The Manufacturers Association of Nigeria (MAN) has spoken out against the hardship Nigerian businesses (especially Small and Medium Scale Enterprises) are going through in recent times as a result of epileptic power supply.
While speaking during the 10th edition of the Environmental Safety Seminar, the MAN’s Acting Chairman at the Apapa branch, Mr. Joe Onyebu, disclosed that the drop in power supply over the last few months, among other issues, has become a huge challenge in the market.
Effect on SME’s and local industries: Onyebu explained that SME’s are the ones that are most affected by the problem. Already, the epileptic power situation has caused quite a number of small businesses to close shop. And the effects are drastic, because not only are jobs lost, creditors such as banks and private equity investors are also subjected to share in the losses when they can’t get their money back.
Onyegbu further explained that the high cost of running manufacturing plants on generators was one of the reasons most local companies have failed to be competitive and profitable as going concerns. He added that it is estimated that Nigerian companies incur added costs running into millions of naira in the course of having to power their facilities on generators.
On Bad Roads: Onyebu went further to comment on the deplorable states of Nigerian roads. According to him, the government needs to pay more attention to areas such as the Amuwo Odofin Industrial Axis, Mile 2- Coconut Road, Mile2- Kirikiri Road, Coconut to Liverpool Road, etc.
On taxation, he stated that Lagos State Environmental Protection Agency (LSEPA) has increased by over 150 per cent the environmental development levy and petroleum storage permit payable which has affected the manufacturers.
Why this matters: The MAN chairman has no doubt given useful pointers on the challenges facing the economy, especially as it relates to manufacturing and the running businesses. This matters because if these challenges are not fixed by the government, there will be continued hardship in the sector. This will, in turn, result in low output, low income and loss of jobs in the long run.
Therefore, the Government must work/improve on the power sector, enable convenient access to the ports and members’ factories, and harmonise all taxes and levies payable to governments. Doing these would make things easier for the sector.