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Merit Ibe
Nigeria’s Organised Private Sector (OPS), has called for suspension of the proposed increase in electricity tariff by the Nigerian Electricity Regulatory Commission (NERC) in the best interest of the Nigerian economy.
The organised sector made its position known in a statement, saying the proposed increase was not business friendly, and would have a catastrophic impact on the real sector.
The sector posited that if even if the current electricity tariff cannot be reduced, it should not be increased, adding that any increase in tariff will reinforce the already high cost of doing business for the Private Sector and further depress productivity in the manufacturing sector.
OPS advised that government, being a major stakeholder in the electricity industry should concentrate on developing processes and polices to attract significant investment to encourage scale generation with improved transmission and distribution infrastructure in the industry.
“Evolution of a more realistic tariff structure that will support the growth of the sector is very critical at the moment.
“Government should review the privatisation/unbundling of the electricity industry in the best interest of the over 200 million Nigerians.”
OPS appreciated the efforts of the NERC to ensure and sustain improvement in electricity supply and seamless operations of the Nigerian Electricity Supply Industry (NESI) for the benefit of the country as a whole and private businesses.
These efforts, according to the sector are reflected in a number of regulatory interventions to ensure that stakeholders operate in line with the set guidelines.
The sector noted that improvement in electricity supply in terms of tariff, quantity, quality, reliability and efficiency in service delivery is critical to the growth and development of private sector businesses, especially manufacturing.
“This is the major reason why the OPSN has followed with keen interest, all recent developments relating to issues of electricity supply, particularly the desire to put in place a cost-effective electricity tariff in the industry.”
Noting that private business operators in Nigeria, especially the manufacturing sector are already plagued by high cost operating environment arising from poor regulatory environment, macroeconomic asymmetries and high cost of energy, the sector specifically pointed out that the unfriendly operating environment is responsible for the oscillatory performance of the sector in the past few years.
“For instance, Electricity outages averages about 10 hours per day, electricity expenses still constitute about 40per cent of total cost of production and the average cost of self-generated electricity averages N119 billion in 2019 alone. Most worrisome is the fact that operators in the private sector, especially the manufacturing sector bear the burden of commercial and technical losses through very high monthly electricity bill that is largely estimated.”
