@ multicast

ever heard the story of the native doctor that advised a woman that came to him for help about her insultive husband?
he gave her a stick and told her that anytime the guys is abusing her, she should just chew it without talking
..it worked

dont bother sitting her down to yarn anything. ignore her like shes a baby or be the first to throw tantrums at any small thing
..na she go run

thank me later

Sweetguy25:
And why is everyone talking of manufacturing? Is manufacturing the only sector in the economy?

At least, it's one step beyond trading which we currently specialize in

Pavore9:


Unemployment is just like in Nigeria but with being a Nigerian l smell opportunities which locals ignore as there are a lot of things one can learn easily here at little cost and when he or she implements it in Nigeria it will be an ATM!

I guess this would go at least a little way to buttress the point that the provision of electricity does not automatically equate to job creation

..that is aside from other environmental scanning such as "at what cost will this energy be provided in Nigeria?"

that you are able to smell business opportunities in (or from) Kenya as a Nigerian living there should also demonstrate that perspective is a strong factor in locating and utilizing opputunities. I'll digress from my major point in the OP, and say perhaps, that's how some foreigners also smell opportunities in our country that we who live here are not able to perceive

kcjazz:



Really? You can compete based on cost like Southwest Airlines or even Apple. Cost and profit is relative. In 2007 Lehman Brothers posted profits of 6billion dollars. That is 50 times what Manchester United earned that same year, by 2008 Lehman brothers was no more.

Yep, really.

This would be pushing us beyond my original assertion, but here we go.
(hope I remember corectly what happened)
Lehman brother collapsed because of the sub-prime mortgage
Companies balnce sheet is based not only on raw cash, but also on the value of their assets
Previously, Lehmans' brother's asset were very valuable and so made their balance sheet look good
when the value of the sub prime assets (which was somehow connected to Lehman'ns profits) plummeted,
it also told on their balance sheet, making them a loss making firm

Banks realized that the burst of the bubble was systemic and not something that would go away quickly,
so they refused to extend credit to lehman
In US unlike Nigeria, when your business cannot meet some obligations, such as paying staff, satisfying investors etc it goes burst

The issue is if as a business there is a cheaper efficient means to run then grab it. It doesn't matter what profits you making. It is why many banks run inverters to power Atms.

Agreed

Will better energy solve unemployment? Largely yes.

you've not provided a strong case here. At least not the case below

You can hire better people to help innovate to stay competitive, the catch is better soup na money kill am.

how does better energy equate to hiring better people to stay competitive??

There are so many factors to these unemployment issue and power is huge . Save money to stay competitive.

Agreed, there are many factors. That is why I talk about the holistic view and not the simplistic assumption that says "give us power, and don't worry about jobs, we'll take care of that ourselves"

Sweetguy25:
In this 21st century, knowledge drives businesses and the economy and not necessarily equipments or machinery.

As someone who is quite conversant with the problems facing SMEs in Nigeria, I can easily tell you that electricity is not our major problem.

Access to finance for entrepreneurs is a bigger problem
Lack of proper financial and marketing management is also a bigger problem
Lack of proper operations management is also a bigger problem

Businesses in Nigeria don't "know" how to manage their human and financial resources effectively. That is the same problem with Nigeria as a whole, we cannot manage our human, financial and natural resources effectively and efficiently.

The key problem is knowledge. That is the problem with Nigeria and other third world countries.

We may have 24 hours electricity supply but that won't make our graduates employable and a statistic put the number of unemployable graduates at 70 percent. If graduates are unemployable, they wont get jobs because they can't offer any value to businesses.

We may have 24 hours electricity but if there's no money to start a business because interest rates are at 27 percent, there will be no jobs.

Electricity is not our problem.

Sweetguy is do naw
why are you taking away my shine?

haba
I don't enjoy it when any body get sense pass me

mikolo80:
...
NO WODER MY MUMSIE INSITED ON ME SHOWING THE WORKINGS INSTEAD OF WURUWUR TO THE ANSWER

ahahaha
no kill me with laugh abeg

emiye:
dont get worked up dude, i only feel your thread theme is a naive opinion, no one knows everything, we all have our areas of naievity, i pointed that out to you, but you tried going the condescending away, for that you should be ashamed of yourself.

In clear terms, there are several factors contributing to the high cost of doing business in Nigeria, shortage of power supply sits atop of it, other factors are multiple taxation, regulatory infractions, e.t.c, there is a direct linkage between high Cost of doing business and reduced competitiveness. Competition in manufacturing is not only internal(within the country), it is also external (outside the country), that is why there are several importers of products beseiging china, e.t.c All over the world SMEs dictate the pace of the economy and usually the largest provider of employment, they do not usually start with high profit margins, when their supposed small profit margins are eroded through high cost of production due to power supply costs, they sometimes end up running at a loss and closing up in a very short time. Many artisans abandon their productive work due to poor power supply and become motorcycle riders. Stable power supply reduces cost of business, and encourages more SMEs and multinationals, luckily cheap labour abound. There is a reason American companies prefer moving factories in to china instead of staying in America, they want to tinker and reduce cost of doing business which cheap labour in china boosters.

now you're almost sounding like a pleasant and sensible fellow
keep it up and you'd be dinning with diplomats not riffraffs (except u like our brand of politics)

But the punishment for your previous misyarn is that I won't tackle this post for now. maybe another time

anonimi:


That is why SENSIBLE countries impose stiff tariff regimes to discourage imports thus enhancing the national competitive environment to grow the industries, innovation, revenue and employment.
China, India, South Korea etc did it.

..........Abi na where the cheap imports want lead us to

o boy u get sense
sensible people are not allowed here

mikolo80:

ENGLISH NOT OUR FIRST LANGUAGE
MOST ALSO READ TO PASS EXAMS AND NOT THINK
NOT THEIR FAULT
ITS THE WAY THEY WERE EDUCATED

lol
you're funny

mikolo80:
BRO WE ARE NEW TO DEMOCRACY(FACT)
WE'VE TAKEN THE FIRST STEP(VOTD OUT PDP) TO "ENSURING" GOOD POLICIES
HOPEFULLY WE GET TO TEST RUN THE POWER OF RECALL ON IDLE LAWMAKERS

good
I just hope that the new political gladiators are not as simplistic as their electorate

I hope they do not like the electorate say "lets' give them 24 power supplier and they the electorates will create jobs themselves"
then they go about awarding electricity contracts and awaiting this job creation magic to happen on its own

Sweetguy25:
If MTN constantly makes about 700 billion naira every year in Nigeria with the present electricity conditions, I will gladly opine that electricity is not a primary cause of employment/unemployment.

abeg chop knuckle
I liked the way u said "primary"

mikolo80:
COST SCHMOST
ALL THESE YOUR SEMANTICS
YOU KNOW WHAT NIGERIANS MEAN WHEN THEY SAY THEY WANT ELECTICITY(POWER/LIGHT/NEPA/PHCN)
ELECTRICITY AT TODAYS CHEAPER(LARGE SCALE WHOLESALE COMPETITIVE ) PRICE

kudos
you're breaking it down

You really think that the calibre of some of the Nigerians that have commented here, know what they mean when they say they want electricity and daz all?

If they did they would not have jumped in gregariously shooting me down like a manic herd

omenka:
Something the equivalent of "co-location" in the telecoms can be used to eliminate the cumbersome nature of this. Once the will is there, it can be done. The technology is readily available.

So, I guess this is a suggestion from you (not what is presently in the works)
am I correct?

mikolo80:

SHELL CAN AFFORD GAS TURBINES(BIG ASSS ONES)
IF MANUFACTURERS ASSOCIATION OF NIGERIA WEREN'T MADE UP OF OLD FARRTS THEY'D PULL TOGETHER AND GET BANKS AND STOCK MARKET TO FUND 100-1000 MW OFF GRID INDUSTRIAL PARKS(25MW EVEN) AROUND VIABLE INDUSTRIAL CLUSTERS(ABA,LAGOS,OGUN,IBADAN,KANO,KADUNA)

Great
ah,.....thank God say intelligent people still dey here ooo
Now, this is what is called thinking out of the box, not just sitting around bottles of beer and rubbing ones belli then mouthing "Give us power and forget job creation we are special and can cope on our own"

This brings us back to the beauty of ensuring or proposing that government policies are purposefully designed to encouraging such actions
and reducing environmental barriers

mikolo80:
DEMAND AND SUPPLY PEOPLE WILL FORCE GARRI TO FIND LEVEL IF NOT GARRI WOULD BE SOLD 1MILLION PER KONGO.PLEASE BE REALISTIC

One of NairaLand rules (nos 11) is do not write in all CAPS

Demand and supply and its effect on cost works better in a free market
Unfortunately, it is difficult for some industries to fall neatly and un-nurged into this model. Central water generation for example, and Central power generation (although omenka raised an idea on this which I am curios to see how it works)

I.m being realistic when I say government has a role to play in devising strategies and policies that should keep cost of energy source low while ensuring that the organisations providing them are able to make good profit margins.

i'm also being very realistic when I say that government should assiduously work towards consciously creating the enabling environment for job creation

omenka:
And who says you can't switch?? The gencos and transcos would have their dedicated infrastructures (transformers and power lines) just as you have the various telecoms service providers with their respective masts and fibre optic cables. Then they also would have their various metre cards (which are sim cards for telecoms). The metres would be the equivalent of phones (one can switch the cards just as one can switch sims) and you can purchase units from whichever service provider you desire just as we purchase recharge cards. You can paint the rest of the picture from there

There you have it. It is not rocket science. That is deregulation for you.

uhmmm
interesting. If I get you correctly
I'm not aware that each household would have multiple transmission wires from different providers running into the same meter from which the users card of choice can be programmed to select the lines that should be used.

Is this a statement of fact or a proposal?

emiye:
see the example of naievity, I talked about. if d cost of doing business is high, how well can the factory stay competitive? in no time, whatever being produced in house will be replaced via demand by import substitutes, the coy does not stay afloat, and it sacks its workers.

when folks bring ideas to the table you counter them with greater or equal ideas not insults
that's what makes you a homo sapien, fit for interacting with civilized society and not a haphazard concocted product of a broken system

get it?

kcjazz:
Are "flexible energy" sources healthier? Have you considered lost man power hours due to illness? Do you also know that respiratory illnesses are one of the highest in Nigeria? The costs cannot be justified in any way for generators. Alternative like PHCN are cheaper.

If the cost of doing business is high factories will close. At night I need security lights on, I only have a 15kva generator. I don't have the grid light. At low productivity, now I run my generator overnight to keep the fridge on and for security. It burns fuel irrespective of the capacity. Pollutes the environment as well.

Phcn and their likes all over the world are monopolies because of the infrastructure costs, prices come down based on scale. The only way generators can be cheaper is if they are all connected to the grid and excess capacities shared among consumers. That is not possible.

Companies should consider alternative sources like solar to cut costs

good argument ..but
Factories don't close if the cost of doing business is high
they close if they are not competitive.

Competiveness in turn is dependent on many factors including its cost relative to profit and revenue, and the environment the business competes in

If a business spends 1 billion on energy and makes 1 trillion profit, it wont close shop easily except the environment forces it to

Pavore9:


l live in Nairobi and have 24hrs access to electricity and my monthly electricity bill is not even up yo N1,000 but l know how high my productivity have been. My brother in Lagos is into production and his edge is that his machines do not requires electricity though manual even a 7 year old can operate it. For every of the machine he imports from the U.S for just N80,000 (which is the cost of some people's phone) he employs 2 Nigerians and his finished products he exports to Kenya at a shipping cost of N740 per kilo, l feel happy to see that what he produces in Lagos is highly regarded here in Kenya!

We also have to look into energy source, l have understudied many farms here in Kenya that generate some of the power they use in the farms from waste generated from the farms thus reducing cost of production.

great
Some great and valid points you've made (especially with regard to alternative energy sources....ur strike me as a proper business minded person) but quite many which can push me off what I aim to pass across.
for example, I could ask who provides this central electric power in Kenya, how long it has been provided by the provider, and if there is any direct intervention by the government on cost of this power.

However, quick one.
what is the unemployment rate in Kenya? just curious

Volksfuhrer:


Perhaps simpler is better. Your attempt to discredit a generally held belief by smuggling into the discourse a far-fetched premise of cost of running 'flexible' power is intellectually dishonest. Why would 'inflexible' power be more expensive per unit of scale? It is an economic aberration!

The question we should answer is, 'would fixing power create more employment given the status quo?' Well, the answer is 'yes'!

Nobody is saying the use of a resource like power could not be optimised with better policies, so what exactly is the point you are making!

Projecting a veneer of sophistication with esoteric economic assumptions is practically useless! People on the streets are much smarter than your condescending attitude suggests.

Kindest regards

lol
with such words bolded above, ur apparently more into emotive Nigerian political kinds of discussions

u're making some point I would have tackled, but you're don't appear suitable to sharing objective ideas with

omenka:
It would be foolhardy for Government to deregulate (privatise) and then regulate prices as well. What I believe is, with sincerity, the success in the telecoms sector can be replicated in the power sector. As long as there isn't monopoly, competition would naturally take care of the cost of services provided.

There is no way one can argue for running businesses on generators in preference to sustenance of businesses on public power supply.

I do like your approach
However do consider that telecoms is not same as electricity generation and distribution
whereas the consumer can easily switch from one telecom provider to the next thus sort of minimizing provider monopoly
its not same for electricity per se.
You're not going say, "hey guys switch me from company x power supplier to company y"
it does not work like that unfortunately because of the infrastructure that facilitates central power distribution

Pavore9:


If you are in such business you must preserve it or it gets rotten. if the cost of electricity from the power company is same as running my generator l will still go for the power company as l do not have to deal with pollution and noise associated with generators. l do believe there are severally ways through which the cost of electricity supplied can be lowered.

I think you and I are chiming now

Environmental and noise pollution aside, you can see that electricity is electricity and the source has little or nothing to do with job creation.
One of the crucial factors is the cost of the source electricity relative to one's or a company's income/revenue.

In essence, job creation is a science on its own that needs the government to have a purposeful strategy
folks screaming to the govt: "give us electricity and don't worry about jobs" are being too simplistic on how things work

Volksfuhrer:


Don't bother yourself with that half-baked analysis. Perhaps, the op is blind to factories closing down, laying off workers and relocating elsewhere! The money you spend to fuel your generator has alternative uses: it could be saved or invested or better still stimulate demand for other goods and services! SMH at the op!

grow up
Factories relocate or close only if they are not making profits or if some other environment is more conducive for business
Does Shell complain about electricity?


the aim of my article is simply to do away with simplistic reasoning like yours

emiye:
you are the naive one.

Children shouldn't speak when elders speak you know

Pavore9:


Let us assume l open up a butchery which requires electricity to preserve the meat, l would certainly need workers.

Push this further

So if the central electricity is supplied by Dangote et al and it costs almost as much as your generator, would you still use it to preserve your meat?
would you then employ workers?

omenka:
your argument is terribly flawed. You are just quoting arbitrary figures to support your stand. If you say the bolded, then one could easily assume the reverse of course, thereby rendering your point useless.

Now, look at this:

For the regular "I pass my neighbor" generator, a full tank which is about 5 litres would cost N450 (assuming an average cost of N90 per litre). A full tank runs for 7hours on average. If it is operated for 24 hours, it means one would require about 15 litres, bringing the cost of running it for that long to N6,750!! Multiply this by 30 and you get a whooping N202,500!!

If one were to slash this figure in half to reflect that these businesses run on an average of 12hours a day, you'd still get N101,250!

Now, compare that to what is charged on average by electricity regulators for such small businesses that run on such generators and you'd see what a colossal loss of income and savings businesses suffer. These are monies that could be reinvested into expansion of businesses which then translates into hiring more hands (employment).

Your argument really doesn't hold water.

Good debate
I probably need to set the context but that might be too long and complex.

In summary, I'm saying something like this:
If you guys say to the government "just give us power and don't worry about jobs"
and then the government does get private monopolistic investors/coys in that do provide constant power but at astronomical prices plus taxes
you'll end up in almost the same situation as with the cost of your personal power generation.

And then everyone gets upset with the government

So, what really matters is deliberate policies and actions to achieve specific and inter related results
A rough example is that the government could have a guidance that the price of energy should ordinarily not be more than 20% of the average earning power of Nigerians

Tayeni:
i dont have to even share this with friends offline....there are enough sound people here to tear your article into shreds.

Not many of the ones responding so far unfortunately -sound no

The first step to take on our journey to industrialization (which will in turn take care of unemployment) is to take care of the Power problem....otherwise, all the policies put in place wont work.

Nope power does not necessarily take care of unemployment
There are more developed countries than ours that have power but also suffer unemployment issues e;g Greece

Remember that the cost of Power relative to earnings can also be a factor

In response to your questions
*yes i 'm into business.
*i dont have to be formally trained in economics and sociology to do the simple math Omeka did up there(check it out again)....my primary sch education will suffice.

good

chuna1985:
This guy has never done any business involving power. if u have, u will discover that it costs millions of naira monthly to fuel generators for big manufacturing companies.

Getting electricity is the most important step to create employment, government laws is the second.

Did you read my piece?
If you did, you would have noted my emphasis on trashing the assumption that centrally generated power always equates to cheap source of power

Pavore9:
More SMEs will pop up thus jobs.

How?

nwanna89:



He has a point. We run a manufacturing company and EEDC gave us a bill of 70,000 naira when we barely even get light upto 12 hours per week. I can imagine what the bill will be like when we have constant power. Constant electricity is important but we cant overlook the cost. I believe thats what he is trying to say

You got it
Interesting that some business men on Nairaland take it for granted that centrally generated electricity should always be very cheap

Tayeni:
let me get you right before i reply appropriately....
Are u implying that its cheaper to run a generator than to pay ur electricity bills?.
i suspect you are a student therefore not yet responsible for your bills
or you have never run a business before
or u are not resident in Nigeria
or simply being mischievious....

-I am not a student
-I have run businesses before and still working on some
-I reside in Nigeria as well as else well. This gives me an advantage of looking at things from multiple angles
-I am not being mischievous, rather I am being mentally rigorous.


Now, questions for you:
-Have you ever run a business before?
-Are you adept at sociology and economics?


I made a glaring point in my article and response to your previous post, which you have not been able to pick
this is what entrapment in assumptions cause.
Try sharing the article with a sound friend and watch out for the persons reactions