…energy gulps between 35 to 40%
Expenditure by manufacturers on alternative energy sources (excluding power from distribution companies) jumped by 82 per cent, from N25bn in 2014 to N144bn in 2022, findings have revealed.
This is according to data collated from the annual and bi-annual reports of the Manufacturers Association of Nigeria.
According to the documents, manufacturers spent about N783bn during the period to self-generate power to augment the insufficient power supply from power distribution companies to power their factories.
In the succeeding years, they spent N117.38bn in 2017; N93.11bn in 2018; N61.38bn in 2019; N81.91bn in 2020, and N71.22bn in 2021.
A breakdown of the data showed that manufacturers spent N25bn in 2014, N59bn in 2015 and N129.95bn in 2016.
In the succeeding years, they spent N117.38bn in 2017; N93.11bn in 2018; N61.38bn in 2019; N81.91bn in 2020, and N71.22bn in 2021.
While speaking on challenges of energy costs on members of the association, President, MAN, Francis Meshioye, said energy cost was gulping between 35 to 40 per cent of manufacturers’ total costs.
Meshioye said more multinational manufacturers were already making plans to exit Nigeria due to the toll energy cost was taking on business profitability.
He said, “We rejected the hike in electricity tariff because, in the first instance, energy cost is very high for manufacturers, particularly those who consume much, like steel manufacturers. It takes an average of 35 to 40 per cent of their total costs.
“Any increase in electricity tariff makes it harder on us. The harder it is, the harder it will be for consumers. When this is so, it means that the demand for products will drop. Like I said in my previous interview, the profit margin will be low.”
The significant increase in alternative energy costs came despite several efforts by manufacturers to address the issue of skyrocketing energy costs.
