2002年-世界发展银行全球_Nigeria_-_Public_and_Private_Electricity_Provision_as_a_Barrier_to_Manufacturing_Competitiveness_4页_360kb

Summary of "Public and Private Electricity Provision as a Barrier to Manufacturing Competitiveness" in Nigeria

Core Content

This article discusses the significant challenges Nigerian manufacturers face due to unreliable public electricity supply and the resulting reliance on private electricity provision. It highlights the impact of electricity deficiencies on production costs, competitiveness, and overall business operations.

Main Findings

Electricity Supply Issues

• High Cost and Unreliability: Nigerian firms report that infrastructure, particularly electricity, is their biggest problem, more than twice as concerning as finance.
• Generator Ownership: 97% of firms own generators, indicating a widespread reliance on private power sources.
• Public Electricity Subsidies: Public electricity (NEPA) is heavily subsidised, with a cost of 3-5 US cents per KwH, while the actual production cost is 11 US cents per KwH. Private electricity costs are significantly higher, ranging from N9.00 to N39.60 per KwH (approximately 15.9 to 39.6 US cents).

Cost Implications

• Demand Charges: The demand charge, which is based on the installed capacity of the firm, can vary from 22 to 1,836% of the consumption charge, making it a major cost component.
• Fuel Costs: Fuel accounts for 75% of the total cost of private electricity, which is six times higher than servicing costs.
• Private Provision Costs: On average, the cost of private electricity is 2.42 times higher than public electricity, and in some cases, up to 4.4 times more.

Business Impact

• Output Reduction: Firms report output reductions of up to 30% due to electricity outages.
• Product Substitution: Some firms have reduced their product range due to the inability to maintain refrigerated storage and other processes.
• Capital Expenditure: Firms spend 22% of their total machinery and equipment value on private electricity provision, including 3% on maintenance.

Competitive Disadvantage

• Comparative Costs: Nigerian production costs for Paracetamol tablets are 7 Naira higher than in India due to electricity deficiencies.
• Regional Competition: Firms are concerned about competition from Ghana, where electricity costs are similar to Nigeria's, but self-generated electricity is used less frequently, leading to lower production costs.

Key Information

Table Highlights

• Table 1: Illustrates the variation in demand charge as a percentage of consumption charge across different sectors.
• Table 2: Compares the cost of publicly- and privately-provided electricity in Nigeria, showing a significant disparity.
• Table 3: Breaks down the cost components of private electricity provision, with fuel being the largest.
• Table 4: Shows the impact of electricity on production costs, with Nigerian costs being higher than Indian ones.

Conclusion

• The unreliable public electricity supply in Nigeria forces most firms to use private generators, increasing production costs and reducing competitiveness.
• Infrastructure, especially electricity, is a critical barrier to manufacturing competitiveness in Nigeria.
• Improving public electricity provision is essential to reduce costs and enhance the competitiveness of Nigerian firms.

Authors and Sources

• Author: Gerald Tyler, Consultant, Regional Program for Enterprise Development (RPED), Tyler Associates
• Source: Nigeria Firm Survey, World Bank, 2001
• Additional Sources: Studies on electricity costs and production in various sectors, including pharmaceutical and plastics industries

Access Information

• Website: http://www.worldbank.org/afr/findings
• Publication: Findings, a periodic publication by the Knowledge and Learning Center of the World Bank Africa Region
• Contact for Publications: Editor, Findings, Africa Region, The World Bank, 1818 H Street NW, Room J-5-055, Washington, D.C. 20433, e-mail: pmohan@worldbank.org