Manufacturers decry $29bn revenue loss to inadequate electricity supply

By Adewale Sanyaolu

The Director General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Olusola Obadimu, has decried the $29 billion annual revenue loss to businesses due to inadequate power supply.

The DG further added that the revenue loss further complicates challenges around the business operating environment.

While recent fluctuations in the naira and inflationary pressures exacerbate these issues, he urged the need for robust and stable macroeconomic policies.’

He made the disclosure at the 2024 Commerce and Industry Correspondents Association of Nigeria (CICAN) conference in Lagos with the theme, “Manufacturing: $1 Trillion GDP Target by 2030: Realities and Possibilities.”

According to Obadimu, the infrastructure deficit, which currently stands at 35 per cent of GDP, undermines efficiency and increases production costs.

The DG said it is both timely and compelling and highlights the urgent need to reposition Nigeria’s manufacturing sector as a cornerstone for economic growth and development.

He said Nigeria’s economic performance in recent years has shown both resilience and areas for improvement.

According to the National Bureau of Statistics (NBS), the country’s Gross Domestic Product (GDP) grew by 3.19 per cent in the second quarter of 2024, up from 2.51 per cent in the same period of 2023. While this growth is encouraging, it remains insufficient to achieve the ambitious $1 trillion GDP target by 2030, given our current GDP of approximately $384 billion.

Obadimu pointed out that in 2014, Nigeria’s GDP experienced a dramatic leap from $270 billion to $510 billion following a rebasing exercise which recorded an increase of 89 per cent.

“Today, with another rebasing on the horizon, we are optimistic about identifying additional growth areas. However, achieving sustainable growth requires more than statistical adjustments; it demands structural reforms, strategic investments, and unwavering commitment’’.

The DG, said he believes firmly that a thriving manufacturing sector is pivotal for Nigeria’s economic transformation.

To achieve the desired results, Obadimu, said the Association is urging Government to prioritize investments in transportation, energy, and technology to reduce production costs, develop more industrial parks and special economic zones to enhance economies of scale and attract foreign investment.

Also, he stated that NACCIMA would want the government to invest in local raw material sources to minimise reliance on imports and enhance competitiveness and equip the workforce with the skills necessary for modern manufacturing processes.

“Achieving a $1 trillion GDP by 2030 is ambitious but within reach if we align our priorities, forge public-private partnerships, and implement pragmatic policies. Events like this CICAN National Conference provide a platform to deliberate on actionable solutions and galvanize stakeholders toward our shared objectives which is aimed at advocating for policies that will continue to enhance the growth and development of the Nigerian private sector/business community’’.

In his address the CICAN Chairman, Charles Okonji,noted that the private sector, and in deed, the engine room of Nigeria’s economy is sick and the ailment has defied the medication of the federal government; leading to the exodus of many multinational companies from Nigeria to the neighbouring countries.

Okonji noted that their departure and the collapse of the existing indigenous ones brought with it a huge unemployment rate.

“Today more than 80 per cent of Nigeria’s 200 million population cannot afford one meal per day, while the crime rate rises.

As manufacturers wind down operations, their warehouses have been converted to churches at the expense of productivity,” he said.

According to him, no nation becomes great without production. Europe developed with the Industrial Revolution. It is unfortunate that subsequent governments in Nigeria have paid lip service to the growth industrial sector; preferring crude oil business, whose price is not determined or controlled by the government.

Many multi-nationals left Nigeria because of the inclement environment including high cost of production, high exchange rate, insecurity, multiple taxation/levies and poor infrastructure.