The Manufacturers Association of Nigeria (MAN) has raised alarm over the growing number of companies shutting down operations in the South-East due to rising energy costs and worsening economic conditions.
According to the association, many manufacturers in the region are struggling to survive as electricity tariffs, diesel prices, and alternative energy expenses continue to increase, placing enormous pressure on production costs and business sustainability.
MAN warned that if urgent measures are not taken to address the situation, more factories and small-scale industries may be forced to suspend operations, leading to further job losses and reduced industrial productivity in the region.
The association disclosed that manufacturers across states in the South-East are finding it increasingly difficult to maintain production because of unstable electricity supply and the high cost of powering factories through generators and other alternatives.
Industry operators say many businesses now spend a significant portion of their operating expenses on energy alone, making manufacturing activities less profitable and less competitive.
“Energy has become one of the biggest threats to manufacturing survival in the South-East,” a MAN representative said during a recent industry briefing. “Many companies are shutting down or reducing production because they can no longer cope with the rising costs.”
The South-East region is home to several industrial clusters and small- and medium-scale manufacturing businesses involved in sectors such as plastics, textiles, food processing, pharmaceuticals, metal works, and consumer goods production.
However, business owners say worsening electricity supply and increasing fuel costs have severely disrupted operations over the past few years.
Manufacturers noted that many factories now rely almost entirely on diesel-powered generators to maintain production, especially during prolonged power outages.
Diesel prices in Nigeria have remained high following the removal of fuel subsidies and broader energy market adjustments, significantly increasing operational costs for industries nationwide.
Some companies reportedly operate generators for up to 20 hours daily to sustain production activities, resulting in soaring energy bills and reduced profit margins.
Business owners in the region say the rising costs have forced several firms to reduce staff strength, cut production capacity, or completely shut down operations.
Industry experts warn that the continued closure of manufacturing companies could have serious implications for employment, local economies, and Nigeria’s industrial growth objectives.
The manufacturing sector remains one of the country’s largest employers outside the public sector and plays a critical role in economic diversification, job creation, and domestic production.
Analysts say the South-East has historically been one of Nigeria’s most entrepreneurial and industrialized regions, making the decline in manufacturing activities particularly concerning.
“The shutdown of factories affects not just business owners but entire communities that depend on those industries for jobs and economic activity,” an economist based in Enugu said.
Manufacturers also complained about multiple taxation, inflation, foreign exchange challenges, and the high cost of raw materials, all of which they say are compounding the energy crisis facing businesses.
Some operators argued that imported raw materials have become more expensive due to naira depreciation and foreign exchange instability, further increasing production costs.
The association urged the Federal Government to implement urgent interventions aimed at reducing electricity costs, improving power supply, and supporting local industries through targeted economic policies.
MAN also called for investments in infrastructure capable of reducing dependence on expensive self-generated power.
Industry stakeholders say improving Nigeria’s electricity sector remains essential to reviving manufacturing and attracting investment into industrial production.
Experts believe stable and affordable energy supply would significantly reduce operating costs for businesses and improve competitiveness for locally manufactured products.
Several manufacturers warned that continued factory closures could worsen unemployment and contribute to rising poverty levels, especially among young people.
Workers affected by company shutdowns have reportedly struggled to find alternative employment opportunities amid broader economic difficulties facing the country.
Meanwhile, economic analysts continue to express concern over the broader impact of inflation and energy costs on Nigeria’s private sector.
The current economic environment has forced many businesses to increase prices of goods and services, contributing further to inflationary pressures affecting consumers nationwide.
Consumers have also complained about rising prices of locally manufactured products as companies attempt to offset higher production expenses.
The Federal Government has repeatedly stated that economic reforms currently being implemented are aimed at stabilizing the economy and encouraging long-term growth.
However, manufacturers insist that urgent support is needed to prevent further industrial decline and protect businesses from collapse.
As economic pressures continue to mount, stakeholders say addressing the energy crisis in Nigeria’s manufacturing sector will remain critical to preserving jobs, boosting productivity, and sustaining industrial development across the South-East and other regions of the country.
