The northern Nigerian city of Kano was once a hub of commercial activity. Today, it's a different story: over 70% of its factories are shut. Those that are open are working at 40% capacity or less. The reason: sporadic electricity supply.
Adhama Textiles Nigeria Limited is one of the hundreds of medium-size industries affected. It's now operating at about half its capacity.
"It's going to be difficult to operate while you get only four to five hours electricity supply in 24 hours," says Adhama Chief Executive Officer Saidu Dattijo Adhama. "The cost of production is very high."
The government, he says, must address the electricity problem. Adhama says energy supply shortages in Nigeria's have forced companies and industries to downsize and drop workers, which has increased unemployment.
"You see in the past we [Adhama Textiles] were employing 335 workers at 80% capacity. Due to all these issues mentioned above we dropped to 24 [workers] only. So everything has gone down."
Adhama says the Power Holding Company of Nigeria may supply energy for only four hours a day, several days a week. For the remaining hours of production, the company purchased a large power generator.
But he says the generator is not economical because of the high cost of diesel, which is selling at 150 naira per liter, equivalent to $1.00 U.S.
Public-Private Partnerships
In response, Ahmed Yakasai, the Kano State Commissioner for Commerce and Industries, mines and cooperatives, says the government recognizes the problem, though he adds that power shortages are common in Nigeria.
Kano State is the hardest hit because it is a commercial center and an industrial state. Yakasai says proposal at an economic summit sponsored by the Kano State three years ago may provide relief: a public-private partnership between Kano State and the company Tiga Energy Resources.
"We have to come up with an emergency independent power project which is going to have dual fueling -- black oil and diesel," Yakasai says. Once the project is underway, he estimates it will take six months to complete.
Private Businessmen Offer Their Own Plan
But the partnership agreement is not yet signed, and some manufacturers are setting up their own independent power station.
"We have realized that the power which we have been promised by the government is not forthcoming," says Alhaji Sani Umar of the Manufacturers Association of Nigeria.
He says the association has already signed a memorandum of understanding with a private foreign firm. Together, they plan to up a power plant to supply energy directly to industries and companies in Kano. He says he hopes the new arrangement will settle the electricity problems once and for all.
