Imagine trying to run a business where the lights go out twice in one day, and your only option to keep the gears turning is spending a fortune on diesel. That is the current reality for many manufacturers in Nigeria, who are sounding the alarm over a perfect storm of rising costs and an unreliable power grid. 🇳🇬
At Universal Luggage Industries in Lagos, production is a high-stakes game of survival. Executive Director Frank Onyebu revealed that his company is spending between $139,000 and $146,000 on electricity, yet they are still plagued by frequent blackouts. "Just today alone, we've had two major power outages. Our machinery has been affected, and our production costs have gone through the roof," Onyebu told CGTN. 📉
This isn't just an isolated struggle. The Manufacturers Association of Nigeria (MAN) reports that power-related expenses typically make up about 40% of total operating costs. However, recent fuel price hikes have sent these expenses spiraling. MAN Director General Segun Ajayi-Kadir noted that alternative power spending was approximately $52.6 million even before the latest price jumps. When costs escalate by 200% to 400%, it becomes a critical problem for any business to handle.
The fallout is hitting hard: warehouses are now overflowing with unsold stock because firms have been forced to sell products below cost just to keep moving. When you combine these overheads with weak consumer demand and thin profit margins, many factories are left with a grim choice: absorb massive losses or shut down for good. 🚪❌
While the Nigerian government has introduced measures like duty waivers on machinery imports to help the sector, industry leaders say these are not enough. Without a real solution to the underlying electricity crisis, these waivers are seen as limited in impact.
As Onyebu puts it, "It's impossible to continue running a business like this." The call for urgent government assistance is getting louder, as the manufacturing sector fights to stay afloat in a volatile economy. 📢✨
Reference(s):
cgtn.com
