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The shortage of power needs in the production sector has seen manufacters spend N81.9 billion on alternative energy sources in 2020.The Manufacturers Association of Nigeria (MAN) has revealed.
This development according to a News Telegraph report was made worse by the frequent increase in petroleum pump price and erratice power outages in the country.
According to a News Telegraph reports the expenditure on alternative energy sources increased by N20.53 billion from N61.31 billion recorded in 2019. MAN, in its Executive Summary Bi-Annual Review of the Economy for July to December 2020 Half- Year report signed by its Director- General, Segun Ajayi-Kadir, explained that the increase in alternative energy expenditures was also attributable to the general high inflationary pressures on the economy.
Specifically, the increase in petrol pump price exerted significant influence on prices of some of the fuel used by the sector to generate electricity, which acted as burden on the manufacturers.
However, MAN, in the survey, stated that expenditure on alternative energy in the second half of 2020 increased to N57.75 billion from N34.70 billion recorded in the corresponding half of 2019; thus, indicating N23.05 billion or 66.4 per cent increase over the period.
It also increased by N33.59 billion or over 100 per cent when compared with N24.16 billion recorded in the first half of the year.
The MAN DG explained in the report that electricity supply to manufacturers in terms of energy information generated from the sector showed consent improvement in electricity supply to the manufacturing sector.
The association said in the second half of 2020, electricity supply from the distribution companies to the sector increased to 12 hours on daily average from 10 hours per day on the average recorded since the first half of 2019.
It added that average daily power outage had constantly averaged four times per day.
The survey emphasized that it was imperative for the Federal Government to address other frontline challenges plaguing the power sector, including gas shortages, limited distribution network, limited transmission lines, outdated equipment and electricity theft as it is affecting cost of production and also brewing hyperinflation.
He said that erratic power supply along the country’s electricity value chain was costing huge revenue leakages to the economy (gross domestic product) and other key sectors of the economy.
“Energy information generated from the sector has shown consent improvement in electricity supply to the manufacturing sector.
” In the 2nd half of 2020, electricity supply from the distribution companies to the sector increased to 12 hours on daily average from 10 hours per day on the average recorded since the 1st half of 2019. Average daily power outage had constantly averaged 4 times per day.
“However, expenditure on alternative energy in the 2nd half of 2020 increased to N57.75 billion in the 2nd half of 2020 from N34.70 billion recorded in the corresponding half of 2019; thus, indicating N23.05 billion or 66.4% increase over the period.
“It also increased by N33.59 billion or over 100% when compared with N24.16 billion recorded in the 1st half of the year. Expenditure on alternative energy source in the sector stood at N81.91 billion in 2020 as against N61.38 billion recorded in 2019.
“The increase in alternative energy expenditures in the sector was attributed to the general high inflationary pressures in the economy. However, specifically, the increase in the petrol pump price exerted,” Ajayi Kadir said.
According to the report, the real sector of the economy has been the biggest sector suffering inadequate power supply most in the country’s power sector with production cost rising on a daily basis from lack of electricity supply.
Similarly, the survey showed that inventory of unsold goods increased to N303.22 billion in the second half of 2020 from N202.16 billion recorded in the corresponding half of 2019; thus, indicating N101.06 billion or 50 per cent increase over the period.
It also increased by N28.83 billion or 10.5 per cent when compared with N275.39 billion recorded in the first half of the year.
In the report from MAN it was said that inventory of unsold goods in the sector totalled N577.61 billion in 2020 as against N402.42 billion recorded in the 2019.
It added that the increase in inventory in the period was attributable to the general low consumption and renewed imports in the economy as global economies generally opened after months of lockdown.
