Energy policy must become part of Nigeria's industrial strategy if the country is to succeed in its newly launched industrialisation ambition, according to Dr. Kandeh Kolleh Yamkella, a former Director General of the United Nations Industrial Development Organisation (UNIDO). Speaking at the Manufacturers Association of Nigeria's 54th Annual General Meeting on 6 October 2026, Yamkella said that without a clearly defined energy policy to support the Nigeria Industrial Policy launched in February this year, manufacturing will struggle. "Energy policy is industrial strategy. If we do not fix that, industry will die because no industrial strategy can succeed without reliable electricity," he told the audience.
The problem is acute. Manufacturers spent an estimated N1.3 trillion on self-generated power in 2025, up from N781 billion in 2023, with energy now accounting for between 35 and 40 per cent of production costs, and reaching as high as 60 per cent for some businesses. This stands in sharp contrast to competing nations. In countries such as India, Vietnam, Indonesia, Turkey, Mexico and South Africa, energy makes up roughly between 5 and 15 per cent of manufacturing costs. Yamkella noted that Asian competitors subsidise energy and water for manufacturers, giving them a decisive advantage that Nigeria has not matched.
The former UNIDO chief emphasised that policy documents alone are insufficient. "Countries do not industrialise simply by producing policy documents," he said, arguing that industrial policy matters only when it translates into productive capacity, investment, technology, competitiveness and job creation. He pointed out that Nigeria's manufacturing sector currently contributes between 7 and 8 per cent to Gross Domestic Product, while manufacturing exports generate only 3 per cent of export revenue, figures he said fall far below those of several African peers. "Potential is not performance," he warned.
Yamkella called on government to move from policy design to deliberate execution, citing examples from Asia. He said governments in Bangladesh, Sri Lanka, Vietnam and Cambodia actively monitor factory establishment and expansion, and adjust public capital and policy if results fall short. "Their governments measure how many new factories they create," he said. For Nigeria, he suggested that rather than waiting for manufacturer complaints, government should proactively ask industry how it can help members grow, as India does.
Looking beyond domestic markets, Yamkella identified specific opportunities for Nigeria to become a global manufacturing hub. He highlighted potential in cement, fertiliser and electric car batteries. For fertiliser, he noted that Nigeria produces urea, Togo has phosphate and Congo has potash, positioning Nigeria to become a top-five global fertiliser producer within five years with cross-border supply chains. On electric vehicles, he said Nigeria has significant opportunities in battery manufacturing, swapping systems and components, particularly given its solid minerals policy on lithium processing. "Nigeria's industrial future cannot be defined by domestic market alone," he said.
Yamkella welcomed Nigeria's return to industrial policy after decades of deindustrialisation, reversing the market liberalisation approach that dominated previous decades. He stressed that turning Nigeria into Africa's industrial hub requires government to be deliberate in measuring and supporting manufacturer performance, backed by complementary policies on energy, infrastructure and regional trade partnerships.