Northern manufacturers are concerned that the high cost of power might lead to more shutdowns. They also decried the worsening energy supply and the high tariff, which is affecting their production.
Fearing the future of companies still managing to operate, they warned that if nothing is done about the escalating energy costs, many more companies will cease operations before the end of this year.
Chairpersons of the Manufacturers Association of Nigeria (MAN), Kaduna North-West, Ibrahim Muazu and Kaduna South-East, Kabiru Kassim, expressed distress over the power situation in the northern region. They described it as a dire situation characterised by poor quality, excessive charges and a significant threat to their livelihoods.
According to Kassim, “We were all forced onto Band A and if we are lucky, we get some hours of light daily, which they often supply during odd hours. However, it is mostly useless for production because the current is either very high or extremely low, which has destroyed a lot of our machinery.
Sadly, when we complained to the DisCo, they said there was nothing they could do and that we were often forced to repair our machines at high costs due to the bad light. Who then do we complain to?”
Adding that the manufacturers have to rely on diesel for production, which has significantly increased production costs, he said, “Unlike Lagos and most of the south-west, we don’t have gas, but we are hopeful that the gas pipeline coming to Kaduna extends to cover Kano and Sokoto.
We are suffocating under the weight of diesel costs; on a good month, my company spends 12 million Naira on diesel alone. This is in addition to the roughly 80 million Naira monthly electricity bill. The bill is better now after we protested. It was well over a hundred million monthly before.”
Muazu said all manufacturers in the North-West are also on Band A, saying they can no longer cope with the situation either.
“We are looking at approaching our DisCo, Kaduna Electricity Distribution Company (KEDC), to negotiate some form of discount so that we can match up with our production costs. We don’t have gas or CNG here, and moving these things here is quite expensive. We would appreciate having options to have an energy mix to help us reduce costs. However, our options in the north are limited. We depend on grid supply or diesel, which are quite expensive. KEDC knows we are helpless and do whatever they like,” he explained.
He said the high energy costs force up their production costs, making their goods more expensive than their counterparts from the south even with logistics costs included. “A proper energy mix is important to our survival. We are competing against foreign products and goods brought in from the South. We are begging the government to subsidise energy costs or provide cheaper alternatives.”
Also decrying excessive multiple taxation, Kassim said despite challenges confronting them, they are taxed beyond what they can bear, saying: “Each arm of government brings their taxes to be paid. As it is now, we are simply working for government agencies and the DisCo; businesses are dying. All companies are suffering, and we just have different levels of exposure,” he said.
Flaying the disconnection of Zamfara Textiles Industries in Gusau by the DisCo over allegations of energy theft, he said it is sad how companies are treated, adding that the closure reeks of high-handedness.
“They claimed the company tampered with their meter and, to date, have not been able to prove their claim. The company showed us their bills, they have been paying faithfully, and they were cut off without any notice. Despite several interventions, the company is still without power till now,” he said.
According to Muazu, while they see the way some other states try to encourage ease of doing business in their states, the situation is the opposite in northern states.
He lamented, “Business operations in the north are struggling. Last year, hundreds of businesses shut down; this year is toeing a similar line, and the people that should be concerned are not. The northern governors are not paying attention to manufacturers here and we are the largest employers of labour and provide revenue to both local and state governments.
“One would think they would be interested in protecting the goose that lays the eggs, but the only thing they are interested in instead is more taxes. They are not bothered about how we run our businesses and if care is not taken, many more businesses would be forced to close shop, leading to increased unemployment and less revenue to the government. Poor, expensive electricity and taxation are killing us rapidly, and if nothing is done, the few remaining businesses still operating will close down.”
