Manufacturers spend N42bn on generators

By ADEWALE SANYAOLU
The Manufacturers Association of Nigeria (MAN) last week lamented the poor state of the country’s power sector, stressing that its members spent over N42 billion to generate private electricity between January 2012 to August 2013.

The figure, according to the President MAN, Mr. Kola Jamodu, came up from the electricity power audit conducted on members of MAN in 2012, where it discovered that it spends more than N2 billion monthly to fuel generators.
Jamodu spoke at the 2013 Worldstage National Electricity Conference held in Lagos in Lagos last week.
Represented by the Chairman, Standing Committee on Infrastructure of the association, Mr. Reginald Odiah, Jamodu said that power supply from Power Holding Company of Nigeria (PHCN), has remained inadequate for smooth operation of companies in the country.
The MAN boss explained that electricity power audit conducted on 2,500 members nationwide revealed that average peak power demand stands at 4,850mw, peak power supply from PHCN at 1,018mw and in-house installed power generating capacity of members at 5,150mw.
He disclosed that members of the association owned and installed in-house over 5,480 units of diesel/gas powered turbines and generating plants, while members spend over N2 billion as average cost of running and maintaining these in-house power plants per month.
“This amount is apart from the average monthly PHCN bills paid by members, which again run into hundreds of millions of naira per month,” he said.

The implication of this, Jamodu disclosed, reflects in high cost of production and inability to compete with manufacturers from other parts of the world.           .
“This has resulted to low production capacity and inability to compete effectively with our foreign counterparts and to contribute optimally to Gross National Product (GNP), which currently stands at about four per cent; poor return on investment; closure of factories and migration to greener fields by manufacturers as well as uncertainty on investment in Nigeria.

“It is sad to note that 40 per cent of our production cost goes into the provision of electricity as against five per cent to 10 per cent in other developed economies. As a result of this and other infrastructural deficiencies, cost of manufacturing in Nigeria is about two times that of Ghana, four times that of South Africa and approximately nine times that of China,” he said.