LCCI Flags Engineering, Power Gaps Hindering Industrialisation

The Lagos Chamber of Commerce and Industry has raised concerns over persistent engineering capacity deficits and unreliable power supply, warning that these challenges continue to undermine Nigeria’s industrialisation drive and limit the competitiveness of local industries. The chamber said unless these structural issues are urgently addressed, the country risks falling short of its industrial development ambitions.

The LCCI made this position known while assessing the state of Nigeria’s manufacturing and industrial sectors, noting that engineering and power infrastructure form the backbone of industrial growth. According to the chamber, weaknesses in these critical areas have constrained productivity, increased production costs and discouraged both local and foreign investment.

The chamber explained that engineering gaps manifest in several ways, including inadequate technical skills, limited local manufacturing of industrial machinery and weak maintenance culture. These shortcomings, it said, force many industries to rely heavily on imported equipment and foreign technical expertise, significantly increasing operational costs.

LCCI noted that the shortage of skilled engineers and technicians has remained a major concern for manufacturers. While Nigeria produces a large number of engineering graduates annually, the chamber said many lack the practical skills required by industry due to gaps in training, outdated curricula and limited exposure to modern industrial technologies.

According to the chamber, the disconnect between academia and industry has worsened the problem, leaving manufacturers to spend additional resources on retraining employees or hiring expatriates for specialised roles. This situation, LCCI said, reduces the competitiveness of local firms and limits technology transfer.

Power supply was identified as an even more pressing challenge. The chamber described Nigeria’s electricity situation as one of the biggest obstacles to industrial expansion, noting that inconsistent and inadequate power supply has forced manufacturers to rely heavily on self-generated energy.

LCCI said many manufacturing firms spend a significant portion of their operating costs on diesel and petrol to power generators, eroding profit margins and making locally produced goods more expensive than imported alternatives. This, it said, has contributed to declining capacity utilisation across several manufacturing sub-sectors.

The chamber noted that frequent power outages disrupt production schedules, damage sensitive equipment and increase maintenance costs. For small and medium-scale enterprises, which lack the financial capacity to invest in alternative power solutions, the impact is even more severe.

According to LCCI, the combined effect of engineering and power gaps has weakened Nigeria’s industrial base, limiting job creation and slowing economic diversification. The chamber warned that without a strong industrial sector, efforts to reduce dependence on oil revenues and expand non-oil exports will remain difficult.

LCCI stressed that addressing these challenges requires coordinated action by government, the private sector and educational institutions. On engineering capacity, the chamber called for reforms in technical and vocational education, with greater emphasis on practical skills, industry partnerships and modern training facilities.

The chamber urged the government to promote local content development in engineering and manufacturing by supporting indigenous firms involved in machinery fabrication, equipment maintenance and industrial services. According to LCCI, targeted incentives, access to finance and supportive policies could help build a stronger local engineering ecosystem.

On power supply, LCCI said urgent reforms are needed to improve generation, transmission and distribution. It emphasised the need for sustained investment in power infrastructure, clearer regulatory frameworks and policies that encourage private sector participation.

The chamber also highlighted the potential of decentralised and embedded power solutions to support industrial clusters. It said industrial parks and manufacturing hubs should be allowed and encouraged to generate their own power under transparent and cost-reflective arrangements.

LCCI further called for improved coordination among power sector stakeholders, noting that inefficiencies in transmission and distribution often undermine gains made in power generation. According to the chamber, addressing technical and commercial losses in the power sector would significantly improve supply reliability.

Industry stakeholders have echoed the chamber’s concerns, noting that Nigeria’s manufacturing sector continues to operate below potential due to infrastructure bottlenecks. Manufacturers say the high cost of power and limited engineering support reduce their ability to compete both locally and internationally.

Analysts note that Nigeria’s industrialisation challenges are not unique but require sustained commitment to reform. Countries that have successfully industrialised, they argue, invested heavily in engineering education, skills development and reliable power infrastructure.

The LCCI also warned that failure to address these issues could worsen the trend of factory closures and relocation to neighbouring countries with more stable power supply. Such developments, it said, would result in job losses and reduced industrial output.

Despite the challenges, the chamber expressed optimism that Nigeria has the potential to industrialise given its large market, abundant natural resources and youthful population. However, it stressed that these advantages can only be fully harnessed if foundational issues are resolved.

The chamber urged policymakers to treat engineering capacity and power supply as strategic national priorities rather than sectoral issues. According to LCCI, industrialisation is critical to achieving inclusive growth, reducing unemployment and strengthening economic resilience.

It concluded that closing Nigeria’s engineering and power gaps would unlock significant industrial potential, improve productivity and attract investment. Without decisive action, however, the chamber warned that the country risks missing opportunities for sustainable industrial growth and long-term economic transformation.