Business

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

Published

3 years ago

June 23, 2023

318 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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Crude Oil Prices Drop Below $95 After US-Iran Ceasefire

Earlier, crude prices had surged above $110 per barrel amid fears of supply disruptions as tensions escalated in the Middle East.

Published

14 hours ago

April 8, 2026

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Crude oil prices fell below $95 per barrel in early trading on Wednesday following a ceasefire agreement between the United States and Iran.

The global oil benchmark fell by about 13% to around $94–$95 per barrel, marking one of the steepest single-day declines in recent years after weeks of war-driven price spikes.

The dramatic selloff came after U.S. President Donald Trump announced a conditional two-week ceasefire, pausing military operations in exchange for the reopening of the Strait of Hormuz—a critical route for global oil shipments.

West Texas Intermediate (WTI), the U.S. benchmark, also dropped significantly to around $95–$96 per barrel, reflecting a broad easing of geopolitical tensions and a rapid unwinding of the war risk premium in oil markets.

Earlier, crude prices had surged above $110 per barrel amid fears of supply disruptions as tensions escalated in the Middle East.

However, the ceasefire has restored some confidence that oil flows will resume, triggering a sharp correction in prices.

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Afreximbank Avails US$10 billion to insulate African Energy Producers , Exporters from Gulf Crisis

GCRP is designed to, among others sustain essential imports – including fuel, LNG, food, fertiliser, pharmaceuticals – by providing vital short-term Foreign Exchange (FX) and liquidity to support vulnerable member states.

Published

2 days ago

April 7, 2026

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Dr. George Elombi, President and Chairman of the Board of Directors at Afreximbank on Tuesday commended members of the Board for their approval of a US$10 billion Gulf Crisis Response Programme (GCRP) to insulate African and Caribbean economies.

” This crisis response programme is in tune with our DNA. We understand how our economies work and the pain points associated with these transitory crises,” said Elombi.

He emphasised that the intervention will support African countries in adjusting smoothly to the crisis while strengthening their resilience to future shocks through interventions that transform the structure of their economies.

The conflict, which escalated on 28 February 2026, has sent shockwaves through the global economy, with African and Caribbean economies bearing the largest share of the brunt.

Given the significance of the Gulf region as a primary global source of oil, Liquid Nitrogen Gas (LNG), fertilisers, as well as the critical role of the Strait of Hormuz, the outbreak has triggered wider repercussions at a global scale, including adversely affecting African and CARICOM economies.

These impacts specifically affect nations that heavily rely on fuel, fertiliser, and food imports, alongside those exposed to Gulf shipping corridors, investment flows, tourism and remittance inflows.

It further aims to empower African energy and minerals exporters to capitalise on elevated prices and rerouted trade flows, by scaling productive capacity in strategic commodities, through pre-export finance, working capital, and inventory financing.

Additionally, it provides short term relief to African and Caribbean member states whose tourism and aviation industries have been adversely impacted by the crisis.

The programme is also designed to build the medium to long-term resilience of African and Caribbean economies against future shocks by scaling productive capacities for producers and exporters of energy, minerals while accelerating the completion of critical energy, port, and logistics infrastructure projects in African and Caribbean member states, delayed by the conflict.

Business

President Tinubu Approves N3.3Trn Payments Plan To Restore Reliable Electricity

Implementation has begun, with 15 power plants signing settlement agreements totalling ₦2.3 trillion.

Published

3 days ago

April 6, 2026

OCHEFA

30 Views

President Bola Tinubu has approved the payment plan to finally settle the outstanding debts under the Presidential Power Sector Financial Reforms Programme.

The debt repayment plan followed the final review of the legacy debts that have beset the power sector for more than a decade.

State House press release signed by Bayo Onanuga Special Adviser to the President(Information and Strategy), said that the long-standing debts accumulated between February 2015 and March 2025.

Following verification, ₦3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution.

Implementation has begun, with 15 power plants signing settlement agreements totalling ₦2.3 trillion.

The Federal Government has already raised ₦501 billion to fund these payments.

Out of the amount, N223 billion has been disbursed, with further payments underway.

What this means for Nigerians: With payments reaching the power value chain, generation will be more stable. With power plants supported, electricity reliability will improve.

And as the sector stabilises, more investment, more jobs, and better service will follow. “This programme is not just about settling legacy debts.

It is about restoring confidence across the power sector — ensuring gas suppliers are paid, power plants can keep running, and the system begins to work more reliably”, explained Olu Arowolo-Verheijen, Special Adviser on Energy to President Tinubu.

“It is part of a broader set of reforms already underway — including better metering and service-based tariffs that link what you pay to the quality of electricity you receive.

“The government is also prioritising power supply to businesses, industries, and small enterprises — because reliable electricity is critical to creating jobs, supporting livelihoods, and growing the economy.

“The goal is simple: more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians”, she added.

President Tinubu has commended all stakeholders who supported efforts to resolve the legacy issues in the power sector.

He has also confirmed that the next phase (Series II) will begin this quarter.