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By Merit Ibe
The Manufacturers Association of Nigeria (MAN) has expressed concern over the electricity tariff skyrocketing beyond the present high prices from July 1.
The association lamented that a 40 per cent hike at this time was outrageous, noting that the absence of stable, effective and fairly priced electricity supply in Nigeria has been a long-standing challenge for manufacturers.
Director General of MAN, Segun Ajayi-Kadir, who made the remarks, said it was a worrisome development which has compelled many manufacturing industries to supplement the unreliable electricity supply with alternative energy sources.
“Regrettably, the available alternative energy sources such as diesel have become exorbitantly expensive. On average, surveyed data by MAN suggests that manufacturers spent at least N144.5bn on sourcing alternative energy in 2022, up from N77.22bn in 2021. This translates to about 87 per cent increase in the cost of access to alternative energy sources by manufacturers within a year. In the last eight years, electricity tariff has been increased by 186 per cent. The fact that government itself is owing N75billion in unpaid electricity bill is indicative of how burdensome the cost of electricity has become,” he said.
Reeling out the implications of the higher electricity tariff on manufacturers, he said the hike would increase the cost of production for manufacturers; erode the profit margin and reduce their ability to expand operations and create new jobs; decrease the revenue collectable by government; add more cost to the consumers: cause recession of manufacturing activities; and worsen sector’s competitiveness. He added that high probability of outward investment will be witnessed.
He said the Federal Government and NERC should ensure improvement in electricity generation, transmission and distribution that will lead to adequate and reliable electricity supply in the country, rather than increasing the tariff on the mere 4000MW to meet all revenue needs of stakeholders in the electricity supply chain.
“Government should ensure that at least 90 per cent of electricity consumers are metered to ensure consumption reflective electricity bill payment, formulate electricity policies that will aid investment in energy industry to increase generation capacities that will usher in large scale production of electricity and ensure effective implementation of the recent Electricity Act (2023) that is aimed at increasing the electricity supply in the country,” he stated.
