Rising energy costs, expensive loans and increasing production expenses are putting pressure on Nigeria’s bakery industry, with about 40 per cent of members of the Premium Breadmakers Association of Nigeria (PBAN) reportedly lost to economic challenges.
PBAN President, Emmanuel Onuorah, disclosed this at the association’s 2026 Day-Out event in Lagos on Thursday.
The event, themed Baking Through the Economic Storm: Innovation, Efficiency and Growth for a Sustainable Industry, brought attention to the growing challenges facing bakery operators.
Onuorah said rising prices of flour, sugar, fats, packaging materials and transportation had made operations increasingly difficult.
He added that declining consumer purchasing power was also affecting sales, leaving many businesses unable to increase bread prices despite higher production costs.
He disclosed that a recent attempt to secure a N12m bank loan for solar-powered equipment attracted an interest rate of 34 per cent, alongside a 20 per cent counterpart funding requirement.
According to him, such lending conditions make it difficult for small businesses to invest in alternative energy sources.
The association is exploring options such as compressed natural gas (CNG) and hybrid energy systems to reduce production expenses.
However, Onuorah estimated that a small bakery would need between N40m and N50m to transition to alternative energy, while a CNG burner alone could cost about N1m.
Also speaking, PBAN Organising Committee Chairman, Hadijat Olopade, said energy accounts for about 50 per cent of bakery production costs.
She disclosed that her bakery’s monthly diesel expenses had increased from N9m to N19m, while profit margins remained below 30 per cent.
The association called on the Federal Government and the Bank of Industry to provide grants and affordable single-digit loans to help bakery operators reduce energy expenses, sustain production and keep bread prices affordable.
