Manufacturers Association of Nigeria (MAN) has warned the Federal Government against embarking on any increase in electricity tariff this year, saying it will be inimical to the competitiveness of Nigerian products and businesses and further exacerbate the impact of the high cost of production, worsen inflationary pressure and lead to further closure of more private businesses.
Also, the Trade Union Congress of Nigeria (TUC) rejected the proposed 65 per cent increase in electricity tariff.
Meanwhile, the Kaduna State Government has intervened in the ongoing industrial dispute between Kaduna Electric and its workers’ union, which resulted in a four-day power outage in the state and the franchise states of the Distribution Company (DisCo).
Pointing out that electricity is a critical input in manufacturing processes with a significant impact on production cost and prices of products, the Director-General of MAN, Segun Ajayi-Kadir, said the incessant increases in electricity tariff were hindering the performance of the sector and growth of the economy.
No nation can attain significant industrial development without energy security, which is timely access to sustainable and cost-effective energy, he said, adding that sustainable and low-cost energy supply provides incentives for scale production and competitiveness of the industrial sector.
According to the DG, it is based on the critical importance of energy security in achieving the industrial aspiration of Nigeria that the power sector was privatised in 2013 to improve the scale of energy supply to the nation, particularly the industries.
He said: “Unfortunately, this privatisation has not yielded any result. 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 at around 10,000 megawatts and it has not been fully utilised due to the limited capacity of the Generation Companies (GenCos) and DisCos to generate and distribute adequate electricity supply nationwide.
“Despite the inability to meet consumer demand, we have witnessed consistent increases in tariff without a commensurate and good quality supply.”
According to the 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 per cent was implemented. Thus, indicating a 5.03 per cent decrease year-on-year and 2.72 per cent quarter-on-quarter.”
Ajayi-Kadir added that MAN had advocated an 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.
Persistent increase in tariff, he said, 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 battling with low purchasing power.”
He advised the government not to entertain any form of increase if they’re still interested in the survival of businesses and rather 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.
He further advised the government to 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.
TUC’s position is contained in a communiqué issued at the end of its Q1 2025 National Administrative Council (NAC) meeting yesterday in Abuja.
Addressing newsmen after the meeting, President of TUC, Festus Osifo, said the NAC, on behalf of the congress, “strongly” condemned the proposed 65 per cent increase in electricity tariff.
He said: “It is alarming that the government is considering this hike when the previous increment has already inflicted severe hardship on citizens.
“This proposed increase is not only ill-timed but also a deliberate act of economic oppression against Nigerians, who are already struggling under unbearable economic conditions.”
THE Deputy Governor, Hadiza Balarabe, hosted a meeting with representatives of the union and the management of Kaduna Electric at Sir Kashim Ibrahim Government House, yesterday, urging them to find a common ground to resolve their differences.
Balarabe pleaded with the union to restore electricity to consumers as soon as possible, noting that the outage hurt all sectors, including homes, businesses and security.
“We implore you to find a way to resolve this dispute quickly. The people of Kaduna are suffering, and we cannot afford to have this outage continue,” she said.
National Vice President (Distribution) of the National Union of Electricity Employees (NUEE), Wisdom Nwachukwu, said the union was not against the downsizing of workers but wants due process to be followed and all entitlements paid.
The Managing Director of Kaduna Electric, Umar Hashidu, explained that the management was looking at the efficiency, progress and sustainability of the company and that 444 workers were laid off.
“We had to take this decision to ensure the survival of the company. We cannot continue to operate at a loss,” Hashidu said
Credit: Guardian.
