Power and Naira fluctuation menace and the manufacturing sector of the Nigerian economy (3)

Whatever policy designed for rejuvenating the manufacturing sector, may never see the light of the day, unless the issue of power supply is properly addressed. Again, manufacturing companies may continue to see their efforts get eroded due to high cost of powering manufacturing plants. Nigerians have witnessed many of its past governments; make so many promises on creating a stable and sufficient power supply. Tax payers money had been sunk in various mega power generation projects, yet same tax payers have continued to spend excessively on alternative power supply that will only continually burn away their hard earned money by way of diesel or gasoline, and pollute the atmosphere.

However, what seems to be hope for the manufacturing sector is the stepping in of state governments into this urgent matter. The Lagos state government earlier went into an agreement, whereby, the state generates and contributes power to the national grid; other states are in the news for having plans for similar arrangement in near future. In turn, the Power Holding Company of Nigeria Plc will have to reciprocate by commensurately increasing the quantity of power supplied to the individual states through PHCN’s distribution system. It is indeed an urgent and welcomed measure considering the disadvantaged position of the Nigerian manufacturing sector, with regards to their huge expenditure in generating their own power. This same cost would at the end of the day be transferred to the individual companies share holders, making the manufacturing industry, quoted companies less attractive. The ugly power situation, has in recent times seen many Nigerian mega manufacturing companies produce and own brand products from their various plants located outside the country and import same from neighboring west African countries where they are sure of cutting cost on power; well that is due to the ‘absolute advantage’ of these other countries due to power, over Nigeria.