“Manufacturers’ 40% expenditure on alternative energy”

Former Director-General, Manufacturers Association of Nigeria (MAN), Mr. Jide Mike, has disclosed that Nigeria’s manufacturers devote 30 to 40 per cent of their expenditure to alternative energy sources.

Mike stated this at a presidential dialogue session organised by the Lagos Chamber of Commerce and Industry (LCCI) recently.

According to him, “Power outages at major industrial zones range between five and six each day, which is dangerous for productive activities. Such outages destroy essential products during production, thereby raising production costs which, at the moment, is difficult to be passed onto the consumers at a time incomes are shrinking owing to economic recession”.

He gave a graphic picture of what manufacturers are passing through. “In 1999, government encouraged manufacturers to use gas. The price of gas then was affordable. In 2010, gas suppliers raised prices, but this made it difficult for us as it increased our production costs. Government then intervened and the price was only raised by 15 per cent. In 2015, the price of gas was raised astronomically,” he said.

“If government wants the productive sector to support diversification, it needs to intervene. Manufacturers are thinking of reviving the old use of the Low-Pour Fuel Oil (LPFO),” he added.

Mike said gas suppliers dollarize gas payments, which according to him, is illegal, adding that government needs to come in to encourage foreign direct investment (FDI).

“If you want to encourage FDI, you will know that any investor who comes in will look at the price of gas,” he stated.

Many organisations such as Dangote, Ashaka, Cement Company of Northern Nigeria, among others, are either building coal-fired plants or using same for production. Manufacturers prefer the use of gas as it is cheaper than diesel.