Nanyang Technology University Centre for African Studies revealed that Nigeria’s electricity crises caused a 40% hike in the cost of manufactured products in the country.
Amit Jain, Director of the Centre, presenting a report titled, ‘Back to Growth: Priority Agenda for the Economic Revival of Nigeria’ in Lagos, noted that inadequate power supply was a significant impediment to businesses in Nigeria.
According to the report, Nigeria’s business environment lacks essential elements to attract investment in manufacturing, stressing the need for economic activities to align with the country’s comparative advantage for the sector to remain competitive.
The report stated that the manufacturing sector has much higher productivity than agriculture and can absorb a larger proportion of the workforce.
It identified that Electricity blackouts, transport bottlenecks, crime, and corruption are among the key impediments to firms’ growth in the country. “Lack of electricity adds 40 per cent to the cost of everything in Nigeria. That hurts manufacturing the most. Firms suffer from an acute shortage of power supplies.”
Nanyang Technology University Centre for African Studies opined that economic activity should, at least to begin with, stay within the country’s comparative advantage.
The report recommends the development of industrial clusters. These clusters would provide infrastructural support, access to resources, and skilled labour, ultimately enhancing firms’ competitive advantage.