Manufacturers have expended over ₦378billion on power generation to run their operations in the last three years, the President of the Manufacturers Association of Nigeria (MAN) Dr Frank Udemba Jacobs said.
This is due largely to unreliable public grid power supply across the country.
According to MAN boss, manufacturers of consumable and non-consumable products spends ₦126billion yearly to generate power, lamenting that the figure amounted to ₦378billion when multiplied by three years.
He said the small, medium enterprises (SMEs) and multinational companies have, during the years under review, invested substantially in gas, coal and diesel to power their operations to remain in business just as he noted that gas, coal and diesel have become veritable means of providing power to the manufacturing sector.
He said foreign-owned companies operating in the country are beginning to see the sense in investing in thermal plants in order to generate electricity as against a situation where they would be relying on power from the national grid.
Jacobs said: “The dwindling power supply occasioned by poor generation is having undesirable effects on the nation’s manufacturing industry. Besides the fact that capacity utilisation in the sector has reduced as many manufacturing concerns have either downsized or right-sized in order to cut down the cost of operation, the development has resulted in the low production of goods. In order to boost operation, small, medium and bigger manufacturing companies decided to generate their own electricity using gas, coal and diesel.”
He said MAN has over 2,000 members out of which a sizeable number of manufacturers are using generators as a major means of providing power to their factories at a huge cost. Power supply from the national grid has become an alternative, he lamented.
On diesel, Jacobs said the decision by the federal government to crash the price of diesel by 43 per cent to ₦160 per litre from about ₦300 per litre, is laudable.
He said diesel is the major source of providing electricity in the sector, adding that bringing the price down by the Nigerian National Petroleum Corporation (NNPC) is heartwarming.
“The issue of reducing the price of diesel to ₦160 per litre by the government has delighted both private and non- private sector operators as the idea would help in reducing the cost of operation and increase growth and productivity,” he added.
Power, he said, drives modern economies globally, stressing that the only way to improve the contributions of both the oil and non-oil sectors of the economy to the Gross Domestic Product (GDP), is to develop the power sector.