Nigeria loses $29 billion yearly due to inadequate power supply, according to the president of the African Development Bank (AfDB), while its manufacturers spend up to N10 trillion on energy annually.
This disclosure was made on Thursday by Dr. Akinwumi Adesina, president of the African Development Bank, who also called for an industrial revolution and the digitalization of manufacturing while expressing concern about Nigeria’s epileptic power supply.
The Day the Lion Roared! Making Nigeria a Global Industrial and Economic Giant was the title of Adesina’s keynote address at the Business Day CEO Forum in Lagos.
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The International Monetary Fund (IMF) has estimated that Nigeria loses $29 billion annually—or 5.8% of its GDP—as a result of inadequate and inconsistent power supply. Additionally, Adesina stated that Nigerians spend $14 billion annually on fuel and generators.
“Nigerian industries are dying due to a lack of electricity. Industries in Nigeria spent N931 billion on alternative energy in 2018”, according to the Manufacturers Association of Nigeria.
“Without generators, no business can survive in Nigeria. According to a recent survey of manufacturers in Nigeria, power outages cost them N10 trillion each year.”
Regarding the power industry, Adesina asserted that the nation’s industries would continue to be uncompetitive unless it took decisive action to address its energy reliability and deficiency.
The former Nigerian minister of agriculture also discussed Nigeria’s level of underdevelopment, saying it is quite alarming and requires immediate action.
“At the moment, Nigeria is developing far too slowly and below its potential. The lion must roar in order to succeed. The emergence of an economic titan will then occur.”
“Nigeria should have higher aspirations for its manufacturing sector by moving to integrate into global and regional value chains, quickly moving up the value chains in areas of comparative advantage, and fostering greater specialization and competitiveness.
A well-developed manufacturing sector that is supported by policy and has an export focus will encourage increased innovation, the development of an industrial strategy for export market expansion, and economic structural change. The emphasis would change from preserving foreign exchange to generating new foreign exchange by diversifying exports’ values more.
“Nigeria can earn ten times more from industrial manufacturing than it does from its reliance on oil. Let’s shift our focus from simple import substitution to high-value, export-oriented manufacturing”, Adeshina said.
He claims that Nigeria’s manufacturing sector’s biggest challenge is the extremely high cost and unstable electricity supply.
Adesina stated that Nigeria’s greatest wealth would come from having a strong manufacturing sector that would enable it to compete in regional trade and be integrated into global value chains.
“Nigeria must fully unleash the power of manufacturing with the appropriate policies, investment frameworks, infrastructure, logistics, and financing framework, powered by a highly-skilled, active, and young workforce.”
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