The Executive Secretary of the National Sugar Development Council, NSDC, Mr. Kamar Bakrin, has revealed Nigerian manufacturers spent an estimated ₦1.34 trillion generating their own electricity, as the cost of power, credit and logistics continues to put them at a disadvantage.
Bakrin disclosed this at the technical session of the 17th National Council on Industry, Trade and Investment, NCITI, in Enugu.
According to Bakrin, factories in Nigeria pay far more than competitors for the three basic inputs of manufacturing. He cited the example of a plant in Aba and one in Ho Chi Minh City to buttress his point.
He said industrial electricity costs about 8 US cents per kilowatt-hour in Vietnam and 10 cents in China. In Nigeria, he said, it is 15 cents on the grid and up to 30 cents with diesel.
“Every factory in Nigeria is running a second, unwanted business as a private power station,” he added.
Bakrin said working capital costs 27 to 35 per cent in Nigeria, compared to 9 per cent in Vietnam and 3 per cent in China.
On logistics, Bakrin said Nigeria ranks 88th out of 139 countries on the World Bank’s Logistics Performance Index. He noted that Vietnam is 43rd and China 19th.
He said despite a market of 230 million people and duty-free access to 1.4 billion under AfCFTA, manufacturing contributes just 8 per cent of GDP, while capacity utilisation stands at 57.7 per cent.
He cited urea production as proof that fixing input costs works, noting that it turned Nigeria from an importer to a top-ten global exporter.
According to him, Nigeria must now choose between competing for the African market or conceding it. He said he presented four resolutions to the Council to reprice the factory floor.