The president of the African Development Bank (AfDB), Dr Akinwunmi Adesina, has lamented the poor state of power supply in the country noting, no business can survive in Nigeria without the support of a generator.
The former Minister of Agriculture and Rural Development, speaking during the 49th annual general meeting of the Manufacturers Association of Nigeria (MAN) in Abuja on Tuesday said; “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!”
He noted the nation loses $29 billion annually due to lack of power supply and Nigerians spend $14 billion yearly to provide this for themselves – on generator and fuel.
“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.”
Adesina also noted that Nigeria has failed to diversify its export base to high-value market products over the years.
“While for decades the share of manufacturing in Nigeria’s GDP, has hovered around 7%, the nation has not been able to extricate itself from the comatose of its industrial manufacturing sector to unleash the fullness of its potential.
“The performance of the manufacturing sector in the past five years has been poor. Between 2015 and 2017, the sector declined by -1.5%, -4.3% and -0.2%. This is in sharp contrast to the dynamic and rapid performance of manufacturing in Asian countries, such as Singapore, Malaysia and China.
“While Asian countries have focused on the export of manufactured products, Nigeria’s approach has been on import substitution. The manufacturing sector of Nigeria represents only 3% of total revenues from exports, but accounts for 50% of imports in the country.
“Instead of being forward-looking in expanding the share of the manufactured goods in its total export revenue, Nigeria focuses on the model of import substitution.
“Import substitution, while important, is a very restrictive vision. It looks towards survival, instead of looking to create wealth through greater export market and value diversification.
“The end result is a manufacturing sector that cannot develop nor compete globally, but limits itself to “survival mode, not a “global manufacturing growth mode”.