A deep research into the unemployment rate in Nigeria which has reached a sky-high level reveals that incessant power failure was one of the major problems confronting the nation’s economy.
This drift has led to the gradual collapse of manufacturing industries in Nigeria. It is worrisome that Nigeria has not had it so good in taking advantage of its human and mineral resources that could have boosted economy significantly.
According to a 2017 Q3 report of the National Bureau of Statistics (NBS), Nigeria recorded its highest ever aggregate unemployment rate rising from 14.2 per cent in the fourth quarter of 2016 to 18.8 per cent.
This monumental increase occurred despite the fact that all tiers of governments, as well as the Organised Private Sector (OPS), generated additional 1.2 million jobs, which thus put the estimated labour population at 85.1 per cent for the same period. The indices also revealed that the number of people within the labour force that were unemployed or underemployed increased drastically from 13.6 million and 17.7 million in the second quarter to 18.8 million in the third quarter.
However, electricity is vital to the development of any nation, as industries, small and medium scale enterprises (SME), households as well as government establishments depend on it for sustainable growth.
Far-reaching effects of reliable electricity will build businesses and guarantee economic growth, as capital, labour and energy go hand in hand to drive production; and this will automatically build economies since local firms would be working at their full operating capacities.
Sadly, Nigerians enjoy less than 12 hours of electricity per day. This is seriously having negative effect on the economy as reliance on generators for alternative source of power creates uncertainty and increase costs of production, and higher-priced final goods, which the market may react positively or negatively to upon presentation.
It goes on to affect the growth of global trade, as international organisations expect to buy certain items at assured prices and wouldn’t want to spend far more money on what’s coming out of Nigeria, because of the country’s electricity problems.
Findings have shown that a typical Nigerian firm experiences power failure or voltage fluctuations about seven times per week, each lasting for more than two hours, without warning; which may likely cause damages such as spoiled materials, lost output, damaged electronic equipment, restarting cost operation and distraction of business operations.
According to the World Bank, the total loss in Gross Domestic Products (GDP) to Nigeria over the last 16 years was due to poor electricity supply and can be put at approximately N71 trillion ($470 billion). The release, made by the World Bank Group Enterprise Survey, which surveys a sample of an economy’s private sector revealed that for data samples considered for 108 countries, access to electricity is the top constraint for businesses.
Infact, over 50 per cent of the interviewed African businesses identified electricity provision as a major severe constraint. Consequently, manufacturing sector is the worst hit, when cost of finding alternative source of energy to run businesses became unbearable.
In 2016 alone, manufacturers lamented that about 272 firms had been forced out of business, 50 out of which were manufacturing companies. This trend has led to many factories being converted into worship centres, while some manufacturers swiftly relocated to other neighbouring countries where electricity supply is prioritised.
Workers were laid off in droves. While millions of agile Nigerians, who were victims of this job loss, gradually adopted Okada riding (Commercial motorcycle transporation) and other menial jobs as means of survival.
To solve unemployment problem, the Federal Government should invest and adopt renewable energy as this will help manufacturers, SMEs and also reduce the burden on the national grid. There should also be special incentive and tax waiver on imported solar products to encourage popular participation that will enable people to get access to clean and reliable energy at affordable price.
Among the options for effective renewable energy technology, manufacturers should focus on considerable key methods and substitution systems, such as biomass, solar thermal systems, and electrification.
Manufacturing plants and factories around the world and in the United States in particular, are implementing alternative methods of power generation from renewable energy sources in order to increase production and reduce their energy usage. Alternative energy sources from solar and wind to hydroelectricity and biomass fuel can power homes, vehicles and businesses without using fossil fuels.
Renewable energy is sustainable and easier to maintain than traditional generators. These alternative power sources in renewable energy will significantly contribute to slowing the impacts of climate change in manufacturing.
Government should also regulate power sector to ensure consumers get quality and affordable services like it is being done in the telecommunications industry with the government being the primary body ensuring everyone is fulfilling their obligations in the fairest possible ways for the consumers.
Renewable energy will generate energy that produces no greenhouse gas emissions from fossil fuels and reduces air pollution as well as diversifying energy supply and reducing dependence on the national grid. It will also create economic development and jobs in manufacturing, installations and the likes.
