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JUST IN: Manufacturers Rejects 40% Electricity Tariff Hike on Mere 4000MW

Published

3 years ago

June 23, 2023

339 Views

The Manufacturers Association of Nigeria (MAN) has rejected the planned 40 percent hike in electricity tariff, which will become effective from July 1, calling on the government to shelve the increase until electricity generation , transmission and supply improves in the country.

The Nigerian Electricity Regulatory Commission (NERC), had said that the current tariff increase is based on the Service Based Tariff, SBT, benchmarked on an exchange rate of N441/$ and inflation of 16.97 per cent.

It argued that since the value of the naira to the dollar now hovers above N700 and current rate of inflation at 22.45 percent, it is necessary to increase tariff to mitigate operators’ cost of operations.
However, MAN, in its reaction, that beyond the present embattling high prices, starting July a 40 percent hike at this time is simply outrageous.
Segun Ajayi-Kadir, the Director-General of MAN, said that the expectation of the manufacturers is that the Federal Government and the NERC will 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 to meet all revenue needs of stakeholders in the electricity supply industry.

” Government should ensure that at least 90 percent of electricity consumers are metered to ensure consumption reflective electricity bill payment, formulate electricity policies that will aid investment in energy industry to increase generation capacities that will usher in large scale production of electricity and ensure effective implementation of the recent Electricity Act (2023) that is aimed at increasing the electricity supply in the country,” he said.

The Association urges NERC to
▪︎ Eradicate outrageous bills by closing the metering gap through the liberalization of ultimate users’ access to effective mass metering;

▪︎Ensure the connection of all consumers to the electricity grid to avoid free riding and unfair charges on the few connected consumers;

▪︎ Work on efforts to increase the electricity supply base in order to distribute the total cost among a high number of consumers at a much lower unit cost;
▪︎ States and private investors should rise up to the challenge by taking advantage of the Electricity Act 2023 to eradicate the energy poverty of their people.

Likely Effects of Tariff Hike On Manufacturing industries
As a matter of fact, a further rise in electricity tariff could lead to the following:

i. Costs of production will soar: Higher electricity tariff will directly increase the cost of production for manufacturers. Already, we have energy constituting between 28-40% in the cost structure of manufacturing industries.
You can imagine the impact on manufacturing industries that are energy-intensive such as metal processing, heavy machinery, and chemicals manufacturing.

ii. Profit margins will reduce: A spike in the electricity tariff will erode the profit margin of the manufacturers and reduce their ability to expand operations and create new jobs

iii. High probability of activities paralysis: This is a definite possibility among small and medium-sized enterprises (SMEs) who are unable to accommodate the higher price.

iv. Potential decrease in the revenue collectable by government: The hike in electricity tariff will reduce the manufacturers’ profitability and by extension the quantum of taxes and fees payable to the three tiers of Government. Manufacturers remain the largest income taxpayer in the country. Therefore, in the event of poor income generation due to high costs of production, the government purse will suffer.

v. Manufacturers will ultimately pass on the additional cost to the consumers of their products: This will increase the cost of local made products in the market and complicate the rising inflation rate in the country.

vi. Recession of manufacturing activities: An increase in electricity tariff will reduce the purchasing capability. One of the resulting effects is the fall in demand and recession of manufacturing activities over time.

vii. The sector’s competitiveness will definitely worsen: The high cost of the products will make locally produced items less competitive, when compared with imported alternatives.
This is also true of exports, as Nigeria products may find it more difficult to penetrate foreign markets. Such a move will restrict our exports earnings because it will be impossible to compete with counterparts in the global trading environment.

viii. High probability of outward investment. Some manufacturing industries may consider shifting production to other economies with lower electricity tariffs and guaranteed availability.

Related Topics:Electricity Tariff Hike Manufacturers

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NDIC Seeks Court Approval For Liquidation of 89 Defunct MFBs, PMBs Nationwide

The affected institutions are largely microfinance banks operating across multiple states, including Lagos, Anambra, Ogun, Osun, Ondo, Akwa Ibom, Oyo, FCT, Kaduna, Delta, Edo and Kano.

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The Nigeria Deposit Insurance Corporation (NDIC) has commenced the process of concluding the liquidation of 89 microfinance banks (MFBs) and primary mortgage banks (PMBs) whose licences were revoked.

The affected institutions are largely microfinance banks operating across multiple states, including Lagos, Anambra, Ogun, Osun, Ondo, Akwa Ibom, Oyo, FCT, Kaduna, Delta, Edo and Kano, reflecting the spread of small-scale lenders within the financial system.‎

‎The development follows the revocation of licences of 179 MFBs and four PMBs by the Central Bank of Nigeria (CBN) in May 2023, after which selected institutions acquired the assets and liabilities of 89 of the defunct banks under a purchase and assumption arrangement.

‎Under the arrangement, new operators were issued licences to take over the operations of the affected institutions, which have since resumed business under different names across several states.‎

The NDIC said it would, in its capacity as liquidator, approach the Federal High Court to obtain orders for the dissolution of the defunct banks and its discharge as liquidator, in line with its enabling law and other relevant provisions.‎‎

The move signals the conclusion of a resolution process initiated after the regulatory action taken in 2023, with the transfer of assets and liabilities already completed and successor institutions in operation.

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Dangote exported 434m litres petrol in March – NMDPRA

A breakdown of the figures showed that the refinery produced an average of 48.2 million litres of petrol per day, translating to 1.49 billion litres for the 31-day period. Of this volume, 34.2 million litres per day, totalling 1.06 billion litres, was supplied locally.

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• Dangote Petroleum Refinery / Credit: Instagram

The Dangote Petroleum Refinery exported about 434 million litres of Premium Motor Spirit (petrol) in March 2026.

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The export of excess petrol reflects a major shift in Nigeria’s downstream sector, which has historically depended on imports to meet local demand. This development was further confirmed in a statement issued by the refinery earlier this week.It stated that, “Nigeria recorded a historic shift in its downstream petroleum trade in March, emerging as a net exporter of gasoline for the first time, driven largely by rising output from the Dangote Petroleum Refinery & Petrochemicals.

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Nigeria Unveils 20-Year Aviation Master Plan at ICAO Global Symposium In Morocco

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2 days ago

April 15, 2026

Charles Flames

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The Master Plan focuses on critical pillars including infrastructure modernization, adoption of advanced technologies such as unmanned aerial systems, and strict adherence to global safety and security standards to achieve a zero-fatality aviation environment.

It also envisions the transformation of Nigerian airports into aerotropolis hubs to boost economic growth, job creation, and connectivity.

Additionally, the plan emphasizes sustainability, innovation, and private sector participation, particularly in areas such as Maintenance, Repair and Overhaul facilities and cargo development, while aligning Nigeria’s aviation growth with global environmental standards.

The presentation of the CAMP at the ICAO symposium highlights Nigeria’s commitment to international best practices and its rising profile in global aviation development.