Inadequate electricity supply remains a huge challenge to manufacturers, accounting for their huge investment in self-energy generation, which stood at N76.7 billion in the second half of last year.
Manufacturers’ cost of self-energy generation increased from N45.04 billion in the corresponding half of 2021, indicating N31.66 billion or 70 per cent increase over the period.
According to Manufacturers Association of Nigeria (MAN) ‘Bi-annual Economic Review’ for the second half of 2022, it also increased by N8.9 billion or 13 per cent when compared with N67.8 billion recorded in the preceding half.
This document, which was made available to The Nation, presented the summary of the survey of the manufacturing sector by MAN for the second half of last year.
The survey was designed to monitor changes in manufacturing sector performance indicators viz-a-viz the behaviours of macro-economic and policy environments during the period of the survey.
The focus manufacturing indicators include capacity utilisation, production value, inventory of unsold products, level of utilisation of local raw materials, investment, expenditure on alternative energy source, etc.
MAN, in the survey, said electricity supply to the industries from the national grid declined marginally to 11 hours per day from 12 hours recorded in the preceding half.
It, however, said average number of outages per day stabilised at four times in the second half of last year as it was recorded for the first half of the year.
“Irrefutably, the trends show that power supply to the industry is still a huge challenge which accounts for huge investment of manufacturers in self-energy generation.
“Consequently, expenditure on alternative energy source increased to N76.7 billion in the second half of 2022 from N45.04 billion recorded in the corresponding half of 2021; thus, indicating N31.66 billion or 70 per cent increase over the period,” the document said.
It also stated that the huge expenditure on alternative energy was incurred on procurement of diesel, gas, generators and spare parts, inverters and UPS, etc.
MAN, however, put forward a number of recommendations to improve power supply to the sector. Its Director General, Segun Ajayi-Kadir, for instance, called for the development and implementation of a roadmap focusing on off-grid solutions and independent power projects by the private sector.
While noting that this will ensure adequate supply of energy for production and also attract and expand investment, Ajayi-Kadir also harped on the need to carry out further investment in the electricity value chain and commit to adding 10000Mw to the current electricity distributed in the country.
He also said there was the need to embrace and support significant development of energy mix and renewable since Nigeria has huge potential for solar and wind. “Promote energy efficiency and renewable energy deployment in industries and homes,” he emphasized.
The MAN DG also stressed the need to “Review the current status of the four national refineries to determine their current state and commission their resuscitation to produce fuels locally and review the gas price for domestic consumption to be in tandem with the export price which is about $3.25 per cubic meter.”
He also wants quick incentivization of more investment in gas aggregation to end gas flaring; optimization of crude oil production based on the Organisation of Petroleum Exporting Countries (OPEC) quota and gas production to ramp up revenue now that hydrocarbon is still saleable.