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Businesses Recount Losses…

 Looking at his own sector, the Chairman of Toilet­ries and Cosmetics Man­ufacturers Group, Mr. Ikpong Umoh, said: “Hopes were dashed following the inability of the power generation compa­nies (Gencos) and Distribution Companies (Discos) to provide the power supply needs of the citizens two years after the pri­vatisation exercise.

He observed that the role of manufacturing in a developing country like Nigeria cannot be trivialised.

He called on President Mu­hammadu Buhari government to urgently save the manufactur­ing sector from total collapse by providing constant power supply.





In his view, Yusuf, said indus­tries in Nigeria are going through hard time.

“I think something has to done if this country is move forward. We cannot continue this way as a nation. Where on earth have you see manufacturers running gen­erators as major source of energy supply? Government should see to the plight of the manufacturers in the country before all the indus­tries relocate to Ghana as we are experiencing today,” he warned.

Chief Eric Umeofia, the Pres­ident/CEO of Erisco Foods Lim­ited, said that the high cost of running manufacturing plants on generators was one of the reasons most local industries had remained uncompetitive and profitable as going concerns.

“Imports of substandard goods, smuggling and high cost of electricity have all combined to wreak havoc on the Nigerian manufacturers,” he said.

In the aviation sector, many businesses are going through very hard times.

It is estimated that the indus­try is incurring an additional cost of about N100 million, having to power its facilities on generators. A senior airport officials who handles the operations aspects of Nigerian airports and does not want to be named said” “running the various government airports on private power generators had doubled cost of maintaining the airports and also stifled recent attempts to earn reasonable rev­enue as a business.”

Small businesses operating in various sectors of the economy have been badly hit by the latest drop in power supply nationwide and the concurrent fuel scarcity.

The gloomy electricity condi­tion is further exacerbated by poor supply of gas to power plants.

Electricity insecurity can in­fluence investment decisions, but it is neither the only nor the most significant factor considered by SMEs in their operation and in­vestment decisions.

Electricity insecurity seems to affect the growth of medium and large-scale firms’ more than small firms, and seems to influence the location of investments by SMEs.

Nigeria with high frequency of power outages have few small firms in electricity-intensive sec­tors (such as manufacturing) since only large firms are able to invest in generators to mitigate the ef­fects of outages.

Ayo Demola, a Lagos-based bean cake maker, speaking on the situation in the country, said: “Some years ago, I invested in a new machine that would help pro­duce improved variety of bean cake. I made investment in a hope that the load shedding situation would improve, and there would be less power cut.

“However, load shedding did not go down. I had planned to buy more machines, but now I am not investing more as there is no ade­quate electricity supply to my area of town.”

Eizu Uwaomma, Founder And Chief Executive Officer of Hexavial Group, a Lagos-based consultancy firm, said govern­ment should create an enabling environment by making sure that businesses have access to power that is not too expensive.

According to him, power is crit­ical to developing the economy, but said that the power situation is a major challenge to businesses in the country.

He argued that if it were re­solved, many businesses that are struggling would begin to thrive.

He also urged government to make environment friendlier for business, adding that the roads should be made user friendly, and that government should also pro­vide adequate security for busi­ness and their personnel.

However, Chimezie Chuta, Founder Of Blockchain Nigeria User Group, said: “We expect the government to provide infrastruc­ture especially electricity, roads, and railway. A situation in which business people provide their own power is not good. Most Nigerian businesses spend a huge part of their fund on power is not good.

This has adverse impact on their businesses. Government should provide the enabling environment for business to thrive. If govern­ment provides adequate power, businesses will spend the fund they invest in infrastructure, especial power, in their businesses.

This will impact positively the business environment and they will employ more and do more for the economy.

For Ferdinand Adenefe, Chief Executive Officer of Imaginar­ium, a Lagos-based production company, “Power has always been a challenge but we have tried and lived like any other Nigerians business. It is here with us but we have all sorts of generating equip­ment like diesel, solar and we have a working schedule that helps us to minimise cost.

“We are taking it as part of the business experiences though it will look like one big cost compo­nent. But we have been able to rise above it. I see it now as a big part of the business. As a businessman, what I ask is how we can overcome these challenges and not bothered about it being with us.”

Akagun, who runs a business centre and offers consultancy services, noted that electricity was now the backup rather than the power generating set being the backup. He said the cost of render­ing services had soared.

Expressing his grief at the situa­tion, he said, “Looking at the effect, the fuel is not there and we have been going to the black market.

“The cost of services has be­come outrageous and even the customers are refusing to pay such costs. We have been forced to sell services at prices lower than nor­mal. The result is that my profit margin has been reduced. If the cost has risen and the customers are not willing to pay, it means that profits have shrunk.”

Akagun said: “I use about five generating sets in my office, three utilising petrol and two us­ing diesel from 8am to 5pm every day. Like today, we have not had electricity at all. Yesterday, we had only two hours supply.”

Mr. Yusuf, the Director-Gener­al, Lagos Chamber of Commerce and Industry (LCCI), expressed concern over the outcomes of the reforms in the power sector.

He suggested an extensive audit of the privatisation processes, the capacity of the players in order to identify the existing gaps.

He called on the government not to neglect the sector because it was an indispensable determinant of economic development.

He said: “I am not sure we got the reform in the power sector right. The principle of having the private sector come into it is fine. But from what we are seeing, I think there is a lot of fine-tuning that needs to be done. Not necessarily to jettison the reform there should be a proper audit of the process, capacity of the players and identify the gaps that exist there.

“The government cannot afford to leave the power sector the way it is. It is not just a business, it is a developmental issue. If we don’t get it right with power, a lot will suffer economically and socially. The government cannot regard it as just purely business issue for the investors in the sector; govern­ment needs to step into it. They need to review the entire model of power delivery.”

The LCCI Director General op­posed the notion that every con­sumer must receive electricity supply from the national grid and gas supply from the Niger Delta to generating firms.

To diversify the sector, he suggest­ed other sources that the govern­ment and investors could explore.

He, however, said: “This idea of concentrating everything on the national grid and the gas piped from Niger Delta to Egbin and other firms should be reviewed. We need to look at diversifying the sources of power generation. We need to look at the embedded power approach where people can generate power and supply direct­ly to the grid”.

Source :

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