The Manufacturers Association of Nigeria (MAN) has said it is working with the Federal Ministry of Power to address high electricity tariffs, unreliable grid supply and rising energy costs affecting industrial production across the country.
The association said the collaboration would focus on developing sustainable energy solutions that would help manufacturers reduce operating costs, improve productivity and remain competitive in the Nigerian and international markets.
The initiative is expected to explore alternative energy options, including renewable energy, battery storage systems and captive power generation. It will also consider ways to improve electricity distribution and make power supply more reliable for businesses.
The development comes amid growing concerns among manufacturers over the cost and availability of electricity in Nigeria. Many businesses depend on alternative sources of power to keep their factories and production facilities running whenever electricity from the national grid is unavailable or unreliable.
These alternative sources, particularly diesel and petrol generators, often increase production expenses and make locally manufactured goods more expensive.
Energy Costs Continue to Challenge Manufacturers
Electricity remains a major requirement for industrial activities, from operating heavy machinery to processing raw materials, packaging products and maintaining production facilities.
However, manufacturers have repeatedly expressed concerns about high electricity tariffs and inconsistent supply. Businesses that experience frequent power interruptions may have to switch to generators, increasing their dependence on fuel and adding to their operating expenses.
For small and medium-sized manufacturers, these expenses can be particularly difficult to manage. Higher energy costs can reduce profit margins, affect production capacity and limit the ability of businesses to expand.
The situation also creates challenges for local manufacturers competing with imported products, especially where foreign competitors have access to more stable and affordable electricity.
MAN’s collaboration with the Federal Ministry of Power is therefore aimed at identifying practical solutions that can reduce the energy burden on industries while supporting more reliable electricity supply.
The proposed use of renewable energy and battery storage could provide manufacturers with additional sources of electricity and reduce their dependence on the national grid.
Captive power generation is another option being considered. It allows businesses to generate electricity for their own operations, helping them maintain production when public electricity supply is insufficient.
However, the success of these solutions will depend on affordability, access to financing, appropriate infrastructure and a regulatory environment that supports private investment in industrial energy.
Power Minister Warns Against Electricity Theft
Speaking at the second edition of the Manufacturers Energy Security and Energy Efficiency Summit in Lagos, the Minister of Power, Joseph Tegbe, also raised concerns about unauthorised electricity connections and unpaid electricity bills among industrial customers.
The minister disclosed that investigations had uncovered approximately 14 industrial customers operating along a particular corridor who had accumulated more than ₦400m in unpaid electricity charges over several years.
He warned that such practices weakened the financial position of electricity distribution companies and reduced the revenue available to maintain and improve power supply.
According to Tegbe, customers who consume electricity without paying for it place an unfair burden on consumers who settle their bills regularly.
“Such conduct deprives the sector of revenue that we need to sustain the supply, and unfairly burdens consumers who pay honestly,” the minister said.
His comments highlight the importance of improving payment compliance and tackling electricity theft as part of broader efforts to strengthen the power sector.
Electricity distribution companies depend on revenue collected from customers to support their operations, maintain distribution infrastructure and meet financial obligations within the electricity market.
When customers bypass meters, make illegal connections or fail to pay for electricity consumed, the resulting revenue losses can affect the ability of distribution companies to provide dependable services.
Need for Cooperation Between Manufacturers and Power Providers
The issues raised at the summit show that improving electricity supply requires cooperation between the government, manufacturers, electricity distribution companies and other stakeholders.
While manufacturers need affordable and dependable electricity to sustain production, the power sector also requires sufficient revenue to maintain infrastructure and improve service delivery.
Addressing these concerns will require a balance between protecting electricity consumers from excessive costs and ensuring that electricity providers receive payments for the services they deliver.
For manufacturers, access to alternative energy solutions could help reduce exposure to grid disruptions. However, affordable electricity tariffs and improvements in the national grid remain important to the long-term growth of the industrial sector.
The government will also need to encourage investment in renewable energy, energy storage and other power-generation options that can support businesses of different sizes.
Improved electricity distribution is equally important because power generated must be delivered efficiently to factories and other commercial users.
Outlook for Nigeria’s Manufacturing Sector
The collaboration between MAN and the Federal Ministry of Power comes at a time when Nigerian manufacturers are facing pressure from several operating expenses, including energy, transportation, raw materials and financing costs.
High electricity costs can affect production decisions, discourage new investments and make it difficult for local industries to compete effectively.
If the proposed energy solutions are implemented successfully, manufacturers could benefit from more reliable power options and better control over their energy expenses.
The initiative could also encourage wider adoption of renewable energy and energy-efficient technologies across the industrial sector.
However, its impact will depend on how quickly practical measures are introduced and whether manufacturers, particularly smaller businesses, can afford to adopt the proposed solutions.
The minister’s warning about unpaid electricity charges also reinforces the need for responsible electricity consumption and improved revenue collection.
Ultimately, Nigeria’s manufacturing sector requires an electricity system that is affordable, reliable and financially sustainable. Cooperation between the government and manufacturers, supported by improved payment compliance and investment in alternative energy, could help create better conditions for industrial growth.
