A severe economic crisis looms over Faisalabad as more than 100 factories have been forced to close due to unmanageable electricity costs, according to SM Tanveer, Patron General of the Federation of Chambers of Commerce and Industry.
The situation, revealed during a press conference in Lahore, underscores the dire consequences that rising energy prices are inflicting on the country’s manufacturing sector, threatening both domestic stability and Pakistan’s position in global trade.
The alarming shutdowns come as a direct result of soaring electricity costs, which Tanveer described as an unsustainable burden on manufacturing operations.
His urgent call for revising contracts with independent power producers (IPPs) highlights the critical need for immediate intervention to prevent further economic damage.
Without such reforms, Tanveer warned, Pakistan could see export orders worth an estimated $5 billion vanish, a loss that would devastate key industries and ripple across the national economy.
As the Federation of Chambers of Commerce and Industry continues its active lobbying for energy policy reform, the need to address the high cost of electricity is more pressing than ever.
Tanveer emphasized that these exorbitant costs are compounded by broader economic challenges, notably the country’s inflation rate, which currently stands at 11 percent.
This economic strain has only intensified the hardships faced by manufacturers, who are struggling to maintain profitability in an increasingly hostile financial environment.
Adding to the burden, Tanveer criticized the central bank’s decision to maintain a high-interest rate of 19.5 percent, a figure he argued is disproportionately high given the inflation rate.
He expressed deep concern over the impact of such policies on businesses, stating, “The current interest rate is unjustifiable when compared to the inflation rate. Factories cannot sustain operations under such high borrowing costs and expensive electricity.”
According to Tanveer, this combination of high interest rates and steep energy costs is pushing businesses to the brink, threatening their ability to compete both locally and internationally.
The urgent need for policy reforms was a central theme of Tanveer’s address. He called on government officials and energy producers to engage directly with industry stakeholders to develop practical solutions that would relieve the financial pressures on factories.
The stakes, he warned, could not be higher, as the continued shutdown of manufacturing facilities would have catastrophic consequences not only for the industry but for Pakistan’s broader economic health.
Tanveer’s warnings highlight a critical juncture for Pakistan’s economy, as the manufacturing sector, particularly in Faisalabad, faces challenges that could derail the country’s economic progress.
The Federation of Chambers of Commerce and Industry remains steadfast in its advocacy for lower electricity costs, but without swift action, the risk of widespread economic fallout grows by the day.
As Pakistan grapples with these challenges, the plight of Faisalabad’s factories serves as a stark reminder of the urgent need for reform.
The road ahead requires decisive action from both the government and industry leaders to safeguard the future of the manufacturing sector and, by extension, the economic stability of the nation.
