Abiodun assures of stable power supply to boost manufacturing

Ogun State Government has pledged to invest in power infrastructure that will provide steady energy supply across the State, signaling good news for Small and Medium Scale Enterprises and other manufacturing companies.

At the 38th Annual General Meeting of the Manufacturers Association of Nigeria (MAN), Ogun State branch, held at the Conference Hotel in Abeokuta, Governor Dapo Abiodun made the following remarks as the meeting’s special guest of honor.

Abiodun, who was represented by Secretary to the Ogun State Government Mr. Tokunbo Talabi, said that the state is making the most of its position as the state with the most extensive gas reticulation in Nigeria in order to address the menace of irregular power supply. He added that he believes that if the problems with the high cost of petroleum and irregular power supply are adequately addressed, the high rates of unemployment and insecurity will be mitigated.

“We cannot pretend not to be aware that many manufacturing firms hitherto operating in Nigeria have folded up due to irregular power supply and the high cost of petroleum products,” the governor stated.

To “change the narrative” and “redirect the economy for greater performance in the real sector,” the Federal Government under President Bola Ahmed Tinubu mustered the guts to eliminate subsidies from the upstream sector of the oil industry through a deregulation policy.

Abiodun urged MAN to engage with the federal government on projects that will have a good effect on the sector, and he urged the association’s members across the country to back the current administration in Washington.

Mr. Bismarck Jemide Rewane, a prominent economist and the Managing Director/CEO of Financial Derivatives Co. Ltd, spoke as the event’s guest lecturer and noted that manufacturing has generally underperformed over the past five years due to factors such as the Covid-19 pandemic, the Russia-Ukraine war, and a lack of foreign currency.

Although Rewane believes the country is at a crossroads since the naira is undervalued by 32%, he does give credit to the new federal administration for taking the initiative to execute crucial market reforms, such as lowering the level of market distortion in the economy.

The well-known economist urged the federal government to keep moving forward with reforms like rescheduling its debts, revamping its institutions, increasing private investment in the power sector, listing the catalyst for growth, road concessioning, implementing the 2023 Electricity Act, digital innovation, boosting investment flows, paying at least N75,000 as the minimum wage, and sealing revenue leaks.

The immediate implementation of the dual policies of Naira devaluation and subsidy removal without putting in place appropriate buffers for all sectors of the economy has caused inflation levels to skyrocket and has put enormous strain on the manufacturing sector, as noted by the Chairman, MAN, Ogun State chapter, Mr George Onafowokan, in his address.

In addition, Onafowokan mentioned the high cost of electricity, high interest rates on loans, post and customs related issues, and multiple taxes as hindrances to the sector’s necessary growth, calling on governments at all levels to commit to enacting policies that encourage the local survival of businesses and facilitate export, reduce the costs associated with obtaining loans from government financial institutions, and increase the competitiveness of the sector as a whole.