The Manufacturers Association of Nigeria (MAN) has stated that the incessant increase in electricity tariff in Nigeria is hurting the performance of the sector and growth of the Nigerian economy.

MAN stated that electricity is a critical input in manufacturing processes, and it has a significant impact on production costs and prices of products.

The director general of MAN, Segun Ajayi-Kadir said: “The proposed increase in electricity tariff is inimical to the competitiveness of Nigerian products and businesses as it will further exacerbate the impact of high cost of production and worsen the current inflationary pressure.

“Sustainable and low-cost energy supply provide incentives for scale production and competitiveness of the industrial sector.

“Unfortunately, this particular privatisation has not yielded the desired results. It is widely believed that this is because the operators in the value chain lack the technical and financial capacity to operate and deliver optimally.

“The installed capacity has been consistently put around 10,000MW and it has not been fully utilised due to the limited capacity of the GenCos and DisCos to generate and distribute adequate electricity supply nationwide.

“MAN has severally advocated for an increase in electricity supply from the abysmal average of 4,000MW of electricity per day for over 200 million people whereas Nigeria needs more than 30,000MW of electricity to appreciably meet the growing electricity demands by businesses and households in the country.

“As it stands, manufacturers are disadvantaged as the increase cannot be transferred to consumers who are currently battling with low purchasing power.

“The advice would be that government should commission a review of the performance of the DisCos after the last unwarranted increase; conduct a study on the impact of the increase on the manufacturing sector in particular, businesses and households in general; sincerely and critically interrogate the so-called cost reflective tariff template of the DisCos, and audit their level of commitment to investment in distribution infrastructure.”