NGX manufacturers spend N820.7B on energy in nine months as grid failures drive self-generation
Industrial goods companies listed on the Nigerian Exchange spent a combined N820.7 billion on fuel and power in the first nine months of 2026, up 6.3% from N771.9 billion in the same period last year. The figures come from unaudited financial statements for the period ended September 30, 2026.
Dangote Cement and BUA Cement dominate the spending at N797.1 billion combined—97% of the sector's total. Dangote's energy bill rose 2% to N580.5 billion while BUA's jumped 21.5% to N216.6 billion. Beta Glass and CAP Plc bucked the trend with declines of 5.3% and 20.4% respectively. Austin LAZ & Co saw costs explode from N50,000 to N10.9 million. HBM Nigeria reported N226.3 billion in production variable costs but didn't separate energy expenses.
Analysts warn the energy crunch is squeezing margins across manufacturing. Dr Muda Yusuf of CPPE links the surge to Middle East conflicts driving up diesel and gas prices since February 2026, compounded by Nigeria's stalled grid improvements. GTI Securities' Abiodun Ogunniyi notes higher energy costs reduce free cash flow and limit capacity expansion, though economies of scale and operational efficiency can partly offset the pressure.
The grid's unreliability forces massive self-generation. MAN reports manufacturers spent N1.34 trillion on alternative power in 2025, up 21% year-on-year. Dangote operates 345MW captive capacity, BUA 240-280MW, HBM 200MW+. Meanwhile, DisCos collected just 81% of N2.01 trillion billed in January-August 2026, weakening their ability to invest in distribution infrastructure.
With gas-fired plants supplying 70-80% of Nigeria's electricity and GenCo-gas producer disputes persisting, will manufacturers pass costs to consumers despite weak purchasing power, or absorb the hit and delay expansion plans?