Nigeria Needs Stable Financial System to Boost Power Supply – MAN

The Manufacturers Association of Nigeria (MAN) has said a stable and enabling financial environment is critical to enhanced power supply in the country. It noted that so much investment would be required to help the power sector increase its capacity at the distribution level.

President, MAN, Dr. Frank Jacobs, explained that power supply is key to the manufacturing sector and sine-qua-non for the overall development of the economy.

Jacobs, who was represented by the Vice President, MAN, Lagos Zone, Reverend Issac Agoye at a business luncheon organised by the MAN Apapa branch, added that the luncheon was to learn from the technocrats on their views about what happened to the power sector, pointing out that there are many challenges facing the sector especially in an era when the country is financially crippled.

“So much investment is yet to be made in the transmission sector and in the gas to power sector. Nigeria needs a financial enabling environment to boost the power sector to increase the capacity at the distribution level. A lot of investments is required and if they are not made, we cannot expect magic to happen,” he said.

He added that the sector is on the right track, but stated that the growth is not moving fast enough due to the lack of financial capability to invest and expand the sector’s capacity.

“The road map is clear but the financial capability to invest and expand our capacity is what is lacking. We have hope because we see a road map it is just that we are crawling ‎rather than jogging,” he stressed.

He noted privatisation of the power sector should help the sector improve but there are so many challenges. The private sectors need a financial enablement, friendly environment and an effective regulatory framework. ‎We still need a very strong financial backing in order to make all these happen.”

Furthermore, he said power constitutes between 30 to 40 per cent of manufacturing cost structure, saying the advent of a new administration has ushered in an opportunity to bring in fresh ideas into the power supply equation.

“Already, we are setting up a committee comprised of representatives of NERC and MAN to work out and recommend modalities for mainstreaming the micro-grid and embedded power generation into the electric supply and the power structure. This is aimed at removing the impediments that currently hinder the infusion of these viable segments into the constellation of electricity supply sources,” he said.

Also speaking at the event, the ‎Chairman, MAN Apapa Branch, Mr. Babatunde Odunayo, said the theme of the luncheon “Power supply to the manufacturing sector under a new political dispensation-which way forward” is aimed at engaging with power technocrats in gaining an understanding of the direction in which Nigeria’s power supply delivery is headed.

He stated that inadequate infrastructure remains the biggest problem facing ‎manufacturers, maintaining that the Nigerian energy industry has clearly not been efficient in meeting the needs of consumers.

“The irregular energy service being provided and its rising high cost have weakened the manufacturing sector over the years. This weakening, amongst other factors has come from the heavy investment in use of expensive diesel as fuel, investment in own-generators, full complement of spare parts and maintenance of generators. This high cost of production of alternative source of energy has negatively affected the profitability of manufacturing operations and the competitiveness of our locally produced goods,” he said.

Deputy Managing Director, Eko Electricity Distribution Company Plc, Mr. Ramesh Narayanan, said Nigeria is showing positive signs with the power sector improving, adding that in the days ahead, many other generation companies will come on stream to boost power supply in the country.

In his words, “We need an enabling environment that will accelerate the development that is happening. The country needs a national grid plan and private investors to come in to put up independent transmission projects so that they can complement the efforts of Transmission Company of Nigeria and the discos will need a cost reflective tariff so that the energy chain can be sustained.”

“Initially, the developmental projects in the power sector will be a little bit expensive, but these are the cost of development because you need money to get the investment going, but once we hit a critical mass, the prices will come down. At this point of transition, we all have to endure a little pain,” he added.


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