Akinwumi Adesina, president of the African Development Bank
(AfDB), says the lack of reliable power supply is affecting the growth of
industries in Nigeria.
Adesina said this on Tuesday while speaking at the 49th
annual general meeting of the Manufacturers Association of Nigeria (MAN) in
Abuja.
Quoting a report by the International Monetary Fund (IMF),
Adesina said the country loses $29 billion annually, which is about 5.8 percent
of its gross domestic product (GDP) due to a lack of reliable power supply.
He also added that Nigerians spend $14 billion yearly on
generators and fuel.
“Today, no business
can survive in Nigeria without generators. Consequently, the abnormal has
become normal,” Adesina said.
“Traveling on a road one day in Lagos, I saw an
advertisement on a billboard which caught my attention. It was advertising
generators, with the bold statement “we are the nation’s number one reliable
power supplier!”
Adesina said the manufacturing sector in Nigeria is faced
with numerous challenges; chief among them is power supply.
“To be a manufacturer
in Nigeria is not an easy business. You succeed not because of the ease of
doing business, but by surmounting several constraints that limit industrial
manufacturing,” he said.
“Today, the major challenge facing Nigeria’s manufacturing
is the very high cost and unreliability of electricity supplies. Load shedding
and the inconsistent availability of electrical power have resulted in high and
uncompetitive manufacturing costs.”
Noting that Nigeria focuses on the model of import
substitution, he lamented that the manufacturing sector represents only three
percent of total revenue from exports, but accounts for 50 percent of imports.
He advised the country to create wealth through a greater
export market and value diversification.
The AfDB president further said that unless Nigeria
decisively tackles its energy deficiency and reliability, its industries will
always remain uncompetitive.
“There should be massive investments in variable energy
mixes, including gas, hydropower resources and large scale solar systems to
ensure stable baseload power for industries, to direct power preferentially to
industries, and to support industrial mini-grids to concentrate power in
industrial zones,” he added.
“In addition, we should develop more efficient utilities,
reducing technical and non-technical losses in power generation, transmission
and distribution systems.”
Adesina explained that the Africa Continental Free Trade
Area (AfCFTA) presented a huge opportunity for Nigeria to drive an
export-driven industrial manufacturing pathway.
He said Nigeria should respect the rule of law for illegal
imports not to happen.
“The size of the free trade zone, with a collective GDP of
3.3 trillion dollars, makes it the largest free trade zone in the world by the
number of countries,” he said.
“We must be ready to seize the opportunity and become a key
player based on our massive potential.”
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