In recent developments within Nigeria, the government declared a nationwide increase in electricity tariff by 40%.
This has put the nation on edge for the fear of negative impacts on the standard of living of the masses.
The increment is said to be effective by the 1st of July, just a little over a month after the removal of subsidy on premium Motor Spirit (PMS) which also sent the nation into a frenzy. This contributed to price-setting of the Nigerian Electricity Regulatory Commission (NERC). On Sunday, the Abuja Electricity Distribution Company (AEDC) announced that they will be increasing tariff prices based on “fluctuating exchange rates”.
However, the Manufacturers Association of Nigeria have come out to express their displeasure and kick against this recent development saying that the sector was uncompetitive due to high prices used to generate electricity amongst other things. They pointed out that in the last 8 years of the previous administration, electricity tariffs had gone up by 186%.
In an interview with ARISE NEWS on Monday, Otunba Francis Meshioye, President of the Manufacturers Association of Nigeria (MAN) stated that energy payments had consumed 30% of revenues brought out of the industry and is going to cause a high cost of performing business within the nation causing a lack of competition.
“There is no special subidy we have asked for in the past that we have not addressed. What we had in the past was to have a price fixed over the period of time. We hve not really cmplained so much about this price. The major thing to access ks that within the period where this price was increased and it was a time where we have not agreed thag the price shouldx be increased. This cost should ot be passed on to the manufacturers.
“It was increased two times before the time.This made them(MAN) have crude debts to the DisCos. This is what we’re telling governent; that this should not be added to our costs because is not what we agreed on.”
Meshioye described the increase as outrageous saying, “This has been an issue over the time. What we have been experiencing is intimidation over our businesses. They will go to our businesses, disconnct the electricity and then nothing will happen.”
As a solution to the imbalance, the MAN presidentasked that ‘special rates’ should be alotted to manufacturing companies as well as privatization of electrical distribution companies to allow them cope with the increase ensuring that this would bring in investors and encourage competition.
”Encourageing private sectors to invest is very key. That will add compeitiveness in the supply value chain of the electricity.
“One, Be sure that you meter everyone and ensure they are connected to the grid. Run an efficient system and encourage competitiveness. Look for alternate source of emitting power.
“Apart efficiency in the supply chain, what manufacturing could do using gas and everything. Let me tell you, we don’t have a special tariff on gas so we enjoy seriously. But you remember that manufactures have even complained to NERC on a couple of things. We have road map on how the tariff should be increased. But you find that NERc will just increase it without consultation and without the due time before this tariff should be increased. So you find haphazard way of
Inceasing the tariff.
“This is unfair. We need to be sure that if we agreed on a road map, you follow that road map”
Asides the electricity tariff increase, the MAN president stated that other factors afftectng the expansion of the sector include multiple taxation from various arms of government at both state and local level who taxing for the same goal; logistics from ports which can cause delays, ineffective transportation systems and “astronomcally high” interest rates.
Glamour Adah
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