Manufacturers’ Association of Nigeria has reported that manufacturers spending on alternative energy sources increased by 82% between 2014 and 2022, from N25 billion to N144 billion excluding power from distribution companies.
According to The Punch, this is based on information compiled from the Manufacturers Association of Nigeria’s annual and biannual reports.
The documents state that manufacturers spent about N783 billion over the time period to supplement the deficient power supply from power distribution firms to power their industries through self-generation.
Manufacturers spent N25 billion in 2014, N59 billion in 2015, and N129.95 billion in 2016, according to a breakdown of the data.
They spent N117.38 billion in 2017; N93.11 billion in 2018; N61.38 billion in 2019; N81.91 billion in 2020, and N71.22bn in 2021.
The president of MAN, Francis Meshioye, claimed energy prices accounted for between 35 and 40% of manufacturers’ total costs.
Meshioye claimed that because of the toll energy costs were having on corporate viability, many multinational manufacturers were already planning to leave Nigeria.
“We rejected the increase in electricity tariff because, in the first place, energy costs are very high for manufacturers, especially those who consume a lot, like steel manufacturers,” he stated. On average, 35 to 40% of their overall expenses go towards it.
“Any increase in the price of electricity is difficult for us. Consumers will have it tougher the harder it is. When this happens, the demand for goods will decrease. The profit margin will be low, as I previously predicted.
Despite numerous attempts by manufacturers to address the issue of soaring energy costs, there was a significant increase in alternative energy expenses.
