Manufacturers Spent N60.47Bn On Alternative Power In Q1 2023
The Manufacturers Association of Nigeria, (MAN), in a half year executive summary of the economy said the expenditure on alternative energy sources declined to N60.47 billion in the first half of 2023 from N76.70 billion recorded in the second half of 2022, thus indicating N16.23 or 21.2 percent decrease in the period.
MAN acknowledged that electricity supply to the industries from the national grid in the first half of 2023 increased marginally to 11.3 hours per day from 10.2 hours recorded in the same period of 2022.
“Consequently, expenditure on alternative energy sources declined to N60.47 billion in the first half of 2023 from N76.70 billion recorded in the second half of 2022, thus indicating N16.23 or 21.2 percent decrease in the period. It also declined by N7.33 billion or 10.8 percent from the N67.8 billion recorded in the same period of 2022,” it noted.
Even though power supply to industries rose marginally manufacturers explained that it required more than the supply which necessitated the enormous expenditure and they were confronted by another major hurdle which is the high cost of obtaining funds.
This challenge, according to the survey is substantiated by data gathered during the fieldwork for the first half of 2023 report, noting that the average lending rate to the manufacturing sector from commercial banks remained high at 24 percent when compared with what was recorded in the corresponding half of 2022.
“However, the cost of funds for the manufacturers increased by 2.0 percentage points when compared with 22.0 percent recorded in the second half of 2022.
“The lending rates offered by commercial banks to industries are significantly influenced by the continuous upward adjustments in the Monetary Policy Rate.
“These adjustments aim to maintain a favorable real interest rate environment, with the goal of attracting foreign investment inflow, defending the domestic currency (Naira) and curbing the spiraling inflation,” the survey report added.
