Power supply and light manufacturing

We acknowledge – as Chinedu Nebo, minister of power as lamented – that the electricity situation in the country, in the past three weeks has been “a nightmare”. 

Also painting a shocking picture of national embarrassment which the power situation has become, Zainab Kuchi, minister of state for power, said over 120 million Nigerians were living in darkness. According to her, out of the 160 million people, only about 40 million (25 percent) enjoyed electricity. 

Nebo had attributed the “nightmare” to recurring system failure. Nebo said: “The power situation in the last three weeks is a nightmare. We have not had the kind of system failure like we have had in the last three weeks. For instance, Bayelsa State was knocked out for three weeks as a result of a breakdown on one of the transmission lines.

It’s doubtful that the cause of the incessant system collapse are the “evil forces” Professor Nebo alluded to during his screening for the ministerial job. Or is it the alleged over firing of the systems to achieve the near-stability in the six cities across the country designated by the Barth Nnaji regime as “priority cities” owing to their economic importance to the nation?

These posers, we hope, are the terms of reference to the recently constituted Technical Investigative Panel on System Collapse. 

We are concerned that the nation’s electricity supply has taken a turn for the worse, impacting negatively on businesses. It needs be stated, for the umpteenth time, that the unemployment tally in the country would have been drastically reduced if the power system had been stable. Sometime last year, when electricity supply was a bit stable, the price of diesel dropped and business-owners could allocate money saved to expand their business. 

Stable power keeps small businesses running, thereby scaling down the number of able-bodied and educated youths roaming the streets; this would have arguably provided worthy and rewarding options to youths who, because of biting poverty in the land, are forced to enlist in untoward ventures. A lot, we daresay, depends on constant power supply in the country.

Reliable electricity supply adds immensely to steady pick up in manufacturing. The sector which contributes 10 percent to the GDP has found support in Nigeria’s demographic growth and their demand for FMCG, cement, appliances, home décor items etc. Gregory Kronsten commenting on FBN Capital’s Purchasing Managers Index for May noted that “employment and stocks of purchases were broadly flat, while those for output, new orders and delivery times showed health improvement.” 

Labour intensive light manufacturing of garments, footwear, leather products and assembly production require low skills, have high export importance and the largest potential for generating jobs. Take leather. A study by Chemonics for USAID shows that Nigeria’s leather export business can generate $43.4 billion – 58 percent of which is for footwear. Demand for high quality leather shoes and bags is rising along with a bulging middle class in emerging economies.

Ethiopia is taking advantage of this increase in demand for leather products – it earned $65.8 million from leather exports between December 2012 and June 2013. Totals exports in 2012 was $2.8 billion. A Chinese shoe maker, Huajian, plans to invest $40.3 billion over five years in Ethiopia.