Nigerian manufacturers spend N71.22bn on alternative energy in 2021 – Report
By Nneka Nwogwugwu
A new report by the Manufacturers Association of Nigeria (MAN) has disclosed that in 2021, Nigerian manufacturers spent N71.22bn on alternative energy.
This report which was published by Insidebusiness noted that manufacturers in the country saved N10.69 billion on the cost of alternative energy to power their factories in 2021, spending N71.22 billion and lower than N81.91 billion expenditure in 2020.
President of MAN, Engr. Mansur Ahmed said such expenditure threw manufacturing cost structure overboard, eroded working capital and impacted on capacity utilisation.
He added that it caused loss in production and ate into the bottom line.
Across the country, energy cost increased, affecting households and every sectors of the economy including the industrial sector that was plagued by frequent increase in the pump price of petroleum products and the unstable grid-power supply in the country.
Ahmed in MAN’s review of the economy in 2021 noted that manufacturers’ huge expenditure on alternative energy source constitutes between 30 and 40 per cent of their cost structure.
Between July and December, 2021 in the sector, expenditure on alternative energy source dipped to N45.04 billion from N57.75 billion recorded in the corresponding half of 2020. The drop indicates N12.71 billion or 22.0 per cent decline over the period.
Ahmed stated: “Data collected in the survey of this report shows that electricity supply from the national grid showed increased improvement in the second half of 2021.
“Average daily supply of electricity has been stable at 11 hours and power outage, three times per day respectively.”
On the alternative energy source implications, the industrialist said, “Since the average Nigerian’s disposable income has been depleted, we can only expect that the resulting higher prices of goods will further constrain purchases and aggravate the poverty level.
“The solution is rather complex since we are dealing with a deregulated industry. In the short term, we can only look at how to get more favourable prices from the marketers; seek to remove other costs that are in the country such as value added tax on AGO.”
He said the sector will work with the government to reduce the pressure and other pain points experienced by the manufacturers.