For many Nigerian manufacturers, keeping a factory running has become an expensive part of doing business. Electricity bills, diesel purchases and the cost of maintaining independent power systems compete with the money that should be going into production, expansion and new equipment.

Now, industry leaders are making a case for technology as part of the answer, arguing that manufacturers need to rethink how they generate power and manage energy within their factories.

The Manufacturers Association of Nigeria (MAN) estimates that manufacturers spend about 40 percent of their profits dealing with energy challenges. The burden has made it harder for businesses to control operating expenses and remain competitive, particularly with unreliable grid electricity and high tariffs adding to production costs.

At its 2026 Manufacturers Energy Security and Energy Efficiency Summit in Lagos, the association drew attention to the need for factories to adopt more efficient energy systems and use emerging technologies to reduce waste.

The proposed approach goes beyond installing alternative power sources. MAN President, Ifeanyi Okoye, said the association’s industrial energy cost reduction and adoption programme would promote factory rooftop solar installations, battery storage, captive natural gas power and smart energy management systems.

These options could give manufacturers more control over their electricity supply while reducing the cost of running production lines. But the investments require substantial financing, which is why the summit also explored access to long-term loans, climate funds, green investments and asset-financing arrangements.

Also Read: Gas shortages and low water levels squeeze electricity supply

Technology featured prominently in the discussions, particularly artificial intelligence (AI). MAN Director-General, Segun Ajayi-Kadir, said smart manufacturing systems could help factories monitor energy consumption, identify operational inefficiencies, reduce production losses and improve product quality.

For businesses operating with tight margins, better control over energy use and production processes could translate into meaningful savings. AI could also help manufacturers make more informed decisions about how their facilities operate.

However, the promise of smarter factories comes with a practical challenge: advanced technology cannot do much in an environment where electricity supply is unreliable and digital infrastructure is inadequate.

Ulf Brackmann, Chief Executive Officer of IKAPITAL Family Office & Friends, who delivered the summit’s keynote address, said AI could improve industrial productivity and create employment opportunities rather than simply replace workers. But he cautioned against presenting the technology as a cure-all for manufacturing problems.

“AI is very often seen as a magic pill or sold as a magic pill to manufacturers as if it would solve all the problems. No, it doesn’t,” he said.

His warning points to a gap manufacturers must address before expecting significant returns from digital investment. Factories need dependable electricity and the systems required to support AI before the technology can deliver the promised efficiencies.

Chairman of the Board of Directors of Manufacturers Power Development Company Limited (MPDCL), John Aluya, said the cost of generating electricity independently had already weakened manufacturers’ profit margins and competitiveness. He identified solar photovoltaic systems, battery storage, captive gas power and energy efficiency as options worth exploring, alongside opportunities to monetise carbon credits.

The summit was organised by MPDCL, GIZ and the Nigerian Energy Support Programme (NESP).

For manufacturers, the challenge is no longer simply whether to adopt new technology. It is how to finance and power the systems that make such investments worthwhile. Until the cost and reliability of energy improve, the promise of smarter production will remain difficult for many factories to realise.

Meiza Nigeria