Manufacturers spend N289.4bn on fuelling generators in 36 months —Report
BY OUR REPORTER
Manufacturers Association of Nigeria MAN, which makes up a larger chunk of the nation’s real sector, has said that its members spent a whopping N289.38billion in two and half years covering 2016, 2017 and first half of 2018 due to the near absence of public power supply in the country.
A report by MAN, which is the umbrella association for all major manufacturers show that its members spent N129bn in 2016 and N117.38bn in 2017, respectively on private power generation, which brings to a total of N246.38billion. The report also indicates that the manufacturers spent a N43billion on private power generation in the first half of 2018, bringing to a total of N289.38
According to review of the performance of the sector in 2018, the association expressed concerns that the cost of private generation of electricity by members constitutes 40 per cent of the total cost of production, a development, it said does not makes not manufacturing friendly and therefore inimical to the growth of this all-important sector of the economy.
The report reads in part: “The challenge of inadequate electricity supply persisted in 2018, worsened by skyrocketing electricity price. Inadequate electricity supply remains a major driver of the cost of production.
“Our survey finding shows a slight improvement in electricity generation and distribution with the challenges coming from obsolete electricity infrastructure, weak transmission and distribution networks.”
The group however commended the Federal Government for its efforts aimed at utilising stranded 2,000 megawatts of electricity through the Eligible Customer initiatives introduced last year.
The association also noted, that the uptake of the stranded electricity was slow, owing to the conditions established for its access.
The government had specified that for customers to be eligible to access the stranded 2,000 megawatts, they should not owe any of the distribution companies.
In the light of this requirement, MAN recalled that there was a legal tussle between the association and some distribution companies, over poor management of the Multi-Year Tariff Orders, which led to the claim by the DISCOs that MAN members owed them.
The manufacturers urged the government not to allow any increase in electricity tariff in the face of inadequate supply.
They also sought support for stakeholders in the electricity value chain to improve generation, transmission and distribution.
MAN called on the Federal Government to intervene in the impasse between MAN, DISCOS and the Nigerian Electricity Regulatory Commission and resolve associated issues.
The association also called on the government to relax some of the requirements for the uptake of the 2,000MW stranded electricity, so that manufacturers could leverage on the initiative.
While commenting on the performance of the non-oil sector, which fell from 12.1 per cent in 2015 to 4.6 per cent in the third quarter of 2018, MAN said the starting point to increasing non-oil export was to improve the productive capacity of the real sector.
Recall that most locally produced goods, which are usually more expensive, are not able to compete with their foreign made counterparts due to the high cost of production occasioned by non-availability of public power supply, high cost of funds as interest rate is over 22 per cent and general lack of infrastructure that inhibit smooth movement of the produced goods to their final consumers.