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Nigeria: Electricity Crisis, Bane of Investment - World Bank
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This Day (Lagos)
20 May 2008
Posted to the web 20 May 2008
Lagos
The World Bank has attributed the high cost of investment in Nigeria to electricity crisis.
Mr Steven Dimitriyev, the bank's Senior Private Sector Specialist, disclosed this at a news conference yesterday in Abuja. He said Nigerian enterprises still faced hostile environment characterised by high indirect cost, which depresses value added.
"Electricity crisis is the most important infrastructure bottleneck in Nigeria today. It is the main driver of Nigeria's high indirect cost," he said. According to him, unreliability of electricity costs an average 10 percent of sales per year to a typical Nigerian firm. Dimitriyev, also the bank's Group Investment Climate Programme Team (ICP) Leader, spoke on re-launching of the State-Level Investment Climate Programme Survey."
"All types of firms experience power outages and 85percent of them own generators, this is higher than any of Nigeria's comparator countries," he said. Dimitriyev identified other problems as inability to simplify taxes, property registration and licences as well as facilitating trade across borders.
He said Nigeria's businesses were also starved of capital,while only five out of 80 percent that wanted loan facilities,actually had one."And when firms do manage to obtain a loan, theyget the shortest time to repay it," he said.He said transportation was another important constraint accounting for four percent of annual sales loses by firms.
"Similarly, the efficiency of customs clearance is also a critical factor. It takes 46 days to clear imports, the second longest among comparator countries," he said.
According to him, enhancing managerial abilities will also reap large productivity gains in Nigeria.The ICP surveyed 2,200 enterprises in Abia, Anambra, Bauchi, Cross River, Enugu, Kaduna, Kano, Lagos, Ogun and Sokoto states, and FCT.
It discovered that labour cost in the manufacturing sectorwas not high, compared to other countries.
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The 200-page report will be re-launched onTuesday, after the first launch on Aug. 30, 2007,The survey was jointly sponsored by the World Bank,DFID, National Bureau of Statistics, National PlanningCommission and the Federal Ministry of Finance.
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