- Generator: Nigeria’s Manufacturers Spend N246bn on Fuel
Lack of stable power supply continued to erode profitability in the manufacturing sector as most producers had to generate their own electricity.
The data compiled by the Manufacturing Association of Nigeria (MAN) revealed that Nigeria’s manufacturers spent a total of N246.38 billion on private power generation between 2016 and 2017.
Manufacturers spent N129 billion and N117.38 billion in 2016 and 2017, respectively.
The data further showed manufacturers spent another N43 billion generating power in the first half of 2018.
MAN noted that the cost of generating electricity constituted 40 per cent of the total cost of production in 2018. This, the association attributed to weak infrastructure and transmission facilities.
“Our survey finding shows a slight improvement in electricity generation and distribution with the challenges coming from obsolete electricity infrastructure, weak transmission and distribution networks,” MAN stated.
The nation as at this moment is not manufacturing friendly.
“The challenge of inadequate electricity supply persisted in 2018, worsened by skyrocketing electricity price. Inadequate electricity supply remains a major driver of the cost of production.
MAN, however, commended Federal Government efforts at utilising stranded 2,000 megawatts of electricity through the Eligible Customer initiatives introduced in 2018. But pleaded that access requirement should be adjusted for a better implementation process.
The Central Bank of Nigeria had blamed the rise in consumer prices on the surge in import cost and drop in forex liquidity but with this new revelation, challenging business environment amid high foreign exchange rate constitute to the rising inflation rate.
Cost of generating electricity constitute 40 per cent of production cost.
Nigeria’s inflation rose to 11.44 percent in December, making the second consecutive month of increase.
The manufacturing sector expanded for the 22nd consecutive months in January, according to the Central Bank of Nigeria. Job creation and demand rose slightly during the month, while the 14 subsectors surveyed reported growth.