NIGERIA LOSES N10tn TO POOR ELECTRICITY-MAN
Segun -Ajayi Nadir, Director General
Manufacturers Association of Nigeria MAN has said that Nigeria’s manufacturing sector is losing about N10 trillion or two percent share of its Gross Domestic Product( GDP) to poor supply of electricity.
He said the electricity reforms introduced by the administration of President Bola Ahmed Tinubu, would help in salvage the sector, if well implemented.
The DG said this, while accessing the impact of of the country’s electricity situations on the economy, stating that the sector would help in guaranteeing the growth and development of the economy, once the its reforms are adequately implemented.
According to him, the unfavourable situation in the power sector has placed the country among the worst countries to do business with a rank of 171 out of 190.
On the recently signed electricity Act, the MAN’s DG said that the 2023 Act will be a major game changer for the manufacturing industry as it would assist in addressing numerous constraints within the sector, if it well executed.
The Act, Ajayi-Kadir, observes has favourable implications for the manufacturing sector as it will help reduce cost of alternative energy, competitive and lower electricity tariff, improvement in inflow of Foreign Direct Investment (FDI) and manufacturing performance.
Others, he said, are improvement in investment in renewables, Internally Generated Revenue (IGR), infrastructure, reduction of tax burden on manufacturers, backward integration and energy security, and stable power supply and proper planning.
Recall that the nation’s electricity sector faced turbulence in the last few decades, due to over regulation, poor implementation of policies, unstable supply of gas to power plants, boottlenecks arising from the transmission among other problems.
“These problems have culminated into erratic electricity supply, frequent power outages and persistent collapses of national grid. For many years, the situation has stunted the growth of the economy.
‘Consequently, access to electricity has remained a hurdle for millions of Nigerians. According to the 2021 report by the International Energy Agency, Nigeria’s 86 million is the largest number of people in the world without access to electricity.’ he said.
No doubt, he said the current power supply is apparently inadequate to satisfy the energy requirements of the manufacturing sector and the entire population.
‘As the largest energy access deficit in the world, Nigeria’s shortage of electricity supply has been identified as a hindrance to the profitability of manufacturers with an annual economic loss valued at about N10.1 trillion or two per cent share of the country’s GDP,’ he said.
Ajayi-Kadir, however, stated that notwithstanding, the Electricity Act 2023, if well implemented promises to be a major game changer for the manufacturing sector through some favourable implications.
He said for instance, that it will reduce cost of alternative energy, pointed out, for instance, that last year, total amount spent by members of MAN on alternative energy surged from N77.21 billion in 2021 to N144.47 billion.
If the power Act is fully implemented by the Federal Government, it will will see to the drastic fall in the cost of alternative energy incurred by our members and we expect this to boost our profit margin,’ Ajayi-Kadir said.
Under the 2023 Electricity Act 2023, States, private companies and individuals are now legally permitted to generate, transmit and distribute electricity.
