Home >> Business >> 196 Manufacturing Companies Shutdown in 2 Years
196 Manufacturing Companies Shutdown in 2 Years

Statistics coming from MAN shows that about 196 manufacturing companies closed down during the recession due to harsh operating environment.  Despite several efforts by the Federal Government to cushion the effects of recession on the economy, recent figures from the Manufacturers Association of Nigeria (MAN) have shown that about 196 manufacturing companies shut down their operations in the last two years due to the biting recession.

This represents over 300 per cent increase compared to 45 companies reported to have closed down last year in the first year of the present administration.

Last year, in the heat of forex restriction, MAN stated that over 45 companies were shut down as 220 Medium and Small Scale Enterprises (MSME) closed down while over two million jobs were lost. In the same vein, the association said this resulted in a huge financial loss of about N62.184 billion.

According to MAN Director of Economic and Statistics Department, Oluwasegun Osidipe, “a quick survey of MAN members and with data provided for foreign exchange losses as at the end of 2016 indicated about N62.184 billion was lost.”

The association explained that the closures and the job losses could be attributed to the unfavourable operating environment in which forex component and cost of power generation played prominent roles.

MAN stated that the share of energy cost to total cost of production in the sector is estimated at 36 per cent, which is one of the highest in the world.

“MAN survey shows that member-companies estimated annual expenditure on alternative energy source was N129.95 billion in 2016 from N58.82 billion recorded in 2015. If this amount is aggregated with billions that are paid to Discos annually, expenditure on electricity by our members, no doubt, is colossal,” Osidipe noted.

The statistics from the association said for years, electricity supply to the manufacturing sector has been abysmally poor with an average of seven hours supply and seven outages per day.

While urging the government to continue to make forex available to the sector, the Organised Private Sector (OPS) said that Federal Government may need to reconsider its position on the partial privatisation of the electricity sector, if the country wants to have regular power supply to salvage the economy.

The Nigeria Employers Consultative Association (NECA), said corporate consumers are at the receiving end of the ineptitude of the electricity sector. The Director General of NECA, Segun Oshinowo, said the corporate citizens are having serious challenges, which he said affects business adversely.

Tags :

the author

Leave a Reply

Your email address will not be published. Required fields are marked *

Top