The Manufacturers Association of Nigeria (MAN) has lamented the state of Nigeria’s power supply explaining the negative effect on manufacturers’ gross profit. According to MAN, N246 billion has been spent by manufacturers fuelling their generators alone in the last 2 years.
In a report released by MAN recently, manufacturing operators spent a whooping N129 billion in 2016 and N117.38 billion in 2017 on private power generation. Despite decline year on year, the manufacturers spent further N43 billion on private power generation in the first half of 2018.
“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.” MAN laments.
The major challenge facing Nigeria power sector was however tied to obsolete power infrastructure and weak transmission and distribution networks. This is despite “finding showing a slight improvement in electricity generation and distribution.” MAN reiterates.
The amazing fact about this is that Nigeria is the world’s largest deposits of coal, oil and gas and the oil producer in Africa. The lament of manufacturer however cannot be compared to laments in homes and small businesses.
According to an analyst who pleaded anonymity, “a minister controlling three major sectors which include works, housing and power cannot be efficient in any one. These ministries should be divided into three with different minister handling them. This would promote accountability in these sectors.”
Some analysts pin the slow growth in the economy on poor power supply which prevails in Nigeria. As output from companies is key in determining macro-economic output, poor power supply is likely to increase cost of production. Increase in cost of production reduces earnings which should be plunged back into investment to ensure company’s growth.
The repo effect of poor power supply is enormous affecting wages, increasing unemployment in the bid to cut cost, higher prices on final output without corresponding increase in wages, upward pressure on inflation rate etc. to mention but a few.
