The Minister of Power, Adebayo Adelabu, has raised concerns over the state of Nigeria’s electricity sector, revealing that more than 60 percent of the country’s manufacturing companies have disconnected from the national grid due to unreliable power supply. These firms have turned to self-generation, significantly increasing production costs and rendering Nigerian-made goods uncompetitive in global and local markets.
Adelabu made this known during the unveiling of the National Integrated Electricity Policy (NIEP) and the Integrated Resource Plan (IRP), which were presented in partnership with the United Kingdom Nigeria Infrastructure Advisory Facility (UKNIAF). He emphasized that the new policy aims to transform Nigeria’s power sector and facilitate the reintegration of off-grid manufacturers into the national supply network. He further disclosed that the policy document has been submitted to the Federal Executive Council (FEC) for approval.
The minister stressed the importance of restoring confidence in the grid supply to support industrial growth. He pointed out that many manufacturing firms, despite being located in areas with electricity access, have opted for self-generation due to the unreliability of the grid. He warned that this has not only inflated production costs but has also contributed to inflation and reduced the competitiveness of locally produced goods.
Nigeria’s persistent power challenges have forced businesses to rely on diesel- and petrol-powered generators, with fuel price hikes further exacerbating the situation. The Manufacturers Association of Nigeria (MAN) has repeatedly highlighted the impact of erratic power supply on the industry, revealing that energy expenses account for about 40 percent of manufacturers’ total production costs.
MAN estimates that the annual economic losses linked to inadequate power supply stand at N10 trillion, nearly two percent of Nigeria’s Gross Domestic Product. The association’s president, Francis Meshioye, noted that electricity tariff increases of over 250 percent in 2024 severely affected manufacturers. He lamented that the rising energy costs have become one of the most significant operational expenses in the sector, compelling businesses to seek costly alternatives that further weaken their financial stability.
With the newly launched policy, the government aims to ensure a more reliable power supply, lower production costs, and enhance the competitiveness of Nigerian goods. However, the success of this initiative remains dependent on swift implementation and tangible improvements in electricity infrastructure.
