The Manufacturers Association of Nigeria (MAN) has expressed concern over the persistent increase in electricity tariffs, stating that it hinders the performance of the manufacturing sector and the growth of the economy.
Segun Ajayi-Kadir, Director-General of MAN, emphasized that electricity is a critical input in manufacturing processes and has a significant impact on production costs and prices of products.
He noted that no nation can achieve significant industrial development without energy security, which is timely access to sustainable and cost-effective energy.
Ajayi-Kadir noted that despite the privatization of the power sector in 2013, the desired results have not been achieved. He attributed this to the lack of technical and financial capacity of operators in the value chain.
The Director-General pointed out that the installed capacity of 10,000MW has not been fully utilized due to the limited capacity of generation and distribution companies, adding that espite this, there have been consistent increases in tariffs without a commensurate improvement in the quality of supply.
According to the National Bureau of Statistics (NBS), electricity supply decreased from 5,909.83GWh in Q2 2023 to 5,612.52GWh in Q2 2024, despite a tariff increase of over 230%.
MAN has advocated for an increase in electricity supply to meet the growing demands of businesses and households.
The association has stressed that Nigeria needs more than 30,000MW of electricity to appreciably meet the growing electricity demands.
Ajayi-Kadir warned that the proposed increase in electricity tariff would exacerbate the impact of high production costs, worsen inflationary pressures, and lead to business closures.
He urged the Federal Government to review the performance of the distribution companies, conduct a study on the impact of the tariff increase, and audit the level of commitment to investment in distribution infrastructure.
The Director-General emphasized that the persistent increase in tariffs means that consumers will continue to bear the brunt of the inefficiency in the electricity value chain.
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