‘It’ll hinder businesses’: MAN condemns electricity tariff hike

The Manufacturers Association of Nigeria (MAN) says frequent increases in electricity tariffs are hindering the performance of the manufacturing sector and the nation’s economic growth.

MAN said any increase in electricity tariff will hinder the competitiveness of Nigerian products and businesses, noting that it will further exacerbate the impact of high cost of production.

The association said this in a statement issued by its Director General, Segun Ajayi-Kadir, on Thursday, February 6, 2025.

Ajayi-Kadir stated: “Electricity is a critical input in manufacturing processes, and it has significant impact on production cost and prices of products.

“Therefore, it goes without saying, that incessant increase in electricity tariff in Nigeria is hindering the performance of the sector and growth of the economy.

“Incidentally, no nation can attain significant industrial development without energy security, which is timely access to sustainable and cost-effective energy.

“Sustainable and low-cost energy supply provide incentives for scale production and competitiveness of the industrial sector.

“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. 

“Unfortunately, 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.

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“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.
“Despite the inability to meet the consumer demand, we have witnessed consistent increase in tariff without a commensurate and good quality supply.”

Ajayi-Kadir noted that MAN has repeatedly called for an increase in electricity supply beyond the average 4,000MW provided daily to over 200 million Nigerians.

The MAN boss stressed that Nigeria requires more than 30,000MW to adequately meet the growing demand from businesses and households.

He, however, urged the government to review the performance of DisCos following the recent tariff increase.

Ajayi-Kadir also called for a study on its impact on the manufacturing sector, businesses, and households.

Ajayi-Kadir equally enjoined the government to critically assess DisCos’ cost-reflective tariff model and audit their investment in distribution infrastructure.

The federal government has, however, debunked reports suggesting an imminent 65 per cent increase in electricity tariff in the country.

The Star