By Kingsley Ani
Industry leaders and policymakers have warned that unreliable and expensive energy supply is weakening West Africa’s industrial competitiveness and slowing manufacturing growth across the region.
The concerns recently dominated discussions at the West Africa Industrialisation, Manufacturing and Trade (IMT) Summit 2026, where stakeholders examined structural constraints affecting industrial development.
John Uwajumogu, Special Adviser to President Bola Ahmed Tinubu on Industry, Trade and Investment, said that manufacturers across the region face operating conditions that significantly inflate production costs.
“Factories are often compelled to generate their own electricity and build parallel infrastructure to sustain operations,” Uwajumogu said.
Ajibola Akindele, Country President of Schneider Electric West Africa, said that energy costs account for between 30 and 40 percent of operational expenses for many manufacturing firms in the region.
DECISION HIGHLIGHT
Industry stakeholders are urging governments across West Africa to address structural weaknesses in the electricity value chain, particularly transmission and distribution inefficiencies that limit reliable energy supply.
The warnings reflect growing concern that without stable energy infrastructure, industrial policy initiatives across the region may fail to translate into sustained manufacturing growth.
DECISION MEMO
The debate at the West Africa Industrialisation, Manufacturing and Trade Summit highlights a structural contradiction at the heart of West Africa’s industrial ambitions.
Across the region, governments have adopted industrial policies aimed at expanding manufacturing capacity, attracting investment and strengthening regional trade integration. Yet the energy infrastructure required to sustain industrial activity remains inadequate.
Uwajumogu said that many manufacturers operate within a fragmented energy environment where businesses must independently generate electricity and develop supporting infrastructure simply to maintain production.
According to Uwajumogu, this cost burden erodes competitiveness and reduces the economic returns on industrial investment.
Uwajumogu said also that Nigeria’s National Industrial Policy (NIP) seeks to address these constraints by building what he described as an “architecture of scale”.
The policy framework prioritises the development of industrial clusters designed to reduce production costs and improve operational efficiency.
Uwajumogu explained that the policy rests on three core pillars: demand driven industrialisation, localisation of supply chains and accountable industrial financing.
However, energy infrastructure remains the most immediate constraint.
Akindele noted that electricity costs represent one of the largest components of operational expenditure for manufacturers across the region.
For companies forced to rely simultaneously on unreliable grid power and private diesel or gas generators, the resulting energy cost premium significantly weakens profit margins.
Mohammed Mijindadi, President and Managing Director of GE Vernova for Anglo West and Francophone Africa, said that the challenge often lies not in generation capacity but in inefficiencies within the electricity value chain.
Mijindadi further said that electricity generated in several West African markets frequently fails to reach consumers due to weak transmission networks and distribution losses.
As a consequence, less than half of West Africa’s population currently has reliable access to electricity, limiting the growth potential of industrial sectors.
Chantelle Abdul, Group Managing Director of Mojec International, highlighted the scale of inefficiencies within the regional electricity system.
According to Abdul, only about one-third of transmitted electricity ultimately reaches end users, indicating significant losses across distribution networks.
Abdul proposed the adoption of Energy-as-a-Service models, which would allow industrial users to purchase reliable electricity as a managed service rather than investing directly in private power infrastructure.
Abdul also noted that electrifying approximately 300 million Africans by 2030 represents a major economic opportunity across the power sector.
The challenge, she said, lies in resolving persistent issues relating to metering, revenue recovery and electricity distribution efficiency.
The discussions underscore a broader structural reality. Industrial policy alone cannot drive economic transformation if the energy systems required to power factories remain unreliable.
DATA BOX
Energy Share of Manufacturing Operating Costs: 30–40%
Electricity Access in West Africa: Less than 50% of population
Transmission Efficiency:
Only about one-third of transmitted electricity reaches end users
Electrification Opportunity:
300 million Africans targeted for electricity access by 2030
Policy Framework: National Industrial Policy (NIP)
Key Industrial Strategy Pillars:
Demand-side industrialisation
Supply chain localisation
Accountable industrial financing
WHO WINS / WHO LOSES
Winners
Energy infrastructure developers and power technology providers may benefit from expanding demand for reliable electricity solutions.
Private power providers offering distributed energy and managed electricity services may also gain market opportunities.
Losers
Manufacturers operating in energy-deficient environments face rising production costs and declining global competitiveness.
Small and medium industrial enterprises may be particularly vulnerable to energy cost volatility.
POLICY SIGNALS
The summit discussions signal growing recognition that energy infrastructure reform is central to industrial policy success in West Africa.
Governments may increasingly prioritise electricity transmission, distribution and metering reforms as part of broader industrial strategies.
The debate also suggests growing interest in alternative power delivery models such as energy-as-a-service.
INVESTOR SIGNAL
For investors, the discussions highlight significant opportunities across the energy infrastructure value chain, including power generation, grid modernisation, distributed energy systems and industrial power solutions.
The scale of unmet electricity demand across West Africa suggests a large investment pipeline if regulatory and financing barriers can be addressed.
RISK RADAR
Three structural risks remain evident.
First is energy reliability risk, as manufacturing operations remain vulnerable to unstable electricity supply.
Second is infrastructure financing risk, given the capital intensity required to modernise regional electricity networks.
Third is industrial competitiveness risk, where high energy costs may discourage manufacturing investment.
The warnings emerging from the summit ultimately reflect a fundamental constraint confronting West Africa’s industrial ambitions, economic transformation will depend as much on reliable energy infrastructure as on industrial policy frameworks.
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