The Manufacturers Association of Nigeria (MAN) has voiced its strong disapproval of the recent 250% increase in electricity tariffs, labeling it illogical and detrimental to the manufacturing sector. MAN President, Francis Meshioye, stressed the need for a more gradual approach to tariff adjustments, advocating for a roundtable discussion to negotiate a more manageable increase. He criticized the government’s apparent lack of responsiveness to MAN’s concerns and vowed to continue advocating for a tariff reduction. The sharp rise in electricity costs, according to MAN, places an undue burden on manufacturers, hindering their productivity and competitiveness. The association believes the current tariff hike is not justified and calls for a more structured and considerate approach to tariff adjustments that considers the impact on businesses.
MAN’s Director-General, Segun Ajayi-Kadir, detailed the association’s unsuccessful legal and administrative efforts to challenge the tariff increase. Despite petitioning the Nigerian Electricity Regulatory Commission (NERC) and seeking court intervention, manufacturers continued to face disconnections. Ajayi-Kadir lamented what he described as a “political judgement” that dismissed MAN’s case and vacated the injunction against disconnections. He highlighted the chronic unreliability of the national grid, referring to it as a “permanent decimal” and noting that alternative energy sources now contribute more power than the grid itself. Ajayi-Kadir questioned the logic of funding what he perceives as inefficiency in the power sector, arguing that increasing tariffs without addressing underlying issues is counterproductive.
The unreliability of the national grid is a major concern for manufacturers, with frequent collapses disrupting production and increasing costs. Ajayi-Kadir revealed that last year alone, the national grid experienced 12 collapses, further emphasizing the inadequacy of the current power infrastructure. He questioned the rationale of increasing tariffs without addressing the root causes of the power sector’s instability, viewing it as funding incompetence rather than improving service delivery. The reliance on alternative energy sources, despite their higher costs, underscores the severity of the grid’s unreliability and the urgent need for comprehensive reforms in the power sector.
Addressing the issue of GDP rebasing, Ajayi-Kadir acknowledged the importance of accurate economic valuation but cautioned against the inclusion of illicit activities like smuggling and kidnapping. He warned that incorporating such activities could inadvertently legitimize them and potentially mask the true extent of the country’s economic challenges. While supporting the principle of rebasing, he emphasized the need for a transparent and credible process, urging against its politicization. MAN has pledged to collaborate with the National Bureau of Statistics (NBS) to ensure the rebasing exercise is conducted rigorously and yields accurate data. This collaboration aims to ensure the rebasing process reflects the genuine state of the Nigerian economy, avoiding any misrepresentations that could arise from including illicit activities.
MAN emphasizes the crucial role of accurate data in guiding policy decisions and fostering economic stability. The association believes that a credible and comprehensive rebasing exercise is essential for understanding the true strengths and weaknesses of the Nigerian economy. This, in turn, will enable policymakers to develop effective strategies for sustainable growth and development. By collaborating with the NBS, MAN aims to contribute to a rebasing process that provides a reliable and accurate picture of the Nigerian economy, free from political influence and manipulation.
The association’s commitment to advocating for lower electricity tariffs, addressing the challenges of the national grid, and ensuring a transparent GDP rebasing process reflects its commitment to fostering a conducive environment for manufacturing in Nigeria. MAN believes that these issues are critical for the growth and competitiveness of the manufacturing sector, which plays a vital role in the country’s economic development. By engaging with the government and relevant agencies, MAN seeks to contribute to policy reforms that support industrial growth and create a more sustainable economic future for Nigeria. The association emphasizes the importance of data-driven decision-making and advocates for policies that address the real challenges faced by businesses in the country.
