The Manufacturers Association of Nigeria (MAN) shed light on the severe electricity shortage plaguing the country, which has been identified as a major obstacle to the profitability of manufacturers.
The association estimates that this shortage has resulted in an annual economic loss of around N10.1tn, equivalent to approximately two percent of the country’s Gross Domestic Product (GDP).
With Nigeria ranked at a dismal 171 out of 190 countries in terms of ease of doing business, the unfavorable electricity situation has further positioned the country among the worst places to conduct business. President Bola Tinubu’s recent approval of the Electricity Bill prompted MAN to voice their concerns regarding the impact on manufacturers.
According to MAN, the current power supply is woefully inadequate to meet the energy demands of the manufacturing sector and the general population. However, the association expressed optimism that the Electricity Act 2023, if effectively implemented, could prove to be a game changer for the manufacturing industry.
In a statement, MAN highlighted their longstanding advocacy for cost-reflective electricity tariffs to protect manufacturers from exploitation. They welcomed the Electricity Act 2023, believing that it will foster healthy price competition between states and private investors, ultimately leading to fairer pricing and a more sustainable energy sector.
The association emphasized that Nigeria’s erratic power supply has already driven some manufacturers to relocate their operations. They stressed that if the new Act adequately addresses the challenges faced by the power sector, it could potentially encourage foreign direct investment in manufacturing, bolster sector performance, and increase its contribution to the overall economy.
MAN further expressed optimism that if the substantial revenue generated from this sector is properly utilized, it could help address infrastructure deficits in many states without imposing additional tax burdens on manufacturers.
As the manufacturing sector plays a crucial role in Nigeria’s economic growth and job creation, the urgent implementation of the Electricity Act 2023 stands as a crucial step towards resolving the electricity shortage, boosting manufacturing capabilities, and improving the country’s business environment.
