Nigeria’s manufacturing sector, a key component of the nation's economy, is facing significant energy challenges due to unreliable electricity supply and rising fuel costs. In an exclusive interview with Channels Television, Segun Ajayi-Kadir, Director General of the Manufacturers’ Association of Nigeria (MAN), expressed optimism that Dangote Refinery's initiative for free fuel distribution will eliminate profiteering middlemen and transporters who financially burden manufacturers. He further suggests that the success seen in this private refinery indicates that government involvement in fuel refining should be minimized; instead, he advocates for selling off all four national refineries to enhance national energy security.
If we hadn't ended the subsidy, it would have overwhelmed or even destroyed us. Eliminating it was the most prudent decision for our country at that moment. While we've progressed since then, the short-term consequences have been severe for the manufacturing sector.
The elimination of the subsidy led to higher logistics costs and inflation, among other effects. However, it's worth noting a major positive action by the administration: following the removal of the fuel subsidy, they have implemented several reforms that have provided relief in that sector.
Regarding the second question about the Dangote phenomenon, it highlights that private sector investment is crucial and suggests that government should not be directly involved in business operations. Instead, the government's role should be to establish an environment where the private sector can flourish.
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