Some Nigerian factories now spend nearly half of their operating budgets on energy, according to the president of the Manufacturers Association of Nigeria (MAN), Dr Ifeanyi Okoye. He said the cost weakens competitiveness and pushes up the prices of locally manufactured products.

Okoye delivered the warning at the second edition of the Manufacturers Energy Security and Energy Efficiency Summit in Lagos, where industry representatives and government officials discussed the country's energy challenges. The summit heard that unreliable grid supply, rising tariffs and inadequate transmission infrastructure are steadily eroding industrial competitiveness.

The arithmetic behind the burden is stark. Ada Chukwudozie, MAN's South-East Chairman, estimated that diesel-powered generation costs manufacturers more than ₦560 per kilowatt-hour in fuel alone, based on diesel prices above ₦2,000 per litre and the consumption rate of a typical industrial generator (a machine that burns diesel to produce electricity on-site). That figure considerably exceeds the tariffs some grid-connected industrial consumers pay — yet those consumers still cannot rely on the grid to actually deliver.

What does this change for manufacturers?

In practice, factories pay twice: once for grid electricity from distribution companies and again for the diesel, generators and alternative systems needed when that supply fails. Stakeholders at the summit said manufacturers frequently must choose between purchasing energy, acquiring raw materials, maintaining equipment and paying workers.

The constraint compounds across the sector. Money committed to electricity generation is money unavailable for expanding production, introducing new technologies, improving working conditions and creating jobs. MAN warns the trade-off threatens industrial growth, though the association has not published a sector-wide figure for total diverted spending.

What is the government proposing?

Minister of Power Joseph Tegbe identified four priorities at the summit: grid standardisation, improved financial sustainability, asset optimisation and infrastructure expansion. He said the government is adopting a corridor-based approach to supply major economic and industrial centres.

The sequencing is explicit:

• Lagos, which accounts for approximately 50 per cent of Nigeria's electricity demand, is the first priority corridor.
• The Niger Delta region follows.
• Abuja comes third.

Tegbe also disclosed proposed East and West Super Grids — large high-capacity transmission lines — intended to raise transmission capacity from roughly 5,000MW to 19,000MW within two years. That timeline is ambitious for a sector where such projects have historically run long; the minister did not detail financing or construction schedules.

What is industry doing for itself?

MAN is pursuing two parallel tracks. With the Federal Ministry of Power, it is developing what it calls more sustainable energy solutions, including renewable energy, battery storage and captive power generation (electricity produced by a factory for its own use rather than bought from the grid).

Separately, the association runs its Industrial Energy Cost Reduction Adoption Programme. One proposed project is a 1.5MW solar installation at Judy Polymer, projected to deliver energy cost savings of more than 50 per cent. MAN frames the installation as a demonstration of how renewable energy financing and improved energy management can cut dependence on expensive conventional power.

A 50 per cent saving at one plant, however, is not a sector-wide solution. The source does not say how many manufacturers can access comparable financing, nor what capital cost the Judy Polymer project carries — the figures that would determine whether the model scales.

For now, the squeeze continues. Nigeria's electricity problems span both generation and transmission infrastructure, and until capacity expands, manufacturers will keep allocating budgets to power they should be buying from the grid. What the two-year super grid timeline actually delivers will decide whether that burden eases or endures.