The Kwara/Kogi branch of the Manufacturers Association of Nigeria (MAN) has raised alarm over the skyrocketing price of diesel, saying it has become almost impossible for them to operate.
The branch in a statement by its Chairman, Pharm. Bioku Rahmon, therefore, appealed to the Kwara State and the Federal Governments to urgently come to the aid of the manufacturing industry.
Rahmon said failure to rescue the investors and factory owners would result in massive unemployment due to closure of the factories.
He said the manufacturing sector was facing huge energy crisis with non-existent public power supply and high cost of diesel.
He explained that the manufacturing industry was already battling to recover from the COVID-19 induced economic hardship, adding current energy crisis would cripple the sector.
“National Grid-Supplied Electricity has recorded no improvement.
Renewed wave of Inflationary pressures further plunged the buying masses into extreme depths of poverty with concomitant erosion of customers’ Disposable Income (DI) and hence culminated in low patronage of our industrial finished products.
“Foreign Exchange (FX) Scarcity has worsened significantly, even as Industry players continue to experience a sharp and growing shrink in the FX windows. This has led to major downturns and stress in the purchase and acquisition of foreign components for production.
“The above have long resulted to sharp depletion in the Key Performance Indicators (KPI) of the Manufacturing Industry such as capacity utilization, unsold goods inventory, and sector contribution to National Gross Domestic Product (NGDP) especially since 2020.
In 2021, the unfriendly operating environment and inconsistent business and investment policies of government further paralyzed the manufacturing Industry leading to weak results in the sector, all of which were further exacerbated by the COVID-19 pandemic”.
He added: “As if the above previous and unsolved woes were not enough, and with no solution to the epileptic grid-supplied electricity, Automotive Gas Oil (Diesel) which became a viable alternative energy source open to Industries, has suddenly become a torn in our flesh.
“Figures released by the National Bureau of Statistics (NBS) showed that diesel which sold so highly at an average price of N312 in February 2022 has now more than doubled, soaring to an all-time high price of about N800 ($1.92) this month.
“Power normally accounts for over 40 percent of factories costs, and with this major cost element now more than doubled, its cost implications in the overall cost outlay for industries have precipitated an alarming rise in the production costs, running costs and costs of transporting raw materials and finished products; all of which have now become most unbearable to players in the Industry.
“Compelled by the above industrial woes, many companies have resigned to closing down and laid off all of their staff holdings”.