Manufacturers Struggle With N676.6bn Alternative Energy Cost, N1.72trn Raw Material Import Cost In H1 2025

The Manufacturers Association of Nigeria (MAN) has expressed concern over the high operational costs faced by manufacturers in the country, citing alternative energy costs of N676.6 billion and raw material imports of N1.72 trillion in the first half of 2025.

These costs have taken a toll on the sector, leading to 18,935 job losses in the same period.

MAN in its recently released report highlighted the challenges faced by manufacturers, including high energy costs and raw material imports, which are affecting productivity and employment in the sector.

The Association said, “though lower, alternative energy cost of N676.6 billion and raw material import of N1.72 trillion in H1 2025 remain heavy burden on operational cost and employment with 18,935 job losses recorded in the same period.”

The report stated that “in H1 2025, the sector showed modest resilience as capacity utilization rose to 61.3 per cent from 57.6 per cent in H2 2024. Manufactured exports also rose to N803.8 billion in Q2 2025 from N294.4 billion in Q1 2025.

“Also, high average lending rates of 36.6 per cent, reduction in credit access to N7.72 trillion and rising unsold inventories of N1.04 trillion continue to limit performance.”

The director-general of MAN, Mr. Segun Ajayi-Kadir stated that “over the years, global manufacturing has undergone rapid transformation driven by technological innovation, supply chain reconfiguration and shifting trade dynamics.

“However, the Nigerian manufacturing sector faces overwhelming challenges, with far reaching consequences for the nation’s economic growth, employment, industrial development and shared prosperity.”

He said that the sector’s contribution to the economy has declined significantly from 29.9 per cent in 1981 to a mere 8.2 per cent in 2024, while its real growth has witnessed a staggering decline from 14.7 per cent in 2014 to a paltry 1.2 per cent in 2024, saying that the statistics are alarming, with 767 manufacturing companies shutting down as of 2023, while about 18,000 job losses were recorded in the sector in 2024.

“The recent declining state of the sector is attributed to the hostile macroeconomic environment, extremely high-cost operating environment characterized by substantial foreign exchange losses, rising cost of raw materials, high energy prices, escalated cost of borrowing, multiple taxation, dilapidated infrastructure, high level of insecurity and excessive regulation by Government agencies,” Ajayi-Kadir added.

He explained that “the modest yet consecutive rise in the MCCI since Q2 2025 reaffirms that Nigeria’s economy is on a path of gradual recovery. The stabilisation path has been cleared; what lies ahead is the imperative of accelerated growth. To sustain this trajectory, exchange rate stability must be guarded with every available policy tool. Currency stability is more than a macroeconomic metric, it is a reflection of national resolve.”

On the fiscal front, MAN DG called for the development and implementation of the Nigeria Industrial Policy, which is long overdue, saying that “it must be aligned with the ‘Nigeria First’ policy and highly private sector -driven, ensuring coherence between policy intent and industrial realities.

“As the nation prepares for the implementation of new tax laws in January 2026, shared ownership and strict adherence to execution plans will be critical. Progressive tax reforms can only deliver their promise of higher revenue, improved living standards and a more enabling business environment when enforcement is disciplined and predictable.”