Nigerian Manufacturers Criticise Power Tariff Hikes

  • MAN urges the government to increase Nigeria’s power supply from the current 4,000MW to meet growing demand.
  • Director-General Segun Ajayi-Kadir criticises frequent electricity tariff hikes, stating they harm businesses and the economy.
  • MAN warns that higher tariffs will raise production costs, worsen inflation, and threaten jobs in the manufacturing sector.

The Manufacturers Association of Nigeria (MAN) has urged the government to increase the electricity supply, which currently averages 4,000 megawatts (MW) per day. MAN’s Director-General, Segun Ajayi-Kadir, criticised the proposed tariff hike, stressing that power directly drives manufacturing and impacts production costs.

Ajayi-Kadir criticised frequent electricity tariff hikes, stating they slow down the manufacturing sector and weaken the economy. He emphasised that affordable energy is crucial for boosting industrial output and maintaining global competitiveness.

He explained that the government privatised the power sector in 2013 to improve energy supply, especially for industries. However, privatisation has failed to deliver the expected results. According to Ajayi-Kadir, operators lack the technical and financial capacities to provide consistent electricity nationwide.

Despite Nigeria’s 10,000MW installed capacity, the system cannot fully utilise it. Ajayi-Kadir noted that generation and distribution companies struggle to meet demand. Meanwhile, tariffs keep rising, but supply remains poor, frustrating consumers and businesses alike.

Ajayi-Kadir cited data from the National Bureau of Statistics (NBS), showing a drop in electricity supply. Supply reached 5,909.83 gigawatt hours (GWh) in Q2 2023 but fell to 5,612.52 GWh in Q2 2024 after a tariff increase of over 230%. This marked a 5.03% year-on-year decrease and a 2.72% quarterly decline.

Ajayi-Kadir reiterated MAN’s long-standing call to increase power beyond the current 4,000MW average. With a population of over 200 million, Nigeria needs at least 30,000MW to meet the growing energy demands of households and businesses.

The Director-General warned that the proposed tariff hike would damage Nigerian businesses. Rising production costs would fuel inflation, reduce disposable incomes, and increase unemployment. He also cautioned that more business closures would result, threatening the competitiveness of Nigerian products.

Ajayi-Kadir urged the government to prioritise improving the electricity supply to support industries and boost economic growth.

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