MAN tasks FG to address electricity, hike in Diesel price, others for Nigeria to benefit from AfCFTA

 

Oredola Adeola

Despite the Federal Government’s strategic objective of  doubling Nigeria’s export from tariff-free African trade to capture atleast 10percent of Africa’s imports by 2035, Manufacturers Association of Nigeria(MAN) claimed the objective is possible only if the government shows serious commitment  to addressing the country’s electricity crisis and other macro economic issues.

Mr Mansur Ahmed, President of MAN, made this known at the 11th Business Luncheon of the Apapa Branch Council of MAN on Thursday in Lagos, themed: “Improving Nigeria’s Manufacturers Competitiveness Within the Context of the African Continental Free Trade Area (AfCFTA)  implementation.”

Ahmed said that Nigeria lacks competitiveness in areas including infrastructure and electricity, which comes at a cost, citing that South African manufacturers have access to gas and electricity compared to those in Nigeria.

“Almost all manufacturers have to provide their own electricity. To provide electricity, they have to buy generators and fuel them.

“A company here will have to generate its own water and pay government for generating the water,” he lamented

Ahmed urged the FG to quickly implement  the AfCFTA and support its industrialisation drive because Nigeria is not currently competitive enough to fully maximise and harness the benefits of the AfCFTA.

He said, “There is no way any of our manufacturers can source 100 per cent of their inputs locally. There are still some things that need to be imported.”

In a related statement by Mr Segun Ajayi-kadir, Director-General, MAN, earlier in the week, MAN revealed that manufacturers in Nigeria suffer dwindling production over hike in price of diesel.

This according to him was the feedback from members which indicated that production capacity utilization was going down due to the unsustainable cost of running daily production on diesel.

Ajayi-Kadir said that the rising price of Automotive Gas Fuel (AGO) otherwise known as diesel had become very worrisome following its negative impact on businesses especially the manufacturing sector of the economy.

He noted that the latest twist was caused by the scarcity induced by the war between  Russia and Ukraine causing an increase in the price of crude oil in the international market which has now gone above $110 per barrel.

“Knowing also that diesel has been deregulated removes the question of a buffer to the cost.

“The law of demand and supply is at play here and since we have historically lacked local refining capability, we are left at the mercy of the vagaries of international price and the geopolitics of it.
The doubling of prices of energy in Nigeria in 2022, threatens the survival of the country’s manufacturing base. This is moreso complicated by the impact of higher crude prices due to the Russia/ Ukraine war.
Meanwhile, MAN claimed the increase in the price of items in the country has reached alarming heights, averaging 126.7 per cent between 2020 and 2022 due to current economic headwinds.

 

The MAN DG stated that the percentage increase arrived at from the drop in 5,340MW electricity in the Year 2020 to 2,000MW in 2022, representing 63 percent change citing Pizza that is bought at N2,800 in 2020 now averaged N3500 in 2022, indicating 25 per cent increase.

The change in the price of Diesel averaged 294.7 per cent following the increase in its price from N190 in 2020 to N750 in 2022. while the price change of Petrol which rose from N145 in 2020 to N200 in 2022 represents a 37.93 percent change. As part of the effort to address the crisis on its part.

MAN therefore noted that the Association will continue to advance discourse that would stimulate a drop in the  operating cost of production in Nigeria.

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