By Rukayat Moisemhe
Lagos, March 9, 2021 The Manufacturers Association of Nigeria (MAN) has said that the energy generation recorded by the sector showed some improvements in the 2nd half of 2020.
The Association made this known in its Bi-annual economic review for July to December 2020 issued by its Spokesperson, Mrs Omotayo Okewunmi, on Tuesday in Lagos.
According to the report, electricity supply from the distribution companies to the sector in the second half of 2020 increased to 12 hours on daily average from the10 hours recorded since the 1st half of 2019.
It, however, stated that expenditure on alternative energy in the 2nd half of 2020 increased to N57.75 billion from N34.70 billion recorded in the corresponding half of 2019; thus, indicating N23.05 billion or 66.4 per cent increase over the period.
“It also increased by N33.59 billion or over 100 per cent when compared with N24.16 billion recorded in the 1st half of the year.
“Expenditure on alternative energy source in the sector stood at N81.91 billion in 2020 as against N61.38 billion recorded in 2019.
“The increase in alternative energy expenditures in the sector was attributed to the general high inflationary pressures in the economy.
“However, specifically, the increase in the petrol pump price exerted significant influence on prices of some of the fuel used by the sector to generate electricity,” it read.
Also, interest rate charged to manufacturers increased to 22 per cent in the 2nd half of 2020 from 20 per cent recorded in the corresponding half of 2019, the report stated.
The increase in the interest rate in the 2nd half of the year was adduced to the opening up of the economy for business after months of lockdown due to COVID-19 and the attendant increase in demand for investible fund by manufacturers in the period.
“COVID-19 had a staggering devastation on global economies as evident in the huge death toll of manpower; the crashing of crude oil price, the slowing of global supply and demand; and the total halting of economic activities through the lockdown.
“At the moment, productivity in the sector is at the lowest and therefore require deliberately orchestrated action to rekindle significant productive activities in the sector.
“Based on the foregoing and with the intent to address the challenges of the sector, we recommend that manufacturers be granted concessional forex allocation at the official forex market for importation of productive inputs that are not locally available.
“We also want a downward review of the current increment in electricity tariff and the current increment in fuel pump-price.
“Government must also construct a critical generational pricing model for the economy that will recognize changes in inflation, exchange rate, lending rate in the determination of wages to encourage consumption.
“We implore the Central Bank of Nigeria to intervene directly to ensure that manufacturers have access to funds, particularly the N1trillion COVID-19 Stimulus Package.
“Manufacturers must also be sensitised on the current feasibility of the N220 billion Micro, Small and Medium Enterprises Development Fund and N300 billion Real Sector Support Facility and how they can be accessed,” it stated.