Manufacturers spend at least N378 billion on private electricity generation to power their operations as public grid power supply remains unreliable, The Nation learnt yesterday.
The Manufacturers Association of Nigeria (MAN), said the N378 billion was spent over the last three years. Its President, Dr Frank Udemba Jacobs, confirmed the development to The Nation.
Jacobs said manufacturers of consumable and non-consumable products spend N126billion yearly to generate power, lamenting that the figure amounted to N378billion when multiplied by three years.
In a telephone interview, he said the small, medium enterpries (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. He noted that gas, coal and diesel have become veritable means of providing power to the manufacturing sector. According to him, the growth of the sector has been gravely constrained by poor power supply in the country.
He said foreign-owned companies operating in the country are begining 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 cost of operation, the development has resulted in 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 boasts of 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 alternative, he lamented.
On diesel, Jacobs said the decision by the Federal Government to crash the price of diesel by 43 per cent to N160 per litre from about N300 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 N160 per litre by the government has delighted both private and non- private sector operators as the idea would help in reducing cost of operation and increase growth and productivity,” he added.
He said MAN would meet to discuss how much would be saved in view of recent reduction in the price of the product. He urged the Federal Government to fix the problems in the power sector and return it to optimal performance.
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. He said when this is acheived, the economy would grow well and jobs will be created for the youths.
Source: The Nation