Nigerian manufacturers spent ₦1.34 trillion on electricity from alternative sources in 2025 as unreliable grid supply pushed more of the cost of powering factories onto businesses. The spending, based on data from the Manufacturers Association of Nigeria, was 21 percent higher than the ₦1.11 trillion recorded in 2024.

The figure shows how deeply electricity shortages have become embedded in the cost of manufacturing in Nigeria. Instead of depending solely on distribution companies, factories increasingly have to provide their own power to keep machines running and avoid interruptions to production.

The situation worsened in the second half of 2025. MAN said manufacturers received an average of 13.1 hours of grid electricity per day during the period, down from 16.7 hours in the first half of the year.

The decline meant factories had to make up for more hours of lost grid supply with their own generating capacity. For businesses running energy-intensive machinery, even short interruptions can disrupt production schedules, damage equipment, or raise operating costs.

That gap has made alternative power a necessity for many businesses rather than a backup option.

The scale of the spending also shows how quickly the cost of alternative electricity has grown. Manufacturers spent ₦781.7 billion on alternative power in 2023 before the figure crossed ₦1 trillion in 2024.

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Large manufacturers have invested in gas and other forms of private generation to reduce their exposure to outages. NERC data shows that companies such as Dangote Industries, Flour Mills of Nigeria, Lafarge Africa, Nigerian Breweries and Nestlé Nigeria operate their own power generation facilities.

Dangote Industries generated about 1,500MW in 2025, according to Aliko Dangote, while the Dangote refinery has a 435MW power plant. Pure Flour Mills also received approval from NERC to generate 546MW.

The growing reliance on private electricity comes at a difficult time for manufacturers, who are already facing high costs for raw materials, transport and finance. Every additional naira spent generating power adds to the cost of producing goods and can ultimately feed into prices paid by consumers.

For smaller manufacturers, the burden can be even harder to absorb because they often lack the capital to build large dedicated power plants. This leaves many businesses dependent on generators and fuel purchases, making their operating costs vulnerable to changes in energy prices.

Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, said the cost of self-generation was undermining the competitiveness of Nigerian manufacturers.

“Manufacturers are compelled to self-generate energy at enormous cost, undermining competitiveness and eroding profitability,” he said.

For MAN, improving electricity supply is therefore central to bringing down production costs and supporting industrial growth.

The association’s latest figures point to a broader problem in Nigeria’s power sector: manufacturers are not simply losing production hours when the grid fails. They are spending more than ₦1 trillion a year to make up for those failures themselves.

Meiza Nigeria