By Olatunbosun Obafemi
Lagos, Nigeria — Manufacturers in Nigeria spent a staggering ₦1.11 trillion powering generators in 2024, underscoring the persistent challenges posed by unreliable electricity supply and surging fuel prices. The Manufacturers Association of Nigeria (MAN) disclosed the figure in its H2 2024 Economic Review, released on Monday.
The report highlights a 42.3 per cent increase in alternative energy expenditure compared to ₦778.68 billion recorded in 2023. On a half-year basis, spending jumped from ₦450.80 billion in H1 2024 to ₦790.07 billion in H2 2024 – a 75 per cent surge.
Sectoral data revealed that the Food, Beverage and Tobacco industry led alternative energy consumption, spending ₦474.41 billion, up from ₦354.76 billion in 2023. The Chemical and Pharmaceutical sector saw costs double to ₦284.68 billion, while the Non-Metallic Mineral Products sector incurred ₦138.49 billion, marking a 33.7 per cent increase. The Textile, Apparel and Footwear industry recorded a fourfold jump in energy expenses, from ₦6.97 billion in 2023 to ₦26.45 billion in 2024.
Despite these figures, MAN reported a modest improvement in grid electricity supply, with average daily availability rising to 13.3 hours in 2024, compared to 10.6 hours in 2023. Supply further improved in the second half of the year, averaging 15.2 hours daily, up from 11.4 hours in H1.
However, the gains were tempered by electricity tariff hikes, particularly for Band A consumers, where prices soared by over 200 per cent, placing additional strain on manufacturing operations. The report also cited 12 incidents of national grid collapse during the year, which disrupted industrial activity.
On the productivity front, capacity utilization in the manufacturing sector inched up to 57.0 per cent in 2024, from 55.1 per cent in 2023. The second half of the year saw a 1.2 percentage point improvement over the first half.
Persistent macroeconomic headwinds -including volatile foreign exchange rates, high inflation, and rising interest rates – continued to undermine growth prospects. Nevertheless, the Non-Metallic Mineral Products, Motor Vehicle and Miscellaneous Assembly, and Chemical and Pharmaceutical sectors showed notable performance improvements.
MAN Director-General Segun Ajayi-Kadir acknowledged the resilience of Nigerian manufacturers in the face of adversity but cautioned that the sector remains under pressure.
“High production costs, foreign exchange volatility, and weakened consumer demand have significantly impacted output,” Ajayi-Kadir said. “While local sourcing of raw materials has improved, sustainable growth hinges on stabilizing the macroeconomic environment, improving power supply, and ensuring affordable access to finance.”
Gabriel Idahosa, President of the Lagos Chamber of Commerce and Industry (LCCI), echoed these concerns, pointing to the mounting difficulties faced by Micro, Small, and Medium Enterprises (MSMEs).
“Insecurity, erratic electricity, and unresolved issues with metering are driving many small businesses to shut down or scale back,” Idahosa noted. “MSMEs are further burdened by meter-related discrepancies, including unpaid refunds and uncredited balances during transitions.”
He called for urgent government intervention through targeted electricity subsidies, clear regulatory policies, and a robust refund mechanism to safeguard Nigeria’s small business sector.
As the manufacturing landscape grapples with structural challenges, stakeholders are urging the government to implement reforms that will ensure reliable, affordable energy, and create a supportive business environment for industrial growth.
