In recent developments in Nigeria, the government has announced a nationwide increase in electricity tariff by 40%. This decision has raised concerns about its potential negative impact on the standard of living for the general population. The tariff hike is set to take effect from July 1st, coming just over a month after the removal of subsidy on Premium Motor Spirit (PMS), commonly known as petrol, which caused significant turmoil in the country. The Nigerian Electricity Regulatory Commission (NERC) attributed the tariff adjustment to fluctuating exchange rates.

The Manufacturers Association of Nigeria (MAN) has strongly opposed the increase, stating that the sector already faces challenges in competitiveness due to high electricity generation costs and other factors. They highlighted that electricity tariffs had risen by 186% over the past eight years under the previous administration. In an interview with ARISE NEWS, the President of MAN, Otunba Francis Meshioye, expressed concern that energy expenses accounted for 30% of industry revenues, leading to high operating costs and reduced competitiveness.

Meshioye emphasized that manufacturers had not specifically requested any subsidies in the past, but rather sought price stability over time. The sudden tariff increase, which occurred without agreement, resulted in outstanding debts to the electricity distribution companies (DisCos). Meshioye called on the government to prevent these costs from being passed on to manufacturers, labeling the increase as unjustifiable and claiming that it perpetuated a pattern of intimidation towards businesses.

As a solution to address the imbalance, the MAN president proposed allocating special rates to manufacturing companies and privatizing electricity distribution companies to help them cope with the tariff hike. This, he argued, would attract investors and foster competition. Meshioye also stressed the importance of metering every consumer, ensuring efficient systems, encouraging alternative power sources, and adhering to a consultative road map for tariff adjustments.

In addition to the electricity tariff increase, Meshioye highlighted multiple taxation from various levels of government, including state and local authorities, as well as challenges related to logistics, such as delays at ports, ineffective transportation systems, and excessively high interest rates. These factors further hinder the growth and expansion of the manufacturing sector.