A consumer rights and power sector advocacy group, PowerUp Nigeria, has blamed the country’s persistent electricity crisis for rising inflation, escalating production costs, and worsening job losses across the manufacturing sector.
The Executive Director of PowerUp Nigeria, Adetayo Adegbemle, stated this in a release on the state of Nigeria’s power sector, arguing that inadequate and unreliable electricity supply remains one of the biggest obstacles to economic growth and industrial development in the country.
According to him, the electricity sector crisis has evolved beyond a utility challenge and has become a major impediment to Nigeria’s economic aspirations.
The electricity sector, he said, represents far more than a utilities problem; it is the backbone upon which Nigeria’s industrial renaissance must be built.
He noted that the manufacturing sector has been one of the hardest hit by the country’s electricity challenges, with more than 60 per cent of manufacturing firms reportedly abandoning the national grid due to unreliable supply and rising costs.
“The statistics paint a sobering picture of Nigeria’s manufacturing landscape. Over 60 per cent of manufacturing firms have exited the national grid, representing an unprecedented abandonment of critical infrastructure by the very enterprises that should be anchoring economic growth,” he stated.
Adegbemle said manufacturers spent N676.6bn on alternative energy sources in the first half of 2025, compared to N708.1bn in the second half of 2024, as companies struggled to cope with unreliable grid electricity.
“The paradox is stark: manufacturers are spending billions on generators while still operating below capacity and unable to reliably serve their customers,” he said.
According to him, the consequences of the power crisis extend beyond energy costs, with businesses suffering huge economic losses and consumers bearing the burden through higher prices.
“I have noted that manufacturers spend several billions of dollars annually on alternative energy sources, an expense they in turn push to consumers. This cost pass-through is inevitable, leading to higher prices for consumer goods and services, which ultimately dampens demand and slows economic growth,” he stated.
He added that the cycle had become self-reinforcing as rising production costs translate into higher consumer prices, weaker purchasing power, lower demand, and reduced industrial output.
The power advocate further disclosed that inadequate electricity supply has contributed significantly to job losses in the manufacturing sector, asserting, “The manufacturing sector recorded 18,935 job losses in the first six months of 2025, a direct consequence of firms reducing operations, relocating, or exiting the grid entirely.
“These are not merely statistics; they represent families losing income, communities losing their economic anchors, and skilled workers being forced into informal sectors or unemployment.”
Adegbemle also stated that the lack of electricity supply has hampered business growth in the manufacturing sector, leading to yearly economic losses estimated at N10.1tn,” he stated.
He argued that unreliable electricity remains a major factor undermining the competitiveness of Nigerian manufacturers, noting that power costs account for a substantial portion of production expenses.
“The manufacturing sub-sector in Nigeria spends, on average, 90 per cent of their variable cost on infrastructure, with electric power accounting for half of the amount,” he added.
Adegbemle stressed that addressing the country’s electricity challenges is critical to reversing the decline in manufacturing, boosting employment and stimulating economic growth.
He urged the Federal Government to create conditions that would encourage industries that have abandoned the national grid to reconnect, arguing that increased industrial consumption would strengthen the electricity market and ultimately reduce costs for consumers.
According to him, Nigeria cannot achieve meaningful industrialisation without a reliable and affordable electricity supply.
“The fundamental truth is that Nigeria cannot achieve the manufacturing-led economic growth necessary to lift millions out of poverty without solving its power sector crisis,” Adegbemle emphasised.
He further argued that if major industrial consumers returned to the grid and redirected spending currently devoted to generators toward grid electricity, power could be supplied at lower costs to households and businesses.
“If large-scale consumers return to the grid and large manufacturers spend their billions on the national grid instead of generators, the government could easily provide electricity at significantly reduced costs to all consumers,” he noted.
The advocacy group maintained that while recent reforms and revenue growth in the power sector were encouraging, the industry still requires stronger policy direction, improved infrastructure and greater regulatory certainty to support economic growth and industrial development.
Adegbemle said the country’s power sector challenges persist despite some improvements in generation and sector revenue.
He noted that average generation capacity increased to 4,633.79 megawatts in 2025 from 4,050.07 MW in 2020, while sector revenue rose 70 per cent from N1.05tn to about N1.7tn in 2024. However, he argued that the gains remain insufficient given the scale of the crisis.
The PowerUp Nigeria convener said Nigeria’s electricity challenges are not primarily due to a lack of resources but rather governance and policy failures.
“The challenge is not merely technical. Nigeria has the resources, both financial and natural, to generate abundant electricity. The challenge is governance, regulatory consistency, and the political will to prioritise long-term structural development over short-term political considerations,” he said.
Adegbemle further criticised the lack of clear direction in the sector, saying reforms would only succeed if backed by sustained implementation and commitment from policymakers.
“Until Nigeria’s policymakers and regulatory authorities demonstrate commitment to creating a reliable, affordable, and transparent power system, the manufacturing sector will continue to decline, economic growth will remain constrained, and millions of Nigerians will continue to bear the cost of a failed system,” he submitted.