How channeling of infrastructure to manufacturers can drive productivity

Manufacturing

“Specifically, the operators cited poor electricity and gas supplies/non-reliability of gas supply/scarcity of diesel/high cost of LPG as the highest impediment to production in the country”

Like previous years, manufacturers and private sector operators last year complained about lingering infrastructural issues with access ports, power and Lagos traffic ranking top in the concerns identified for action.

Despite government’s ease of doing business initiative, poor pace of productivity as a result of lingering challenges not limited to the multiplicity of regulation, poor access to power and the nation’s ports, remains.

The Manufacturers Association of Nigeria (MAN) noted that the operating environment remains challenging and depresses productivity in the manufacturing sector.

Specifically, the operators cited poor electricity and gas supplies/non-reliability of gas supply/scarcity of diesel/high cost of LPG as the highest impediment to production in the country.

Manufacturers are strategic users of gas

Indeed, the CEOs of manufacturing companies in Nigeria urged the government to improve basic infrastructures within strategic economic hubs nationwide, classify manufacturers as strategic users of gas, expand the roads leading to Lagos Ports and make other ports outside Lagos functional to reduce cargo traffic and stimulate economic activities in those locations.

They noted that port-related challenges at the Lagos ports still persist. For instance, the Director-General, Manufacturers Association of Nigeria (MAN), Segun Kadir, added that traffic gridlock makes manufacturers more susceptible to miscreants who take advantage of the situation.

Repair Road in the night, not day time

Kadir in a chat with The Guardian earlier, however urged the government to embark on road repairs in the night when there is less traffic, saying that road repairs during the day time is not the best option.

On measures to address power challenges in the real sector, he said: “What we have is what we call the manpower development company which was facilitated to give our members access to power.

Power is like blood to manufacturers

As you know, power is like blood to the manufacturers; so, what we have done is to create a company that is a special purpose vehicle that will be able to have an arrangement with suppliers of power whether captive or through the national grid to be able to reach our members in clusters.

However, we have been hampered by the not too successful attempt of the Eligible Customer Scheme. What has hampered is actually the fact that we are required by some regulation to have a no-objection letter if you like from the Discos, with whom we are also engaged in a court case. So, it is like asking your enemies to pray for you. I think essentially, we are trying to go around that, but we are saying that there has to be more ingenious ways for us to benefit from capturing the so-called stranded power.

Culled from Guardian Nigeria

Read more: https://guardian.ng/business-services/industry/how-channelling-of-infrastructure-to-manufacturers-can-drive-productivity/

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