Nigeria Must Reduce Production Costs to Compete

Kamar Bakrin, the Executive Secretary of the National Sugar Development Council (NSDC), addressed the need for Nigeria to cut high production costs to avoid losing domestic and African markets to more competitive economies. Speaking at the 17th National Council on Industry, Trade and Investment (NCITI) in Enugu, Bakrin pointed out that Nigerian manufacturers face significantly higher costs for electricity, financing, and logistics compared to their counterparts in Vietnam and China.

He noted that while factories in Vietnam and China pay between 8 and 10 US cents per kilowatt-hour for electricity, Nigerian manufacturers often pay up to 30 cents when diesel generation is included. Bakrin mentioned that manufacturers spent approximately ₦1.34 trillion last year on self-generated electricity.

He also highlighted that lending rates in Nigeria range from 27 to 35 percent, compared to about 9 percent in Vietnam and 3 percent in China. Bakrin emphasized that these structural costs are the primary obstacle to industrial growth and urged Nigeria to capitalize on recent macroeconomic reforms and the African Continental Free Trade Area (AfCFTA).