The Manufacturers Association of Nigeria,MAN, has expressed deep concern over the incessant increase in electricity tariff in the country. 

Highlighting the importance of electricity as a critical input in the manufacturing processes, and its significant impact on production cost and prices of products, MAN expressed worry that incessant increase in electricity tariff in Nigeria is hindering the performance of the sector and growth of the economy.

According to the association, no nation can attain significant industrial development without energy security, which is timely access to sustainable and cost-effective energy while maintaining that sustainable and low-cost energy supply provide incentives for scale production and competitiveness of the industrial sector.

It further notes that it was based on the critical importance of energy security in achieving the industrial aspiration of Nigeria, that the Power Sector was privatized in 2013 to improve the scale of energy supply to the nation, particularly the industries.

Regrettably however, MAN insists that this particular privatization has not yielded the desired results. It is widely believed that this is because the operators in the value chain lack the technical and financial capacity to operate and deliver optimally. The installed capacity has been consistently put around 10,000MW and it has not been fully utilized due to the limited capacity of the GenCos and DisCos to generate and distribute adequate electricity supply nationwide.

MAN in a statement to the press, signed by the Director General, Segun Ajayi- Kadir, mni, notes that despite the inability to meet the consumer demand, we have witnessed consistent increase in tariff without a commensurate and good quality supply. According to NBS, the electricity supply stood at 5,909.83 (Gwh) in Q2 2023 but reduced to 5,769.52 (Gwh) in Q1 2024 and 5,612.52 (Gwh) in Q2 2024 when the tariff increase of over 230 percent was implemented. Thus, indicating 5.03 percent decrease year on year and 2.72 percent quarter on quarter.

MAN further revealed that it has severally advocated the increase in electricity supply from the abysmal average of 4,000MW of electricity per day for over 200 million people whereas Nigeria needs more than 30,000MW of electricity to appreciably meet the growing electricity demands by businesses and households in the country.

The proposed increase in electricity tariff it maintained, is inimical to the competitiveness of Nigerian products and businesses as it will further exacerbate the impact of high cost of production, worsen the current inflationary pressure, aggravate the pressure on the disposable income of the average Nigerian, increase the unsold inventory of manufacturers, erode their profit margin, increase unemployment rate and lead to closure of more private  businesses.

The persistent increase in tariff means that consumers will continue to bear the brunt of the inefficiency in the electricity value chain. As it stands, manufacturers are disadvantaged as the increase cannot be transferred to consumers who are currently battling with low purchasing power.

Commenting further, Segun Kadiri said “I am not certain that the Federal Government has reached the conclusion that electricity tariff would be increased. I hope not. The advice would be that Government should commission a review of the performance of the DisCos after the last unwarranted increase; conduct a study on the impact of the increase on the manufacturing sector in particular, and businesses and households in general; sincerely and critically interrogate the so-called cost reflective tariff template of the DisCos, and audit their level of commitment to investment in distribution infrastructure.”

The Manufacturers Association of Nigeria is the premier advocacy voice of Manufacturers that promotes Manufacturing sector competitiveness, job Creation, and Gross Domestic Product through commitment to research development of new technologies and environmental sustainability in Nigeria.

The Association was founded in 1971 as a company limited by guarantee, is known for its promotion of made in Nigeria products as a catalyst for industrialization and economic prosperity in Nigeria.