Abdul Razaq Ibrahim, Abeokuta
The president, Manufacturers Association of Nigeria (MAN), Dr Frank Jacobs, has decried poor electricity supply to industrial areas across the country, saying acute shortage of power to industries forced many investors in the country to devise alternative energy sources.
He revealed that manufacturers spent an average of N73.12 million on monthly basis, totalling N877.4 million last year, on alternative energy sources to produce goods and run operations in various manufacturing industries, but said, Ogun state that is now being dubbed as the state with largest host of industries, expended N704.7 million out of the total expenses spent on alternative energy sources.
Speaking at 8th CEOs/MDs Business Luncheon organised by MAN, Ogun State Chapter in Otta on Thursday, the MAN President noted that total expenses incurred on alternative energy sources on yearly basis, represent 40% of the production cost, adding that the poor supply of electricity and high electricity tariff fixed being paid by manufacturers are killing the manufacturing sector of economy.
Dr Jacobs, who was represented at the event by Princess Olufunmilayo Okeowo, however declared that unless speedy and meaningful actions were taken to increase quantity and quality of energy produced and distributed by GENCOs and DISCOs vis a vis as reduction of high energy tariff paid by manufacturers, Nigerian goods competitiveness and Gross Domestic Product (GDP) would continue to dwindle.
“Ogun state branch has continued to dominate in manufacturing activities across all zones notwithstanding the harsh operating business environment.
“The branch utilised 61% of its manufacturing capacity with N306.59 billion worth of production values and an investment of N514.87 billion in 2014. Without doubt, Ogun state branch deserves commendation and that is why we refer to it today as the manufacturing hub of Nigeria.
“MAN is always on the alert regarding development in the electricity supply and tariff issues. This is so due to the decapitating high share of energy cost to total cost of manufacturing production, hovering around 40%.
“In addition, manufacturers expended the sum of N73.12 million on alternative source of energy on monthly average in 2014. In Ogun state branch, manufacturers expended N58.73 million on alternative energy source on monthly average for same period.”