High energy costs remain a huge threat to real sector, says MAN

The Manufacturers Association of Nigeria (MAN) has again lamented the high cost of energy, saying that it is a major challenge to the manufacturing sector in Nigeria.

According to the President, MAN, Francis Meshioye, electricity alone accounts for over 35 per cent of manufacturers’ cost structure, adding that no business can be competitive with such costs.

This is as the African Finance Corporation (AFC) blamed interest groups such as importers and sellers of generators and diesel for the epileptic power situation in the country.

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Speaking at the fourth Adeola Odutola Lecture and Presidential Luncheon to round off the activities marking the 52nd Annual General Meeting (AGM) of MAN, Meshioye, appealed to the Federal Government to wade into the tariff rift between manufacturers and the electricity Distribution companies of Nigeria (DisCos). He lamented that high energy costs and frequent hikes in electricity tariffs were compounding the problems they face in the sector.

Delivering the lecture with the theme: “The Imperatives of an Intentional Development of the Nigerian Manufacturing Sector”, AFC President, Samaila Zubairu, declared that there are interest groups that prefer the importation and sales of generators and diesel rather than allowing adequate supply of electricity in Nigeria.

Zubairu, who was represented by the Chief Investment Officer, AFC, Sameh Shenouda, also called for the total restructuring and reform of the country’s power sector for it to attract the needed investments.

He said AFC will not channel finances to the power sector until proper restructuring is done in the sector by the government. He identified the power sector as one of the most challenging sectors in the country, wondering how 240 million people manage a 4000-megawatt electricity supply from the country’s national grid. He added that if there is an opportunity to build a power plant that sells directly to the private sector and does not go through the Independent Power Project’s (IPP) structure, they can invest in it.

In his goodwill message, Minister of Finance, Wale Edun, represented by a director in the Ministry of Finance, Basheer Abdulkadir, said that the Federal Government and private sector must work together to create a supportive environment to advance the country’s manufacturing sector.