Power outage drives up goods prices by 40% – Report

The poor state of electricity and power in Nigeria adds 40 per cent to the cost of manufactured products, a new report by Nanyang Technology University’s Centre for African Studies has stated.

The 150-page report titled “Back to Growth: Priority Agenda for the Economic Revival of Nigeria” was presented by the author and Director of the Centre, Amit Jain, recently in Lagos.

According to the report, the manufacturing sector has much higher productivity than agriculture and can absorb a larger proportion of the workforce.

It said a top-line analysis of the business environment in Nigeria showed that the country lacked many of the factors required to attract investment in the manufacturing sector.

For manufacturing to be competitive, the report said economic activity should, at least to begin with, not deviate too far from the country’s comparative advantage.

The report read in part, “Lack of electricity adds 40 per cent to the cost of everything in Nigeria. That hurts manufacturing the most. Firms suffer from an acute shortage of power supplies.

“Electricity blackouts, together with transport bottlenecks, crime, and corruption, are among the key impediments to firm growth. Outages and voltage fluctuations are commonplace.

“This damages machinery and equipment. Consequently, most firms rely on self-supply of electricity through the use of generators, which increases the cost of production and erodes competitiveness.”