Manufacturers in Nigeria are sounding the alarm over high diesel costs and constant power outages, warning that many factories risk closure.

At Universal Luggage Industries in Lagos, production heavily relies on diesel generators amid an unreliable national grid supply.

Executive Director Frank Onyebu said the company now spends between $139,000 and $146,000 on electricity, despite frequent blackouts.

“Just today alone, we've had two major power outages. Our machinery has been affected, and our production costs have gone through the roof,” Onyebu told CGTN.

He added that warehouses are now filled with unsold stock, as the firm has been forced to sell below cost.

The Manufacturers Association of Nigeria (MAN) reports that power-related expenses normally account for about 40% of operating costs. That burden has worsened sharply following recent fuel price hikes.

MAN Director General Segun Ajayi-Kadir noted the association had previously calculated spending of approximately $52.6 million on alternative power sources before the latest increases.

“When that percentage of your cost escalates by about 200, 300, 400%, you have a major problem in your hands,” he said.

Industry leaders say the situation is compounding weak consumer demand and thin profit margins, leaving many firms with little choice but to absorb losses or shut down.

Onyebu called on the government for assistance.

“It’s impossible to continue running a business like this. We are still calling on the government... If not, a lot of manufacturers will go out of business.”

The Nigerian government has announced measures including duty waivers on machinery imports to support the sector. However, manufacturers say these will have limited effect without resolving the underlying electricity crisis.

CGTN Reporter William Okeyo contributed to this report.