40% of breadmakers shut down in two years – PBAN

Politics Spice Special Features Education Sex & Relationship Interview Columns Opinion Advertise with us 40% of breadmakers shut down in two years – PBAN Industry November 13, 2026 12:08 am PBAN logo.

The Premium Breadmakers Association of Nigeria disclosed that approximately 40 per cent of its members have closed their businesses over the past two years, citing high energy costs, costly borrowing and deteriorating economic conditions.

The association urged the Federal Government to introduce grants and single-digit interest loans to support businesses in the real sector, warning that high operating costs and limited access to affordable financing threaten the survival of bakeries.

The PBAN President, Engr Emmanuel Onuorah, made the disclosure on Thursday at the association’s fourth Day-Out Exhibition and Masterclass in Lagos.

Speaking on the theme, ‘Baking Through the Economic Storm: Innovation, Efficiency and Growth for a Sustainable Industry’, Onuorah said the industry has suffered significant business closures as operators struggle with rising production costs.

“Business in these past years has been very tough. It’s been terrible. Words cannot even say how we feel. Businesses are going down; my members are closing. We’ve lost close to about 40 per cent of our membership to the economic strain. The energy is killing us. Within the last two years, we’ve lost about 40 per cent of our members,” he said.

He cautioned that the closures could have far-reaching consequences for employment and economic activity, stressing the bakery industry’s vital role in Nigeria’s food supply chain.

Onuorah lamented that the financial system had failed to support businesses in the real sector adequately, particularly small and medium-sized enterprises, which need affordable capital to remain operational.

He alleged that access to intervention loans remained difficult for genuine business operators, claiming that politically exposed individuals benefited more from such facilities.

“I’m a president that is all around town. I’m a very streetwise person. I sought for this information. There’s always a brick wall. People don’t get those things. People that get it are people that are politically connected,” he said.

He further claimed that none of PBAN’s members had accessed a Bank of Industry loan, despite the association’s efforts to secure financing for its members.

“No PBAN member has gotten a BOI loan,” he said. The PBAN president said the cost of transitioning to alternative energy sources, including compressed natural gas, had also become prohibitive for bakery operators.

According to him, a small bakery would require between N40m and N50m to adopt a hybrid energy system that could operate on both diesel and CNG.

He said the association was exploring alternative energy solutions to reduce production costs but lacked the financial support required to implement them.

“Government should help us with grants to ensure we transition. Because energy is a key factor. So the government can have a seed fund, maybe a form of a loan, a grant. Then they can walk through the banks to get the loans that we need at a single-digit interest rate,” Onuorah said.

He argued that small businesses could not sustain borrowing at interest rates of 30 per cent and above, particularly when their profit margins remained under pressure.

The PBAN president cited his experience with a bank in November that offered him a loan at 34 per cent interest, alongside a 20 per cent counterpart funding requirement, to raise N12m for a solar power project.

Also speaking, the Financial Secretary of PBAN and Chairperson of the 2026 Day-Out Planning Committee, Adijat Olaniyi-Olopade, said the high cost of borrowing had made it increasingly difficult for bakeries to remain profitable.

She explained that while the average cost of funds stood at about 33 per cent, bread businesses generated profit margins below 30 per cent.

“There is no business that can succeed without funding. We all know what the cost of funds is in Nigeria. The cost of funds is an average of 33 per cent, whereas the profits you can make from sales of bread are less than 30 per cent. So, if your profit is less than 30 per cent and you are borrowing funds at 33 per cent, you are already operating at a deficit,” Olaniyi-Olopade said.

She urged the government to provide cheaper financing to help bakeries survive the difficult operating environment.

Olaniyi-Olopade also identified electricity and fuel expenses as major contributors to production costs, saying energy accounted for about 50 per cent of bakery production expenses.

She disclosed that her bakery’s monthly diesel expenditure had increased from about N9m to N19m, despite the business being unable to increase bread prices.

“Unfortunately, we’ve not been able to increase the price of bread. So, you can imagine if your cost of doing business has increased, doubled, and you can’t increase your output. So you see bakeries shutting down and selling their equipment day in, day out,” she said.

Olaniyi-Olopade added that bakery operators were exploring alternative production methods, including firewood-powered ovens and CNG, to reduce energy expenses.

Earlier, Onuorah said global supply chain disruptions, inflation, exchange rate fluctuations and rising prices of essential raw materials had compounded the challenges facing the baking industry.

He urged members to embrace innovation, improve operational efficiency and explore partnerships to reduce production costs without compromising product quality.

He also called on the government to pursue stable macroeconomic policies that reduce the cost of bread production, stressing that the industry played an important role in food security and employment generation.

The association also highlighted food safety as a major concern, insisting that its members must meet regulatory requirements, including registration with the National Agency for Food and Drug Administration and Control.

Arinze Nwafor is a journalist at Punch Newspapers with five years of experience reporting on Nigeria’s economy, industry, data, metro, and judiciary. He focuses on highlighting growth, policy, and market challenges shaping Africa’s largest economy. Arinze’s reporting reflects practical newsroom experience, editorial judgment, and a strong commitment to accurate, informative, and audience-focused journalism.

Stay informed and ahead of the curve! Follow The Punch Newspaper on WhatsApp for real-time updates, breaking news, and exclusive content. Don’t miss a headline – join now!

Stay in the know—fast. Get instant alerts, breaking headlines, and exclusive stories with the Punch News App. Download now and never miss a beat.