Industry blames Nigeria's power crisis for millions of lost jobs

Chronic electricity shortages are largely to blame for the loss of three million jobs and the closure of hundreds of factories in northern Nigeria's commercial hub, local business leaders say.

"In the last 15 years, more than three million jobs have been directly and indirectly lost in Kano with the closure of more than two-thirds of our industries -- due mainly to power shortages," said Ahmed Rabiu, vice-president of the city's Chamber of Commerce.

"There were 500 industries in Kano in the mid-1990s, but more than 400 have since closed down and the workers left without a means of earning a living," he told AFP on Monday.

Nigeria has been grappling with a power crisis for almost two decades with its generating plants described as a shambles amid corruption and mismanagement within its sole national power generating company PHCN.

A review of the sector issued last week by a special presidential committee said 85 billion dollars (54 billion euros) would be needed for the country of 140 million people to enjoy a "stable power" supply.

Nigeria poured 16 billion dollars into its epileptic power sector under former President Olusegun Obasanjo over the past eight years, but manufacturers say power has become even less reliable.

Twice in recent days, the country was thrown into total darkness with the collapse of the power generation system at its only source of electricity at Shiroro hydro station in central Niger state.

Despite nine new thermal stations being slated for completion, Nigeria remains drastically under-supplied -- with the head of the Nigerian Electricity Regulatory Commission (NERC), Ransom Owan, telling AFP last May that demand stood at 20,000 megawatts but that generation capacity was only 3,000 megawatts.

In Kano alone, the daily power requirement stands at 250 megawatts but PHCN's supply does not exceed 80 megawatts, according to PHCN officials.

"There are now less than 100 factories operating, under strain, because none of them is producing at half of capacity due to high production costs as a result of lack of power," said Ali Madugu, head of the Manufacturers Association of Nigeria (MAN) in Kano.

Increased production costs are attributed to the price of diesel, needed to power machinery.

Kano once had flourishing textile, plastic, food and beverage industries, as well as foundries and tanneries.

But a visit to the city's three industrial estates of Sharada, Challawa and Bompai shows them desolate with the bulk of the factories now closed.

President Umaru Yar'Adua promised to declare a state of emergency in the power sector by the end of June, but has yet to do so as he fights corruption and unrest in his stated bid to use the country's vast oil wealth potential to propel its economy into the world's top 20.

Saidu Dattijo Adhama, a garment manufacturer who closed down his factory and laid-off 314 workers, cited the lack of power as his major reason.

"High interest on bank loans and stiff competition from cheaply produced Asian goods kill local industries, but these pale in significance compared to the lethal blow lack of power inflicts on industries," Adhama said.

Kano state government has for the past five years been promising to set up an independent power plant, but negotiations with Canadian and Indonesian firms have yet to result in concrete proposals.