Manufacturing: Over N3trn spent on alternative energy sources in three years

• N781.68bn, 2023; N1.11T, 2024; N1.34trn, 2025    •It’s unprecedented —MAN

• Nigeria must close her energy gap to become Africa’s industrial hub —Former DG, UNIDO

Despite being the foundation on which thriving economies are built, affordable energy may continue to be a hindrance to the nation’s industrial development dream as alternative energy sources continue to eat deep into operation budgets in the manufacturing sector.

Just between 2023 and 2025, a whopping sum of   N3.231 trillion was reportedly spent on alternative energy sources, in the sector, due to the poor electricity supply.

The report presented by the Manufacturers Association of Nigeria (MAN) revealed that  while N781.68 billion was expended on alternative energy sources in 2023 alone, the cost surged astronomically in the subsequent years, 2024 and 2025 to N1.11 trillion and N1.34 trillion, respectively, representing  a cumulative surge of more than 71 percent within two years.

The development, the association argued, had not been without its telling effects on the sector, as industrial growth declined from 7.46 percent in Q2 2025 to 3.96 percent in Q2 2026, despite a 4.43 percent GDP growth in Q2 2026.

Besides, manufacturing’s share of national output also fell to 7.72 percent in Q2 2026 from 9.57 percent in Q1 2025, with strategic manufacturing sub-sectors contracting sharply, signaling possible closure of more factories and companies in the next six months, without a comprehensive, integrated support measures being put in place.

Describing the costs of alternative energy sources to the sector as unprecedented, the immediate past president of  MAN, Otunba Francis Meshioye, in his address at the association’s 54th  Annual General Meeting (AGM), held, in Lagos, identified soaring energy costs as  a major challenge for operators, since it now consumes half of the overhead costs in the sector.

“The estimates reflect the enormous financial burden imposed by unreliable public power supply, inadequate energy infrastructure and unbearably high energy prices,” he stated.

The former MAN boss argued that the growing dependence of self-generated electricity had become one of the single largest cost drivers for the nation’s manufacturers.

He lamented that absence of reliable energy had continued to erode profitability, weaken competitiveness, and discourage fresh investments.

Meshioye noted that the development had continued to hinder manufacturers from investing their scarce capital in technology upgrades, research, innovation and capacity expansion.

“History offers no example of an industrialised nation, whose factories are powered principally by privately- generated electricity,” he stated.

Meshioye warned that the country might not achieve her ambition of becoming Africa’s industrial hub, until reliable, affordable and sustainable energy becomes the norm rather than exemption.

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The Former Director General, United Nation Industrial Development (UNIDO), Dr. Kandeh Kolleh Yumkella stressed the need for Nigeria to close her energy gap for her to become Africa’s industrial hub.

He described the huge costs manufacturers expend on alternative energy sources as having profound economic consequences for the country.

“The World Bank estimates that unreliable electricity costs Nigeria between N7 trillion and N10 trillion annually, equivalent to five to seven percent of GDP.  Standard Bank’s Africa Trade Barometer places outage-related losses at $26 billion, with a further $22 billion spent on generator fuel, together approaching 10 percent of GDP in 2025,” he added.

The Former Chairman of the Presidential Initiative of Climate Change, Renewable Energy and Food Security of Sierra Leone noted that closing the electricity gap would go a long way in lowering production costs, raising capacity utilisation, substituting imports with domestic value addition, and creating the productive employment the nation’s youth require.