Electricity: Manufacturers Adopt Survival Means


Manufacturers under the auspices of the Manufacturers Association of Nigeria (MAN) have taken their destinies into their hands by providing electricity for their operations. Electricity supply dearth is a common knowledge as the national supply has been adjudged the second poorest in the world second only to Yemen, a war-torn country, by Spectatorindex twitter handle.

In an interview with The Nation, MAN President, Dr. Frank Udemba Jacobs,  lamented that for over three decades manufacturers have consistently argued on the need to give the sector special consideration in energy supply without a commensurate response from the government.

He regretted that after advocating improvement in electricity supply to industries for over three decades without respite, his association had no choice but take their destinies in their hands.

He reiterated MAN’s effort at complementing the government attempt at resolving the huge challenge. He said: “Nigeria has a huge population of over 180 million people based on World Bank figure; huge and thriving manufacturing and other businesses, but delivers about 4000 megawatts (MW) of electricity per day.

“By the rule of thumb, the quantum of electricity generated in the economy should be at least, 180,000MW per day; that is an average of one megawatt per 1000 persons. Moreover, the World Bank report also indicates that Nigeria’s electricity per capita was 142 kilowatts as at 2013, which is well below the world per capita energy of 3,104.382 kilowatts in the same year. Apart from the dearth of electricity supply to the industries, the quality and constant arbitrary increase in the tariff are also major challenges.”

Jacobs lamented that electricity supply challenges have become hydra-headed to his association and operations.

On the way forward, he said his association has resorted to self-generated energy, notwithstanding the huge cost associated with such endeavour. He revealed that in 2016 alone, manufacturers expended over N129.0 billion on alternative energy source, noting that the electricity challenge has been one of the major factors responsible for the poor competitiveness of Nigerian manufactured products as it accounts for over 36 percent of total cost of production in the sector.

He, however, commended the Federal Government’s progressive effort at improving electricity supply in the country beginning with the privatisation of the power sector. The government, he said, has also shown commitment to helping the companies in the electricity production chain and solve their huge challenges.

He lauded the Central Bank of Nigeria’s (CBN) N213 billion Nigerian Electricity Market Stabilisation Facility (NEMSF)  support for electricity companies in addressing their challenges. He, however, regretted that despite the support from the government, power supply remains inadequate for domestic and industrial needs.

According to him, in the light of the various challenges in the electricity sector, MAN he said, is also making significant efforts at addressing the energy challenges of its members.

On how far the association has gone in achieving sufficiency in electricity. He said: “ The Manufacturers Power Development Company Limited (MPDCL) was incorporated by MAN to drive improvement of electricity supply to members of the association, especially within the industrial clusters.

“The MPDCL within the last quarter of 2017, has signed Memoranda of Understanding (MoU) with some Independent Power Producers (IPP) and the projects are already at different implementation stages. The Association is also encouraging its members to key into energy efficient production system.”

Spectra Industries Limited Chief Executive Officer (CEO), Mr. Duro Kuteyi, also urged the Federal Government on the need to have special electricity rate for manufacturers. He criticised a situation where manufacturers are charged high electricity rates, which he said have the capacity to erode their profits and affect their bottom line.

Responding to the invitation of the Minister of Power, Works, and Housing, Mr. Babatunde Fashola’s invitation to manufacturers to take -up the available 2,000 megawatts excess electricity, he questioned the minister on the modalities and how manufacturers can access it, noting that it can only work where there are manufacturing clusters. He argued that the plan begs the question and will not address it.

He asked the minister to evolve a novel method of distributing electricity to where needed most so that manufacturers can spend less on electricity supply in their productions.

Source: The Nation

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