Nigerian manufacturers spent N1.34tn on alternative electricity sources in 2025 as persistent power outages forced factories to rely increasingly on diesel generators, gas and other off-grid energy solutions to sustain production.
Data from the Manufacturers Association of Nigeria (MAN) obtained by The PUNCH showed that manufacturers’ spending on alternative power increased by about 21 per cent, rising from N1.11tn in 2024 to N1.34tn in 2025.
The latest increase highlights the growing cost of unreliable electricity supply to Nigeria’s industrial sector, with manufacturers increasingly bearing the financial burden of generating the power needed to keep their factories running.
Manufacturers’ Power Costs Surge
MAN data showed that expenditure on alternative electricity has risen significantly over the past decade, despite fluctuations in some years.
Manufacturers spent N25bn on alternative power in 2014, with the figure rising to N59bn in 2015 and N129.95bn in 2016.
The expenditure fell to N117.4bn in 2017 and declined further to N93.11bn in 2018 and N61.38bn in 2019.
Spending rose to N81.91bn in 2020 before dropping to N71.22bn in 2021.
However, the cost began rising sharply from 2022, reaching N144.5bn that year. It surged to N781.7bn in 2023 before crossing the N1tn mark at N1.11tn in 2024.
By 2025, manufacturers’ alternative power bill had climbed further to N1.34tn.
The development has raised concerns about the competitiveness of Nigerian manufacturers, particularly as businesses continue to face weak consumer purchasing power and pressure on operating margins.
Grid Power Supply Drops
MAN, led by Segun Ajayi-Kadir, said grid reliability deteriorated significantly in 2025.
According to the association, average daily power supply dropped from 16.7 hours in the first half of 2025 to 13.1 hours in the second half of the year.
The decline has increased manufacturers’ dependence on alternative energy sources, adding substantially to production costs.
Industry stakeholders have continued to call for more reliable electricity supply and increased investment in alternative energy infrastructure to reduce dependence on expensive diesel-powered generation.
Manufacturers Turn Away From DisCos
Many manufacturers are reportedly reducing their reliance on electricity distribution companies, popularly known as DisCos, by deploying gas and low-pour fuel oil (LPFO) to power their production facilities.
The shift is aimed at reducing losses caused by power interruptions during manufacturing operations.
According to the Nigerian Electricity Regulatory Commission (NERC), several major companies have obtained permits or licences to generate electricity for their operations.
They include Dangote Industries Limited, Flour Mills of Nigeria Plc, Lafarge Africa, Nigerian Breweries Plc, Cadbury Nigeria Plc, Procter & Gamble Nigeria Limited, Seven-Up Bottling Company Plc, Dangote Cement Plc, Guinness Nigeria Plc, Nestlé Nigeria Plc, Unilever Nigeria Plc and Mikano International Limited, among others.
Pure Flour Mills Limited in Rivers State obtained a licence to generate 546MW of electricity in 2025, according to NERC.
Dangote Industries Limited also generated about 1,500MW of electricity in 2025, according to Aliko Dangote. The Dangote Refinery alone operates a 435MW power plant, with capacity capable of meeting the total power requirement of the Ibadan Electricity Distribution Company, based on the comparison cited in the report.
Other companies with generation capacities include United Cement Company of Nigeria Limited with 105MW, Flour Mills of Nigeria Plc with 70MW and Lafarge Cement WAPCO Nigeria Plc with 90MW.
The growing investment in captive and alternative power generation underscores the extent to which unreliable grid electricity continues to affect Nigeria’s manufacturing sector.
