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Business News of Friday, 11 September 2020

Source: Economic Confidential

Manufacturers spend N67.38bn on electricity self-generation

The President, Manufacturers Association of Nigeria, Mansur Ahmed, has said that the COVID-19 pandemic which created unprecedented challenges in global economies led to a near shut down of eight sub-sectors of the country’s manufacturing sector.

He also said that the manufacturers spent N67.38bn on self-generated electricity in the 2019 financial period.

Ahmed spoke during the association’s 48th Annual General Meeting in Lagos on Thursday.

“For Nigeria, the outcomes include lockdown, near shut down of the operations of eight manufacturing sectoral groups, disruption in supply chain, inventory and inventory of unsold items and loss of jobs,” he said.

He added, “The manufacturing sector spent over N67.38bn on self-generated electricity with energy cost accounting for over 38 per cent of production cost in 2019.”

To cushion the effect of the pandemic, he said the government introduced a number of impressive initiatives in form of economic policies, schemes and projects aimed at encouraging businesses and consolidating prior achievements.

While expressing concerns about the manufacturing sector, he said data obtained from manufacturers revealed that some of the initiatives though held long-term benefits, but necessitated tougher business decisions to mitigate the short-term impact on the manufacturing sector performance.

He said, “These divergent scenarios underscored the policy short-term volatility and the persistence of familiar manufacturing challenges.

“Interestingly, downward movement of key economic indicators reinforced the need for more proactive initiatives as against reactive initiatives.

“For instance, while the aggregated economy recorded a positive growth as indicated by increase in real national output to 2.39 per cent in 2019 from 0.81 per cent in 2018, manufacturing sector growth plunged significantly to 0.77 per cent in 2019 from 2.09 per cent recorded in 2018 (National Bureau of Statistics).

“The dwindling manufacturing performance was substantiated by capacity utilisation in the sector which slowed to 56.8 per cent in 2019 from 57.8 per cent achieved in 2018.”

Notwithstanding, he said members of MAN rendered their support to government when it was most needed, providing palliative as a way to cushion hardship experienced by Nigerians and to contain the spread of COVID-19.

“From our record, manufacturers donated about N8bn in cash and N300m worth of palliative materials to both Federal and States Governments,” he said.

While appreciating the government’s support for the industry so far, he called for more attention on other manufacturing concerns.

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