MAN Director-General Segun Ajayi-Kadir proposed in the association’s 2025 Annual Report, recommending incentives for manufacturers adopting off-grid renewable energy and hybrid captive power solutions, including solar and liquefied natural gas (LNG).

The call follows a 20.72 per cent increase in manufacturers’ annual spending on alternative energy, from N1.11 trillion in 2024 to N1.34 trillion in 2025, as businesses struggle with unreliable public electricity supply.

Ajayi-Kadir said targeted fiscal incentives and energy-sector reforms were needed to lower operating costs, strengthen industrial competitiveness and ease inflationary pressures.

He urged the government to recognise manufacturers as strategic gas users and establish a stable, transparent pricing framework, with domestic supply prioritised over exports. He said affordable, reliable energy was essential to the survival and expansion of local industries amid rising fuel prices, equipment maintenance expenses and other operating costs.

MAN also called on the Nigerian Electricity Regulatory Commission (NERC) to prioritise Eligible Customer status for industrial clusters, allowing manufacturers to purchase electricity directly from generation companies through dedicated feeders.

“The proposed arrangement would expand access to more reliable electricity and reduce manufacturers’ dependence on costly self-generation,” he stated.

The pressure on manufacturers intensified in 2025, when diesel prices frequently ranged between N1,500 and N1,800 per litre across different parts of the country. Businesses have had to absorb higher diesel and gas costs to keep factories running, while continuous generator use has increased maintenance expenses through equipment wear and tear.

MAN warned that dependence on diesel and gas also exposes manufacturers to fuel-price volatility and local supply-chain disruptions.

“The proposed 30 per cent tax credit is therefore expected to provide an incentive for investments in cleaner and more efficient energy systems, while helping manufacturers reduce long-term operating costs,” Ajayi-Kadir added.

He said combining fiscal incentives, predictable gas pricing and improved access to industrial electricity would ease cost pressures and strengthen manufacturing’s contribution to economic growth.

Industry stakeholders have repeatedly identified high energy costs as a major constraint on manufacturing competitiveness, affecting investment, output, employment and the prices of locally produced goods.

Source: Vanguard