Despite Band A migration, manufacturers groan in blackouts

President, Manufacturers Association of Nigeria (MAN), Francis Meshioye, has decried manufacturers’ spend on alternative energy, saying they could no longer cope with the burden that has forced many companies into bankruptcy.

He spoke at a town hall meeting, yesterday, in Lagos, organised by the Federal Ministry of Industry, Trade and Investment (FMITI), the Minister of State for Industry, Sen John Enoh, and the Organised Private Sector of Nigeria (OPSN).

The OPSN consists of MAN, National Association of Small-Scale Industrialists (NASSI), the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the Nigerian Association of Small and Medium Enterprises (NASME) and the Nigerian Employers’ Consultative Association (NECA).

Meshioye lamented that despite forcing manufacturers and businesses onto Band A, they are paying even more for darkness and the inefficiency of the Distribution Companies (DisCos), as they spent N521 billion providing alternative energy for production in the last 18 months, despite also paying trillions of naira to the DisCos for ‘darkness’.

Breaking it down, he said N281.75 billion was spent in 2023 while a whopping N238.31 billion was expended in H1 2024 on alternative energy alone.

He said, “This excludes the billions of naira we pay to the DisCos monthly for their inefficiency and inadequate supply and from our available data, H2 is going to be even higher. The persistent increase in the cost of electricity, coupled with energy insecurity and unreliable power supply, remains one of the most critical issues facing the OPSN. Also, the fuel subsidy removal, among other factors, led to the collapse of many businesses with many more gravely endangered.”
Calling for a review of the present electricity tariff, he said a 50 or 100 per cent increase was still reasonable, not the 250 increase that wrecked businesses.

Meshioye tagged most of the taxes and levies on manufacturers as unbearable and unnecessary burden on businesses.

Director-General of MAN, Segun Ajayi-Kadir, said every manufacturer in Nigeria pay 60 to 120 different taxes and levies.

Calling for improved patronage of made-in-Nigeria goods, he said the operating environment must improve to save local businesses from collapse. “Government must pause interest rates hike and fix exchange rate permanently at N1,000/$1 to allow for planning and stability. This sector is the core enabler for the growth of any economy. Amid too many challenges, we urge the FMITI to come to our aid in addressing these problems.”

Decrying that the Central Bank of Nigeria has yet to honour the remaining $2.4 billion worth of contracts, he said this would force many companies to close down, as it would lead to a huge deficit and liabilities in their financial statement as well as discredit them from getting further credit facilities.   Director-General of NASSI, Chris Oputa, urged FMITI to develop a five-year industrial development plan for MSMEs.

Also decrying the energy situation, he said if the power problem is solved, the monies used by businesses on sourcing alternative energy and other infrastructure would be slashed by over half.

Enoh stressed that no country moved from underdeveloped to developed without revamping its industrial sector; hence, Nigeria needs to develop its industrial sector.

Promising to collaborate with the OPSN, he said, “I can’t pretend to have the solutions, but we have the opportunity for a new beginning and to take steps together and build a sustainable partnership. We need to be strategic in what we have to offer. To the OPSN, I will champion your cause. Industrial Revolution workbooks will be put in place and will be co-chaired by the MAN president and myself, in conjunction with other stakeholders, and will be ready by our next quarterly meeting in 2025 where it will be presented for implementation.

“Clarity, actions and results are our watchwords going forward,” he said.