…FG says industrial clusters to get boost from solar, hybrid power expansion
…backs local solar panel production, IPPs for manufacturing hubs
Nigeria’s new National Industrial Policy 2025 has placed energy reform at the heart of its strategy to revitalise the manufacturing sector, with a strong emphasis on renewable energy adoption, state-level electricity autonomy, and private sector-led power solutions to drive productivity and competitiveness.
Unveiled recently in Abuja by the Federal Ministry of Industry, Trade and Investment, the policy document outlines a comprehensive framework aimed at moving the country from policy to productivity by addressing structural bottlenecks that have constrained industrial growth for decades, top among them unreliable electricity supply.
The policy comes at a time when Nigeria’s manufacturing sector remains under significant strain, weighed down by unreliable electricity supply, elevated production costs, limited access to finance, persistent infrastructure gaps, and a heavy dependence on imported goods.
Read also: Tuggar sets out three foreign policy priorities for Nigeria in 2026
The policy aligns closely with the provisions of the Electricity Act 2023, which empowers state governments and private investors to generate, transmit, and distribute electricity within their jurisdictions.
By decentralising the power sector, the Federal Government aims to unlock subnational energy markets, attract investment into captive and embedded generation, and reduce overreliance on the national grid.
A central pillar of the policy is the promotion of renewable energy as a sustainable alternative for industrial clusters. Government plans include incentivising local production of renewable energy hardware such as solar panels, scaling up hybrid and solar PV systems within industrial estates, and supporting independent power projects (IPPs) tailored to manufacturing hubs.
The policy sets a target for at least 25 percent of Nigeria’s energy mix to come from renewable sources by 2030. It also proposes lease-to-own models and long-term power purchase agreements to allow industries to install renewable systems with minimal upfront costs.
In addition, the government pledged to implement the Siemens-backed Presidential Power Initiative to upgrade transmission and distribution infrastructure nationwide, while coordinating regulatory agencies and financial institutions to ease investment bottlenecks in the energy space.
“Power supply remains a major constraint to industrial development despite the unbundling of the power sector into generation, transmission, and distribution companies.
“Providing alternative renewable energy and sustainable grid power to the sector will increase productivity, reduce energy intensity, and thereby improve competitiveness in the international market. This will be backed by the nationwide enforcement of the Electricity Act 2023 to facilitate private sector energy-solution models, such as:
“Establishment of Independent Power Projects within industrial estates or clusters.
“Installation of renewable energy systems (solar PV, hybrid systems) at no upfront cost to users, with recovery of investment through long-term energy service contracts (lease-to-own, power purchase agreements).
“Scalable franchising of private mini grids in underserved or rural areas,” the report noted.
The industrial sector remains a critical part of Nigeria’s economy. In 2024, the oil sector contributed about 5.5 percent of GDP, even as petroleum products accounted for roughly 88 percent of export value. Manufacturing, by contrast, contributed around 8.9 per cent of GDP and, based on older NBS manufacturing statistics, accounts for about 12 percent of formal-sector employment
However, high production costs, unstable electricity supply, limited access to credit and foreign exchange, weak infrastructure, and an influx of imported goods have limited the sector’s competitiveness.
Consumer preference for imported products, estimated at N26.8 trillion in 2024, has further pressured domestic producers.
The new policy also seeks to reverse this trend by strengthening national quality infrastructure, supporting Special Economic Zones, improving access to finance, and leveraging Nigeria’s participation in the African Continental Free Trade Area and the ECOWAS Trade Liberalisation Scheme.
Read also: What is E-invoicing? What businesses must know about the new policy
According to the ministry, with abundant natural resources, a growing domestic market, and expanding trade opportunities, sustained energy security could significantly raise manufacturing’s contribution to GDP beyond its current single-digit level and position Nigeria as a competitive industrial hub in Africa.
Speaking at the launch of the policy, Aliko Dangote, President of Dangote Industries Limited, underscored the urgency of resolving Nigeria’s electricity crisis, warning that industrialisation would remain elusive without a stable power supply.
He called for a national retreat to harmonise reforms and tackle systemic power challenges, stressing that electricity remains the backbone of job creation and economic expansion.
“One of the things that I want to advise Your Excellency, Vice President, is to call a national forum where we will have a one- or two-day retreat and resolve the issues of power. Because without power, Mr Vice President, there is no way in any country you can create growth or create jobs. So, power means growth. No power, no growth. So, we must make sure that we tackle this issue,” he said.
