- High Band A tariffs and outages continue to inflate manufacturing energy costs.
- Manufacturers are increasingly turning to solar, diesel, and mini-grids to sustain their operations.
Manufacturers across Nigeria are raising fresh concerns over the rising operating pressures associated with Nigeria’s increasing manufacturing energy costs. Industry leaders say high electricity tariffs and unreliable supply continue to weaken competitiveness. Although Nigeria does not charge Africa’s highest power tariffs, many factories remain on Band A. This category is subject to a tariff of ₦209.50 per kilowatt-hour and guarantees a daily supply of twenty hours.
However, manufacturers argue that actual supply often falls short of expectations. Consequently, firms still depend heavily on alternative energy sources. These additional costs continue to inflate production expenses across industrial clusters.
Frank Ike Onyebu, Executive Director of Universal Luggage Limited, acknowledged modest improvements in power. However, he said unexplained outages remain frequent. Power interruptions often extend beyond scheduled maintenance periods. As a result, production planning remains difficult.
Last year, outages sometimes lasted two full days. Recently, supply stability improved slightly. Nevertheless, energy costs remain excessive. Companies within the Amuwo-Odofin industrial cluster reportedly pay between ₦180 million and ₦220 million monthly. Therefore, competitiveness continues to suffer.
Onyebu called for a reduction in Band A tariffs. He argued that high electricity bills undermine regional and continental competition. In response, some manufacturers plan to reduce their dependence on the grid. Many now explore solar power for daytime operations. They intend to rely on the grid mainly at night.
Meanwhile, discussions on Independent Power Producers within the industry continue. Manufacturers hope IPP projects will serve industrial zones directly. However, alternative energy sources also remain expensive. Thus, Nigeria’s manufacturing sector continues to face significant energy cost constraints.
In Kaduna, the MAN South-East Chairman, Kabiru Kassim, described last year’s power supply as extremely poor. However, he expressed optimism following an agreement with the Kaduna Electricity Distribution Company. Supply improved towards late 2025. Manufacturers now expect better service in 2026.
Still, Kassim said electricity bills remain high. Monthly costs range between ₦11 million and ₦20 million. These expenses strain operations as input costs rise. Although mini-grids offer relief, regulatory licensing requirements limit the sharing of energy across facilities.
Elsewhere, power conditions have worsened. Dr Chinedu Otakpor-Azih, CEO of Kazih Kits, described severe supply failures in the Iju-Ishaga area. Vandals stole transformer cables, crippling the supply. The distribution company advised businesses to replace the wires themselves. Consequently, factories now rely almost entirely on diesel.
Diesel costs have forced production cuts. Night shifts have stopped completely. Daytime production now ends by 5 p.m. Despite weak supply, electricity bills still arrive regularly. Delivery timelines have stretched from ten days to three weeks.
Manufacturers insist they possess adequate manpower and capacity. However, unreliable electricity prevents full utilisation. Compared with foreign competitors enjoying stable power, Nigerian firms struggle to compete on price and speed.