Manufacturers in Nigeria have called for a significant reduction in the price of domestic gas, saying high energy costs are making it difficult for businesses to expand production and create more jobs.
The Managing Director of Coleman Technical Industries Limited, George Onafowokan, made the call while speaking on the challenges facing the manufacturing sector.
Onafowokan said manufacturers that have invested heavily in gas-fired power generation should not be required to purchase gas at prices as high as $8.70 per thousand standard cubic feet. He proposed a reduction to about $3.50 per thousand standard cubic feet.
According to him, a lower gas price would reduce operating expenses, strengthen the competitiveness of Nigerian manufacturers and encourage further investment in local production.
He disclosed that Coleman had committed more than $20m to gas-powered electricity generation as part of efforts to maintain its operations, sustain jobs and overcome challenges associated with unreliable power supply.
The industrialist, however, said the cost of gas was undermining the benefits of such investments and could discourage other businesses from committing capital to manufacturing.
He commended recent Federal Government measures aimed at improving the electricity sector, including efforts to decentralise power generation and promote gas-powered equipment. However, he identified the pricing of domestic gas as an area requiring further policy intervention.
Onafowokan also urged the Central Bank of Nigeria and the Ministry of Finance to provide stronger financial backing for development finance institutions such as the Bank of Industry. He said manufacturers and small businesses needed access to affordable financing to expand their operations.
He identified manufacturing, agriculture and trade as major sources of employment and argued that these sectors would require coordinated government support if Nigeria is to achieve its ambition of becoming a $1tn economy.
He noted that agriculture and manufacturing were closely connected, particularly because local processing and value addition could increase economic opportunities and generate employment.
On interest rates, Onafowokan supported the CBN’s decision to maintain the Monetary Policy Rate at 26.5 per cent, saying the position could help balance inflation management with economic stability.
He nevertheless projected that interest rates could begin to decline over the next two Monetary Policy Committee meetings, potentially by 25 to 50 basis points.
The Coleman chief executive stressed that monetary measures alone would not be sufficient to deliver strong economic growth, calling for complementary fiscal policies from the Federal Government.
He further urged policymakers to maintain consistency in their economic policies and preserve political stability, saying both were important for attracting investment.
Onafowokan said stronger domestic investment, supported by predictable government policies, would help Nigerian businesses expand and contribute to sustained economic growth.
