Nigerian Manufacturers Spend N1.34tn on Alternative Energy

The Manufacturers Association of Nigeria (MAN) reported that manufacturers spent N1.34 trillion on alternative energy in 2025, a significant increase driven by rising operational costs following economic reforms introduced by President Bola Tinubu's administration. These reforms, including the removal of fuel subsidies and adjustments in electricity tariffs, have worsened the industrial performance, with operational costs rising sharply.

The removal of fuel subsidies in May 2023 led to a 300% increase in logistics and distribution costs within a week. Despite the increase in electricity tariffs from N68 to between N209 and N225 per kilowatt hour, power supply remains unstable due to persistent grid failures.

Consequently, manufacturers have relied heavily on diesel and petrol, leading to an increase in alternative energy expenditures from N781.68 billion in 2023 to N1.34 trillion in 2025. The operational environment has contributed to significant job losses, with 18,900 jobs affected during the review period, and a decline in manufacturing capacity utilization from 61.3% in the first half of 2025 to 57.7% in the second half.