New Telegraph

Manufacturers, businesses lose N40.04trn to 12 nat’l grid collapses in 12 months

The persistent collapse of the national grid is causing the nation a huge loss, the Saturday Telegraph has gathered authoritatively from the Manufacturers Association of Nigeria (MAN).

Investigations revealed that an estimated N40.04trn ($26bn) was lost to the frequent collapse of the nation’s national grid in 2024.

The figure was arrived at using the closing rate of 1, 540/$1 at the forex market on Friday.

According to a report from MAN, businesses in the country spend around $22bn yearly on off-grid fuel, further driving up operational costs.

The Organised Private Sector (OPS) hinted that the frequent collapse of the national grid and 250 per cent increase in electricity tariff has caused many local manufacturers to decide to stop getting power supply from the national grid next year.

Sources revealed that abandoning the national grid and embracing alternative energy sources in 2025 are top on the agenda of manufacturing firms in the country.

Speaking in separate interviews with Saturday Telegraph, the Director-General of MAN, Segun Ajayi-Kadir; Director-General of NACCIMA, Sola Obadimu and the Managing Director of CPPE, Dr. Muda Yusuf, all alluded to the fact that the frequency of collapse of the national grid has shown that the country’s power sector is failing and that no serious minded local manufacturer would continue to rely on the grid for optimum production again considering the losses already incurred on production.

Obadimu explained that many local manufacturers have lost faith in the country’s power sector.

The NACCIMA DG said, “Every serious business in Nigeria has lost faith in power supply from the fragile national grid. It is like people have changed their minds on getting power from the national grid again. So the abnormality has become normal. I am sure all serious businesses have already prepared for such occurrences next year and are making urgent plans for 2025.

“You know that when something happens to you, not the first or second time, it can’t take you by surprise again. But you will just have a permanent plan in place against such an occurrence. So it is actually no longer news when the national grid collapses.

“When you increase tariffs, and there is no power supply from the national grid, what would you do? So, all serious businesses have already made contingency plans to leave the grid next year.”

Similarly, Dr. Yusuf noted, “Of course, switching off from the national grid is top on the agenda of many businesses for 2025, as they are now searching for alternatives. Even when it is available, how many people can afford it? You talk about Band A, how many people can survive on it currently, it’s so difficult? The strategy for survival for many businesses is to go for alternative energy sources because the current energy options are expensive. It is not cost effective and they are not making production competitive, so those are the issues.”

The MAN DG opined that for the national grid to collapse 12 times in 2024, there is need to emphasise an alternative energy to reduce dependence on the national grid. He added that there should be policy intervention to stabilise electricity generation and attract investment into renewable energy solutions.

Speaking on the 250 per cent increase in electricity tariff, Ajayi-Kadir said that the increase has been threatening the survival of businesses in the country, saying that medium size companies using 700kw are paying about N1.4 billion on electricity per annum.

He added that MAN has received numerous complaints from its members on the implications of the astronomical increase in electricity tariff by the Nigerian Electricity Regulatory Commission (NERC) for Band A customers without the required and proper consultations with the private sector.

According to him, this sudden exponential increase in the face of inadequate electricity supply is inimical to the competitiveness of Nigerian products and businesses, saying that it will definitely worsen the high cost of production.

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