By Annette Ikponmwonba | September 9, 2026
Keypoints
• Nigerian manufacturers spent ₦1.34tn on alternative electricity in 2025, up about 21% from ₦1.11tn in 2024.
• Alternative power spending has risen sharply from ₦25bn in 2014.
• Average daily grid electricity supply reportedly fell from 16.7 hours in H1 2025 to 13.1 hours in H2 2025.
• Several major manufacturers are increasingly using gas, LPFO and generators to reduce dependence on DisCos.
• Rising self-generation costs are putting additional pressure on manufacturers’ margins and competitiveness.
Main Story
Nigeria’s persistent electricity shortages are imposing a growing financial burden on manufacturers, with companies spending ₦1.34tn in 2025 to generate or source alternative power, Data from the Manufacturers Association of Nigeria showed that the amount increased from ₦1.11tn in 2024, representing approximately a 21 per cent rise.
Alternative-power spending has grown sharply over the past decade. It increased from ₦25bn in 2014 to ₦129.95bn in 2016 before declining through 2019. It then began rising rapidly, reaching ₦144.5bn in 2022, ₦781.7bn in 2023, ₦1.11tn in 2024 and ₦1.34tn in 2025, The worsening reliability of grid electricity has prompted some manufacturers to rely more heavily on their own power systems, including gas and LPFO-powered plants, to prevent production interruptions.
The Issues
The central issue is the high cost and unreliability of electricity available to Nigerian manufacturers, Factories require stable electricity for continuous production. Frequent outages force businesses to switch to alternative sources, increasing energy costs and disrupting production.
This creates a competitive disadvantage because manufacturers must absorb expenses that could otherwise go towards expansion, new equipment, employment and productivity improvements, The situation is also occurring alongside weak consumer demand, inflationary pressures and high operating costs, making it harder for manufacturers to pass the full cost of production on to consumers.
What’s Being Said
MAN said grid reliability deteriorated significantly in 2025, with average daily electricity supply falling from 16.7 hours in the first half of the year to 13.1 hours in the second half, Industry stakeholders have called for more reliable grid electricity and greater investment in alternative energy infrastructure to reduce manufacturers’ dependence on expensive self-generation, The growing use of gas and LPFO by major companies indicates that some manufacturers are increasingly treating alternative power as a regular part of their operations rather than merely an emergency backup.
What’s Next
Manufacturers are likely to continue investing in captive power, gas generation and other off-grid solutions if grid reliability remains poor, For the government and electricity regulators, the challenge is to encourage investment in generation, transmission and distribution while making electricity more dependable for industrial users.
Bottom Line
Nigeria’s manufacturers spent ₦1.34tn simply keeping their factories powered in 2025. The rising bill demonstrates how unreliable electricity has become a major production cost and a threat to industrial competitiveness, Unless grid reliability improves, manufacturers are likely to continue shifting towards self-generation and spending more to keep production running.
