40% of premium bread bakers shut down in 2yrs
Challenges Prompt Closure of Bakeries in Nigeria’s Premium Sector
By Yinka Kolawole
LAGOS — The Premium Breadmakers Association of Nigeria (PBAN) reported that approximately 40 percent of premium bread producers have closed their factories over the last three years due to a challenging economic climate.
PBAN attributes this decline to rising energy costs, limited access to affordable financing, and insufficient government support. Association leaders warn these issues jeopardize both business viability and job security within the sector.
Engr. Emmanuel Onuorah, PBAN president, made this statement during the association’s 2026 Day-Out event in Lagos on Monday. He pointed out that the event’s theme, “Baking Through the Economic Storm: Innovation, Efficiency and Growth for a Sustainable Industry,” underscores the sector’s dire circumstances.
“The past years have been very tough,” Onuorah said. “Words cannot express how we feel. Our businesses are struggling, and many members are closing. In the last two years, we have lost close to 40 percent of our membership to economic pressures.”
Onuorah emphasized that escalating energy costs are particularly damaging. In response, the association is investigating alternative energy options, including a hybrid system that would allow bakeries to switch between diesel and Compressed Natural Gas (CNG). However, he noted that transitioning a small bakery to this system could cost between N40 million to N50 million, a figure that poses a significant hurdle. The lack of adequate CNG supply also complicates the transition.
Additionally, PBAN has considered solar energy solutions but ultimately rejected this option after determining that the financing would exceed current electrical costs.
Onuorah criticized the financial system for failing to provide accessible credit to businesses in the sector, claiming that government-backed intervention loans are often unreachable for legitimate operators. He recounted his difficulties in securing a N12 million loan intended for converting his facility to solar power, which came with a 34 percent interest rate and a requirement for 20 percent counterpart funding.
“How do you expect small businesses to survive with interest rates of 34 percent?” Onuorah asked. “We are not asking for free money. We are asking for single-digit interest rates that businesses can realistically repay.”
He further questioned the effectiveness of government intervention programs designed to assist small businesses, alleging that those with political connections often benefit more than genuine entrepreneurs.
Onuorah stressed the need for the Federal Government to provide grants and affordable financing options to support energy transitions within the bakery industry, asserting that sustainable energy is essential for business survival, employment generation, and broader economic growth.
