The Manufacturers Association of Nigeria (MAN) has called for an urgent increase in Electricity supply, stating that the current average of 4,000 megawatts per day is inadequate for a nation of over 200 million people. Reacting to the proposed electricity tariff hike, MAN’s Director-General, Segun Ajayi-Kadir, warned that rising electricity costs are negatively affecting the Manufacturing sector by increasing production expenses and making local goods less competitive. He noted that the privatisation of the power sector in 2013 was intended to improve electricity supply, but it has failed to deliver the expected results, as operators in the value chain struggle with financial and technical constraints.
Ajayi-Kadir pointed out that Nigeria’s installed electricity capacity is about 10,000 megawatts, but inefficiencies in Power Generation and distribution prevent full utilisation. He criticised the frequent tariff increases, citing data from the National Bureau of Statistics, which showed a decline in electricity supply despite a sharp increase in tariffs. He argued that further hikes would worsen inflation, reduce consumer purchasing power, and push more manufacturers out of business. He also reiterated MAN’s position that Nigeria needs at least 30,000 megawatts of electricity to meet growing demand, warning that without this, businesses will continue to struggle, leading to job losses and economic stagnation.
Rise in tariffs is a burden to Nigerian business owners.
He further stressed that while electricity supply continues to fall short, Tariffs have risen significantly, placing a heavier burden on manufacturers and ordinary Nigerians, who are already struggling with high costs of production and living expenses. He warned that the proposed increase in electricity tariff would harm the competitiveness of Nigerian businesses, worsen inflationary pressures, reduce disposable incomes, and force many manufacturers to shut down, ultimately leading to job losses and a decline in industrial output. MAN has repeatedly urged the government to prioritise stable and affordable electricity supply to support industrial growth and economic development, warning that failure to do so will further weaken the country’s economic prospects.
Beyond the manufacturing sector, inadequate Power Supply is disrupting businesses and households, many of whom rely on expensive and unreliable Alternative Energy sources to meet their daily needs. The high cost of self-generation through petrol and diesel generators is making it increasingly difficult for businesses to remain profitable, with many being forced to cut costs by reducing operations or laying off workers, while consumers face rising prices of essential goods and services due to increased production expenses. Although the government argues that tariff adjustments are necessary to improve electricity supply, many Nigerians believe they are paying more without seeing any tangible benefits, as power outages remain frequent and service delivery continues to deteriorate.
Investing in renewable sources will reduce National grid dependence.
Some experts have suggested that Nigeria must diversify its energy mix by investing in renewable sources such as solar and wind to reduce dependence on the national grid. Expanding off-grid solutions could help bridge the electricity gap, especially in underserved areas where reliance on the central power system has proven ineffective. Many rural communities and small businesses still struggle with access to stable electricity, forcing them to rely on expensive alternatives. However, achieving large-scale adoption of Renewable Energy requires clear policies that attract Investment while also addressing inefficiencies in the existing power infrastructure. Experts argue that improving transmission and distribution networks, alongside incentives for renewable projects, could provide long-term solutions to Nigeria’s electricity crisis.
Despite repeated calls for reform, Nigeria’s electricity sector remains plagued by inefficiencies that limit industrial Productivity and economic growth. Manufacturers face high operational costs due to unreliable power, making it difficult to compete locally and internationally. The inability of power generation and distribution companies to provide a stable supply has forced many businesses to rely on costly self-generation, further reducing their competitiveness. Analysts believe that without urgent intervention, including a review of privatisation efforts and stronger regulation, the sector will continue to struggle. This would make it even harder for industries to expand and for Nigeria to attract much-needed investment.
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For Nigeria to achieve meaningful progress, the government must prioritise sustainable power solutions that ensure reliable and affordable electricity for businesses and households. Strengthening regulations, attracting Private Sector investment, and promoting alternative energy sources will be crucial to solving the crisis. Policymakers must also ensure transparent pricing mechanisms and improve accountability within the power sector to guarantee that consumers receive value for the tariffs they pay. Without decisive action, the country’s electricity challenges will persist, limiting industrial expansion, raising production costs, and deepening economic hardship.