Ask Nigeria Header Logo

MAN decries 40% electricity tariff hike

Photo of author

By Abraham Adekunle

Association claims FG has increased price by 186% in 8 years on same 4000MW.

After the removal of fuel subsidy, which brought about more than a hundred percent increase in the price of goods and services, the Federal Government of Nigeria is set to increase electricity tariff by 40 percent come July 1, 2023. The Manufacturers Association of Nigeria (MAN) has described the proposed hike as outrageous and perilous. This development is one of the many that have brought sadness to Nigerians and will see the price of goods and services increase yet again.

In the aftermath of the fuel subsidy removal, the price of transport services in the country took the first hit. Commercial bus drivers have now set their price as double the amount that was previously enjoyed by the masses. Since Nigeria’s electricity supply is not as efficient the populace expects, producers and manufacturers have to resort to alternative sources of energy, usually fossil fuels such as Premium Motor Spirit (PMS) and diesel. It contributed to the increased price of staple foods, which have to be brought to the market from the farm, using vehicles that run on these fuels.

Increase in tariff will only compound the problem.

This is why MAN’s leadership has released a press statement highlighting the consequences of the proposed increase as well as admonishing the government to reassess the decision for the good of the citizens. The association has noted that the government had increased electricity tariff by at least 186 percent in the past eight years. Ironically, what MAN expects (that electricity generation and distribution be improved) has shown no sign of happening. The organization expects that the government and the Nigerian Electricity Regulatory Commission (NERC) to ensure improvement in electricity generation, transmission and distribution that will lead to adequate and reliable electricity supply in the country, rather than increasing the tariff on the mere 4000MW.

The manufacturers association expressed these views in a press statement titled, “Possible Impact of Impending Electricity Tariff Hike on Manufacturers.” One of such impacts is that productivity in the country will be affected. The decision will lead to the rise in cost of production, reduction in manufacturers’ profit margin, and potential decline in government’s revenue. In economic terms, the implementation of this proposed tariff will complicate the inflationary pressure on the economy, accelerate the recession in the manufacturing sector, and hurt the competitiveness that manufacturing firms should have in a free market economy.

Manufacturing firms may relocate to another favorable African country.

As it is the case of one successful rice farmer in the northern region of Nigeria, Mr. Williams, who has since planned to relocate his rice farming to other African countries due to insecurity, increase in cost of production may push other firms in the manufacturing industry to relocate to other countries. This was what essentially happened in 2016 barely a year into former President Buhari’s administration. According to the National Bureau of Statistics (NBS) in August 2016, the Nigerian economy slid into a recession in the second quarter.

Many manufacturing firms relocated to other African countries while some just closed up in Africa. The reason behind such decision lies in the fact that the business environment was not favorable and there was increase in cost of production, one of which was in electricity and alternative sources of energy. Presently, the proposed increase in the price of electricity will drive u the cost of manufacturing goods. The chain of distribution will effectively pass on that cost to the final consumer, thereby reducing the purchasing power of the masses.

Cost of alternative energy sources increasing yearly.

According to the director-general of MAN, Mr. Segun Ajayi-Kadir, the absence of a stable, effective and fairly priced electricity supply in Nigeria has been a long-standing challenge for manufacturers. The worrisome outcome is that the industry has been compelled to supplement the unreliable electricity from alternative sources, which have become quite expensive. Survey data by MAN showed that at least N144.5 billion was spent on sourcing alternative energy in 2022, from the N77.22 billion in 2021. This is at least a 100 percent rise year-on-year.


Related Link

Wikipedia: Website


The content on AskNigeria.com is given for general information only and does not constitute a professional opinion, and users should seek their own legal/professional advice. There is data available online that lists details, facts and further information not listed in this post, please complete your own investigation into these matters and reach your own conclusion. AskNigeria.com accepts no responsibility for losses from any person acting or refraining from acting as a result of content contained in this website and/or other websites which may be linked to this website.

Fact Checking Tool - Snopes.com

0 0 votes
Rate This Article
9 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Ask Nigeria
Admin
5 months ago

MAN decries 40% electricity tariff hikeAssociation claims FG has increased price by 186% in 8 years on same 4000MW.  – Express your point of view.

Iyanu12345ogg
Iyanu12345ogg
Member
5 months ago

The 40% electricity tariff hike is ill-timed and may further exacerbate the challenges faced by the manufacturing sector and the economy as a whole. The Federal Government must work towards providing viable solutions to the challenges faced by the power sector to ensure sustainable electricity supply at reasonable rates.

Abusi
Abusi
Member
5 months ago

The increase in electricity tariff is to much for the people to bear. We really need the government to be more considerate and help us salvage this unfortunate situation we find ourselves in.

Taiwoo
Taiwoo
Member
5 months ago

The electricity Tarrif is too much which will be hard on people when the Tarrif have not been increased people are trying hard to afford it but now there is increasement it will not be easy the government should do something to it

Kazeem1
Kazeem1
Member
5 months ago

The 40% increase in electricity rates is untimely and might make the country face problems we are paying for the electricity we are not enjoying it been increased again how sure that we will enjoy the electricity since the Tarrif is been increased high again

Christiana
Christiana
Member
5 months ago

Government are just adding the woes we are experiencing in Nigeria. Upon all the policy that don’t goes well with us they have hiked electricity tariff again. At least they should be considerate to put to gap before it follows.

Haykaylyon26
Haykaylyon26
Member
5 months ago

People cannot endure the increase in electricity prices. We definitely urge the government to show more consideration and assist us in resolving this sad circumstance,

DimOla
DimOla
Member
5 months ago

The Manufacturing Association of Nigeria have well spoken. If the tariff on electricity is increased 40% then the o prices of commodities in the market will go up creating an additional g hardship in the country. Over the pass eight years the FG increase the tariff of electricity with no significant improvement. The whole situation only grew worst with the national grid collapsing often. I believe the problems that Electricity Regulatory Commission (NERC) should be trying to resolve now should be how to rid the system of corrupt practices eating deep into power sector which has prevented improved power production. If the 40% tariff is implemented the country predicament will only grow worst because already subsidy removal is causing server hardship.

SarahDiv
SarahDiv
Member
5 months ago

For the pass eight years the tariff in power sector has experience significant increase by 186% with no improvement in the power sector. Now the the power sector is planning to increase it by 40% again ,I am so sorry for this country, it will lead to more inflation and hardship in the land. As spoken by Manufacturing Association of Nigeria that if the tariff on electricity goes up the cost of production will also go up. Already, subsidy has been remove which has increase the suffering of Nigerians, if this is added to it will further compound the whole situations. It is well with this country.