High Production Costs Hinder Nigeria's Manufacturing Sector

Kamar Bakrin, the Executive Secretary of the National Sugar Development Council (NSDC), presented a paper at the 17th National Council on Industry, Trade and Investment in Enugu, revealing that Nigerian manufacturers face significantly higher production costs than their counterparts in Vietnam and China. He noted that electricity costs in Nigeria are about 15 cents per kilowatt-hour on the national grid, rising to nearly 30 cents with diesel generators, compared to 8 cents in Vietnam and 10 cents in China.

Bakrin stated that Nigerian manufacturers spent approximately ₦1.34 trillion generating their own electricity in the previous year. He emphasized that the high cost of production, rather than weak demand, is the primary challenge for manufacturers, with capacity utilization dropping to 57.7%.

He also pointed out that Nigeria ranks 88th on the World Bank’s Logistics Performance Index, while Vietnam and China rank 43rd and 19th, respectively. Bakrin argued that competitive pricing of industrial inputs, as seen in Nigeria's urea industry, could enhance manufacturing prospects.