Nigeria's manufacturers have called for a 30 per cent Green Investment Tax Credit to encourage investment in renewable energy and hybrid power systems, citing the mounting financial burden of rising energy costs. The Manufacturers Association of Nigeria (MAN) made the proposal in its 2025 Annual Report, with Director General Segun Ajayi-Kadir arguing that the incentive would help factories move away from expensive and unreliable grid electricity towards off-grid renewable solutions including solar and liquefied natural gas (LNG). Ajayi-Kadir said the government needs to adopt targeted fiscal and energy-sector reforms to lower operating costs, improve industrial competitiveness and ease inflationary pressures linked to expensive production.
The urgency of the request reflects the scale of the problem facing manufacturers. Their annual spending on alternative energy rose to N1.34 trillion in 2025, up 20.72 per cent from N1.11 trillion in 2024, according to MAN's report. Diesel prices during 2025 frequently ranged between N1,500 and N1,800 per litre across different parts of the country. With public electricity supply unreliable, manufacturers have been forced to absorb the higher costs of diesel and gas to keep factories operating, pushing up production expenses and adding to inflation. Beyond fuel costs, the growing reliance on generators has also increased maintenance spending from continuous operation and equipment wear and tear.
MAN also urged the government to recognise manufacturers as strategic users of gas and establish a stable and transparent gas pricing framework, prioritising domestic supply before exports. Ajayi-Kadir called on the Nigerian Electricity Regulatory Commission (NERC) to grant Eligible Customer status to industrial clusters, allowing manufacturers to purchase electricity directly from generation companies through dedicated feeders. He said this arrangement would expand access to more reliable electricity and reduce manufacturers' dependence on costly self-generation.
Ajayi-Kadir warned that the sector's heavy dependence on diesel and gas leaves manufacturers vulnerable to fuel-price volatility and local supply-chain disruptions. He maintained that a combination of fiscal incentives, predictable gas pricing and improved access to industrial electricity would help ease the burden on manufacturers and strengthen the sector's contribution to economic growth. Industry stakeholders have repeatedly identified high energy costs as a major constraint on manufacturing competitiveness, with implications for investment, output, employment and the prices of locally produced goods.