About 40 percent of premium bread-makers in Nigeria have shut their factories in the past three years, the Premium Breadmakers Association of Nigeria (PBAN) said. The association attributed the widespread closures to rising energy costs, poor access to affordable financing and inadequate government support. PBAN President Engr. Emmanuel Onuorah said the challenges were threatening the survival of businesses and jobs in the sector. He described the past years as "very tough", saying "Our businesses are struggling, businesses are going down, and members are closing."
Energy costs are the primary driver of the crisis, according to Onuorah. "Energy is killing businesses," he said, adding that the association was exploring alternatives including a hybrid system that would allow bakeries to switch between diesel and Compressed Natural Gas (CNG). However, the cost of transitioning a small bakery to the hybrid system ranges between N40 million and N50 million, which Onuorah described as a major obstacle. PBAN had also explored solar energy solutions but abandoned the initiative after discovering that the proposed financing arrangements would cost more than what members currently paid for electricity.
Access to credit at reasonable rates remains a critical problem. Onuorah said the financial system had failed to provide affordable credit to real sector businesses, with government-backed intervention loans largely inaccessible to genuine operators. He cited his own experience seeking financing, saying that when he applied for a loan of N12 million to convert lighting and air-conditioning systems at his facility to solar-powered alternatives, the bank demanded a 34 percent interest rate and a 20 percent counterpart funding requirement. "How do you expect small businesses to survive with interest rates of 34 per cent?" he asked. "We are not asking for free money. We are asking for single-digit interest rates that businesses can realistically repay."
Onuorah also questioned the effectiveness of government intervention programmes for small businesses, alleging that politically connected individuals benefited more than genuine entrepreneurs. He called on the Federal Government to provide grants and affordable financing to support energy transition in the bakery industry, arguing that sustainable energy remained critical to business survival, employment generation and economic growth. The association adopted the theme "Baking Through the Economic Storm: Innovation, Efficiency and Growth for a Sustainable Industry" at its 2026 Day-Out event in Lagos, reflecting both the difficult operating environment and the need for innovation to sustain the industry.