cent have made borrowing unaffordable,” said MAN’s Director General, Segun Ajayi-Kadir.
Investment also took a hit, dropping 11.3 per cent to ₦2.85 trillion.
Job creation plunged by 37.83 per cent, with over 35,000 workers exiting the sector in two years, even as inventories of unsold goods surged by 87.5 per cent to ₦2.14 trillion.
Although local sourcing of raw materials improved marginally to 57.1 per cent due to forex challenges, the report suggests that the sector remains hampered by weak consumer demand, inflationary pressures, and an unstable economic climate.
Despite a modest 1.7 per cent rise in real manufacturing output to ₦7.78 trillion, the industry’s outlook remains fragile.
“The cost of staying in business is becoming unbearable,” the report warns. “Without urgent reforms in power and fiscal policy, more manufacturers may be pushed to the brink.”
