Manufacturers raise alarm over rising electricity tariffs
BY MOTOLANI OSENI
The Manufacturers Association of Nigeria (MAN) has decried the persistent increase in electricity tariffs, warning that it is crippling the country’s manufacturing sector.
MAN Director General, Dr. Segun Ajayi-Kadir, said the frequent tariff hikes imposed by electricity distribution companies are worsening production costs and hindering industrial growth.
Ajayi-Kadir stressed that electricity is a crucial factor in manufacturing, and the lack of affordable and reliable energy supply is detrimental to the sector’s survival. He argued that no nation can achieve sustainable industrial development without energy security, which provides the foundation for large-scale production and competitiveness.
He warned that the proposed tariff increase would further push up production costs, intensify inflationary pressures, erode manufacturers’ profit margins, and force more businesses to shut down.
According to him, the privatisation of the power sector in 2013 was meant to boost electricity generation and supply, but it has failed to deliver on its objectives.
He criticised power generation and distribution companies for lacking the technical and financial capacity to meet national electricity demands. Despite an installed generation capacity of about 10,000 megawatts, power supply has remained stagnant at an average of 4,000 to 5,000 megawatts per day, while electricity tariffs have surged by over 200 per cent in the past year.
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Ajayi-Kadir urged the government to reconsider any plans for additional tariff increases, arguing that consumers should not bear the cost of inefficiencies in the electricity supply chain. He noted that manufacturers are already struggling with high production costs and cannot afford to pass on additional expenses to consumers who are grappling with low purchasing power.
Recent reports indicate that Nigeria’s manufacturing sector performed poorly last year, with 1.4 million unsold inventories, largely due to rising energy costs and macroeconomic challenges such as high inflation, currency depreciation, and multiple taxation. While the Federal Government has assured that it is not considering another tariff hike, concerns remain within the manufacturing sector over the continued economic strain caused by erratic and expensive power supply.
