Manufacturers’ expenditure on self-generated energy jumps to 220% in 2016
A new report released after studies by the Manufacturers Association of Nigeria (MAN), on expenditures bordering on self-generated energy in the course of production throughout 2016 was N129.95bn, a more than 220 per cent rise when compared with 2015 figures of N58.82bn.
The bulk of the crisis stemmed from epileptic public power supply which has failed to encourage industrial production.
MAN report has raised fresh issues on whether it is still better to produce own power or be forced out of business while depending on public power supply.
The report indicated that the real sector spent N71.13bn more on independent power generation in 2016.
It also showed that manufacturers spent N66.99bn on independent power generation in the second half of 2016 as against N29.48bn spent in the corresponding period of 2015, showing an increase of N37.51bn.
Expenses on power by manufacturers also increased by N4.03bn when compared with N62.96bn recorded in the preceding half of the year.
Whereas the share of energy for the sector stood at 36 per cent, and the supply averaged eight hours in 24 hours a day, the rising expenditure on independent power generation and arbitrary increase in electricity tariffs were responsible for the high cost of production in the sector.
The scenario therefore made it difficult for made-in-Nigeria products to compete well with imported goods in terms of pricing.
Apart from the frustrations from power crisis, MAN averred that the acute shortage of foreign exchange, high lending rate and exclusion of some vital manufacturing raw materials from the official foreign exchange market remain key sources of disincentives during the period under review.
