The Organised Private Sector of Nigeria (OPSN), made up of top Business Membership Organisations (BMOs) representing over 5 million businesses in Nigeria, has called for the suspension of the recent 200% electricity tariff hike announced by the Nigerian Electricity Regulatory Commission (NERC).
The OPSN, consisting of MAN, NACCIMA, NECA, NASSI, and NASME, issued a statement expressing concerns over the threat to business survival posed by the sudden increase in electricity tariffs.
They emphasized the need for meaningful dialogue among stakeholders to review the process and methodology of determining electricity tariffs and establish a transparent mechanism for setting tariffs.
The OPSN highlighted the negative impact of the tariff hike on the competitiveness of Nigerian products and businesses, especially in light of inadequate electricity supply.
They pointed out that the increase does not align with the MYTO Order and fails to consider the current exchange rate reality, which has seen the Naira appreciate significantly against the dollar.
A comparison of electricity costs in Nigeria with other countries like the USA, UK, Germany, and China revealed that Nigeria now ranks third in terms of high electricity costs.
The OPSN warned that the excessive tariff hike, coupled with macroeconomic instability and infrastructure deficits, could lead to the closure of over 65% of private businesses, particularly in the manufacturing sector and small and medium enterprises (SMEs).
The OPSN urged the government to reconsider the tariff hike, as it would have negative trickle-down effects, worsen inflation, reduce disposable income, and exacerbate unemployment and insecurity in the country.
They acknowledged the government’s efforts to stabilize the economy and enhance human capital development but stressed the need for policies that support business survival and economic growth.
The OPSN restated its call for suspension of the electricity tariff hike and emphasized the importance of collaborative efforts to address the challenges facing the private sector in Nigeria.
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