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Home Economy

Manufacturers lament energy shortage

Energy

The Matters Press by The Matters Press
March 2, 2022
Reading Time: 3 mins read
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Strike puts Nigeria in darkness

Electricity distribution station

Manufacturers and industrialists lamenting the current electricity and gas shortage currently beguiling the nation on Tuesday proffered solutions to address the situation.

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They made their views in Lagos.

The country has in the past few weeks experienced shortage of gas and energy which has taken its toll on businesses and livelihood.

However, a report by Mr Emmanuel Ojor, Head, Communication and Public Relations, Niger Delta Power Holding Company (NPDHC) attributed the development to vandalism of some gas pipelines in the country.

Ojor said that the situation had led to the shutdown of some power plants in the country and a drop in power generation.

Mr Segun Ajayi-kadir, Director-General, Manufacturers Association of Nigeria (MAN) said that inadequate electricity supply, high electricity tariff alongside cost of providing alternative energy cost manufacturers over N72.7 billion annually.

This, he said, constituted between 30 to 40 per cent of production cost thereby limiting the manufacturing competitiveness in Nigeria.

Ajayi-kadir noted that while this had been the situation over the years, the recent scarcity of Premium Motor Spirit further heightened the challenge on ground.

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He disclosed that many manufacturers had reported the unimaginable amount they have expend to purchase fuel when they eventually get to access it.

He said that the assurances given by the NNPC and marketers had turned out to be ineffectual and stressed the need for government to act swiftly to stop the prevailing scarcity before it snowballed into a bedlam.

The MAN DG urged government to give directive to the Nigerian Electricity Regulatory Commission aimed at removing bottlenecks inhibiting manufacturers access to the Eligible Customer Scheme.

“There is no doubt that the situation has been practically frustrating for our members to say the least but these are some of the situations we look into to overcome.

“As a matter of policy, significant amount of the 2000 MW stranded electricity in the system can be made available to manufacturers through this Eligible Customer Scheme.

“We equally urge for speedy intervention in ending the PMS crisis before it escalates into bigger crisis with far reaching implication on the sector,” he said.

Dr Muda Yusuf, Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), said the power supply which had become erratic in the last few weeks was a harrowing experience for businesses and households.

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This, he noted, was particularly so with the recent spike in in the cost of diesel and petrol scarcity.

Yusuf described pipeline vandalism; a major factor of the electricity shortage output as a security matter over which the government and security agencies had primary responsibilities.

He said that there was a limit to which investors could protect themselves in such matters and therefore urged the security agencies to step up and live up to their primary role of protection of lives and property.

“The communities in the gas producing also need to support the security agencies through intelligence,” he said.

Mr Saviour Iche, National President, Association of Micro Entrepreneurs of Nigeria (AMEN), stated that the shortage of gas and other energy resources was hindering the operations of many Small and Medium Enterprises (SME) in the country.

Iche posited that the expected impact of the development were high inflation indices, higher costs of production, mass retrenchment of labourers and a more stifling operating environment.

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He called on the Federal Government to permanently resolve matters leading to scarcity of electricity, gas and others by repairing existing refineries to work to at least 98 per cent capacity.

He also stressed the need to make the sector more competitive, transparent and corporate governance compliant to tackle scarcity.

“It is very unfortunate that we find ourselves in this kind of situation knowing that most multinationals and even small businesses use gas and other energy resources for their daily operations.

“Already, so many companies and industries are groaning and folding up and the few ones left are struggling to survive leaving the Nigerian manufacturing sector comatose.

“Up to 75 per cent of small industries are no longer productive to full capacity and we do not need a seer to tell you what would happen as there would be mass retrenchment of workers and it’s not good for a country with increasing crime levels.

“The attendant cost of doing business and other resultant effects of the energy shorts would trickle down to the end users or consumers that bear the brunt of the situation leading to high inflation,” he said.

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