Private electricity generation by Nigeria manufacturers gulps $684m in two years

Electricity makes up 40% of the cost of production in Nigeria
A roadside mechanic repairs electricity generators that are believed to contribute to the environmental pollution in Port Harcourt city, Rivers State, on February 14, 2017. – The Nigerian city of Port Harcourt used to be known as “The Garden City”, since late last year, black soot has been falling from the sky, scaring and angering residents who claim nothing is being done to protect their health. (Photo by PIUS UTOMI EKPEI / AFP)

Fresh data shows manufacturers in Nigeria spent a total of N246.38bn ($684.3m) generating their own electricity between 2016 and 2017.

The data also revealed that manufacturers spent a further N43bn on private power generation in the first half of 2018.

While reviewing the performance of the sector in 2018, MAN described the current power situation as unfriendly to manufacturers, pointing out that the cost of electricity constitutes 40 per cent of the cost of production in Nigeria.

Man says the challenge of inadequate electricity supply in 2018 was worsened by an increasing electricity price. It further states electricity supply remains a major driver of the cost of production.

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“Our survey finding shows a slight improvement in electricity generation and distribution with the challenges coming from obsolete electricity infrastructure, weak transmission and distribution networks.”

MAN recognized efforts made by the Nigerian government to improve power supply through the Eligible Customer initiatives aimed at utilizing stranded 2,000 megawatts of electricity

The association noted, however, that the distribution of the stranded electricity was slow, owing to the conditions established for its access such as government’s condition that customers are only eligible to access the stranded 2,000 megawatts if they are not owing any of the distribution companies.

The association has called on the government to relax some of the requirements for the uptake of the 2,000MW stranded electricity, so that manufacturers can leverage on the initiative.

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MAN also urged the government to intervene in the impasse between the association, electricity distribution companies and the Nigerian Electricity Regulatory Commission


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