Operators under the aegis of the Manufacturers Association of Nigeria (MAN) have bemoaned rising energy costs, which they said now account for over 40 per cent of manufacturing costs in Nigeria.

In comparison, they said other African competitors have their energy costs at between five and 10 per cent, warning that the disparity undermines the competitiveness of local industries.
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Chair of the Manufacturers Power Development Company Ltd (MPDCL), John Aluya, stated this at a press conference in Lagos yesterday, ahead of MAN’s Manufacturers Energy Security and Energy Efficiency Summit scheduled for November 3 and 4.
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He said the electricity distribution companies (Discos) must reassess their business models, adding that manufacturers should be able to access gas at the same price offered to the Discos.

“You cannot sell to Discos at a lower price and sell to producers at a higher price. This is unsustainable and we cannot survive,” he said.
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MAN’s Director-General, Segun Ajayi-Kadir, said many manufacturers on Band A, which promised 20 hours of electricity supply daily, are not receiving the expected service.
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He said the failure of the Discos to provide reliable electricity has forced manufacturers to rely on alternative power sources, adding that the government must hold the companies accountable and ensure they invest in the national grid.
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He said the principle behind the Band A categorisation is that consumers should pay for services received, but decried the fact that manufacturers are not getting adequate and reliable electricity supply.
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He said manufacturers’ expenditure on alternative power has ballooned to about N1.34 trillion, adding that unreliable electricity supply and high energy costs continue to undermine their competitiveness.
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MAN President, Dr. Ifeanyi Okoye, said while they are not totally against the band categorisation, they simply want distribution companies to provide the electricity supply promised under each category.
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‎He said skyrocketing energy costs are making it difficult for Nigerian manufacturers to compete with their counterparts in other African countries under the African Continental Free Trade Area (AfCFTA), noting that inadequate infrastructure and expensive production made locally manufactured goods less competitive.
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He also identified access to finance as a major constraint to manufacturers seeking to adopt alternative energy sources. He said converting machinery and production facilities required substantial capital, while high interest rates and short repayment periods made such investments difficult.
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The President said the summit would address industrial energy costs by bringing manufacturers, policymakers, energy companies, technology providers and financial institutions together to discuss practical solutions.
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Themed “Innovative Energy for Cost-Effective Smart Manufacturing with Structured Financing,” the two-day summit will be held at the Legend Hotel Lagos Airport, Curio Collection by Hilton, Ikeja Free Zone, Lagos.
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