Expenditure by manufacturers on alternative energy sources increased 82% from N25 billion in 2014 to N144 billion in 2022 (excluding power from distribution firms).
This is based on information compiled from the Manufacturers Association of Nigeria’s annual and biannual reports.
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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.
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 with the media 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.”
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