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Manufacturers fuel generators with N42bn in 20 months

By on September 26, 2013

Industrialists, under the aegis of the Manufacturers Association of Nigeria, spent over N42bn to fuel about 5,480 units of diesel/gas-powered generators in the last 20 months.

The President, MAN, Chief Kola Jamodu, who gave this indication at the 2013 World Stage National Electricity Conference in Lagos on Tuesday, said power supply from the Power Holding Company of Nigeria had remained inadequate for smooth operations in the manufacturing sector.

As a result, he explained that over N42bn had been committed to powering the manufacturing concerns in the country between January 2012 and August 2013.

Jamodu, who was represented by the Chairman, Standing Committee on Infrastructure, MAN, Mr. Reginald Odiah, said a 2012 electricity power audit conducted by the association revealed that over N2bn was being spent to fuel generators monthly.

He said that the electricity power audit conducted on 2,500 members nationwide put the average peak power demand by manufacturers at 4,850 megawatts, and the peak power supply from PHCN at 1,018MW.

The in-house installed power generating capacity of members, he added, remained 5,150MW.

Jamodu explained that members of MAN owned and installed over 5,480 units of diesel/gas powered turbines and generating plants, adding that these were gulping over N2bn on the average in running and maintenance cost on a monthly basis.

He said, “This amount is apart from the average monthly PHCN bills paid by members, which again run into hundreds of millions of naira per month. This has resulted to low production capacity and inability to compete effectively with our foreign counterparts; inability to contribute optimally to the Gross National Product, which currently stands at about four per cent; poor return on investment; closure of factories and migration to greener fields by manufacturers as well as uncertainty on investment in Nigeria.

“It is sad to note that 40 per cent of our production cost goes into the provision of electricity as against five per cent to 10 per cent in other developed economies. As a result of this and other infrastructural deficiencies, the cost of manufacturing in Nigeria is about two times that of Ghana, four times that of South Africa and approximately nine times that of China”

Jamodu noted that the poor performance of the power sector could be attributed to its neglect by successive governments over a long period of time, with little or no investment in the sector over the period.

He added that that there had been poor planning and management of the electricity power infrastructure by utility planners and managers.

This, he said, might have been as a result of the monopoly enjoyed by the PHCN.

“There are also high transmission and distribution losses as a result of the use of old and outdated equipment due to lack of government attention in the sector,” he added.

The President/Chief Executive Officer, World Stage Limited, the organiser of the forum, Mr. Segun Adeleye, said that the privatisation of the country’s power sector had recorded major milestones since the 2012 conference as the National Council on Privatisation had ratified the sale of virtually all distribution and generating companies.

“At the second World Stage National Electricity Power Reform, while stakeholders acknowledged that the power sector reforms would bring about the much needed increase in private sector participation, power generation and distribution; they also raised concerns over funding; community issues; inadequacy of gas for firing turbines; overloaded 33KV lines; and lack of 33KV facilities at Transmission Company of Nigeria,” he said.

 

 

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