The Manufacturers Association of Nigeria (MAN) has raised alarm over the severe consequences of the recent hike in electricity tariffs, which has led to the closure of more than 300 companies and resulted in the loss of 380,000 jobs within the past two months.
Speaking at an investigative hearing in Abuja organized by the Joint Committees on Power, Commerce, National Planning & Economic Development, and Delegated Legislations, Senator Ahmed Abdulkadir highlighted the gravity of the situation. He pointed out that electricity-related expenses account for about 40% of the production overheads for manufacturing companies. Abdulkadir emphasized the urgent need for the current administration to address the escalating insecurity and high costs of doing business, which are exacerbated by the steep increase in electricity tariffs.
He further illustrated the impact by citing an example of a company that once employed around 360,000 workers but has now slashed its workforce to about 5,000 due to the prevailing economic conditions. This drastic reduction underscores the critical state of the manufacturing and real sectors of the Nigerian economy.
Senator Abdulkadir also clarified that MAN was only informed of an initial hearing in 2023 regarding a 40% increase in electricity tariffs, not the more than 200% increase that has now been imposed. This significant hike affects 15% of the Nigerian Electricity Regulatory Commission’s (NERC) customers, including major economic stakeholders.
Contrary to NERC’s claims, the supplementary order issued on April 3, 2024, which raised the electricity tariff from N68 to N225 per kilowatt-hour, was not adequately communicated to the public. This lack of transparency has contributed to the confusion and economic strain currently facing the manufacturing sector, according to Senator Abdulkadir.