- The Manufacturers Association of Nigeria (MAN) highlights that electricity costs exceed 35% of manufacturing expenses, calling for government intervention on tariffs.
- The African Finance Corporation says interests in generators hinder power supply improvements, urging reforms before investments.
The Manufacturers Association of Nigeria (MAN) has emphasized that high energy costs continue to pose a significant challenge for the country’s manufacturing sector, with electricity expenses accounting for over 35% of manufacturers’ total costs.
During the 4th Adeola Odutola Lecture and the Presidential Luncheon concluding MAN’s 52nd Annual General Meeting (AGM), MAN President Francis Meshioye urged the federal government to intervene in the ongoing tariff dispute between manufacturers and Nigeria’s electricity distribution companies (DisCos).
Meshioye expressed concerns over the persistent disconnections of manufacturing facilities from the national grid despite timely payments of current electricity charges. He criticized the frequent hikes in electricity tariffs, which he said exacerbate the difficulties faced by manufacturers.
“Manufacturers are struggling with rates that have increased by over 100%,” he stated, calling for government action to address the situation and foster a more conducive environment for the manufacturing sector.
The lecture’s keynote speaker, Samaila Zubairu, President of the African Finance Corporation (AFC), pointed to the influence of interest groups that benefit from the sale of generators and diesel, suggesting they hinder efforts to improve the power supply in Nigeria. Represented by Chief Investment Officer Sameh Shenouda, Zubairu advocated for a comprehensive power sector restructuring to attract necessary investments.
He candidly acknowledged the challenges within the sector, including issues with revenue collection and power theft, and stated that AFC would be hesitant to invest until significant reforms were implemented. “There are groups more interested in selling generators than ensuring reliable electricity supply,” he remarked.
Zubairu indicated that while AFC would consider opportunities for investment in direct private power projects, the risks associated with large-scale infrastructure in the un-reformed sector were too high.
Zubairu expressed a willingness to collaborate with the government and stakeholders on restructuring efforts to facilitate future investments in the power sector.