Manufacturers need 2,000MW of Electricity to Stay Afloat- MAN
By Business Day on 21/07/2009
Views: 535 | Comments: 0
The manufacturing sector of the Nigerian economy requires about 2,000 mega watts (MW) of electricity to keep the factories in the country running at installed capacity.
The sector remains the worst hit by the dwindling power supply which has led to the near total collapse of the entire industrial sector. Power generation and distribution across the nation has remained abysmally low despite the claimed investment in the sector by the Federal Government in the last couple of years. Reginald Odia, chairman, Infrastructure Committee of the Manufacturers Association of Nigeria (MAN), who disclosed this at a forum on power supply to the industrial sector, recently in Abuja, said an estimated4,000 mega watts of power would be needed in the next five years if their factories must grow.
Odia noted that power is the engine that drives industry and economic development, adding that it is therefore imperative to develop a sound power policy that would directly affect the lives of Nigerians in all sectors.
He posited that far-reaching policy actions need to be put in place urgently to enable the country generate adequate electricity. He further observed that the Nigerian economy can only grow if there is a cost effective and reliable power supply.The chairman lamented that power which is usually 5 percent to 10 percent of production cost in most countries, constitutes between 30 percent and 40 percent of the cost of production in Nigeria presently.
According to him, “When other costs of infrastructural deficiencies are added cost of production in Nigeria goes well beyond reach. It is nine times that of China and four times that of Europe. When compared with South Africa and Ghana, production cost is four times and two times respectively of these two African countries.”
He further disclosed that an audit survey recently conducted by MAN on 1,500 manufacturing companies nationwide revealed that members of the association currently spend an average of N954 million for the maintenance of their plants, while an average of 8,679,638 litres of diesel are consumed weekly in running these plants.He noted that the much needed capital for maintaining and increasing production at factories and production lines are locked up in purchasing generators which, according to him, are totally unproductive assets.
Lending credence to this, the minister of commerce and industry, Achike Udenwa, affirmed that the fortunes of the manufacturing sector have suffered serious reverses on account of operational and environmental hiccups.This, he added, has taken its toll on the overall Nigerian economy, resulting in the shutting down of industries and high level of unemployment with their associated problems for both internal and external security.
He further noted that the development also compounds the de-industrialisation trend and acts as a disincentive to further investments in the economy, warning that such a ruinous slide must be checked if the country is to take a pride of place within the comity of nations. “The Federal Government has promised to increase power generation to 6,000 mega watts by December, this year. When achieved, power needs of the country would have been largely improved. Even before that target is reached there is the urgent need to address the power needs of the manufacturing sector to ensure that they remain in business”, Udenwa stressed.
Source Business Day
Posted by afamcart on 29/12/2009 09:36:25 AM