Business

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

Published

3 years ago

June 23, 2023

196 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

Up Next

CBN Urges Banks to Obtain Customers’ Social Media Handles For easy Identification

Don't Miss

Cement Manufacturers Urges To End Use of Coal – Fired Power in Productions

Click to comment

Business

Heirs Energies Secures $750 Million Financing from Afreximbank for Expansion

Published

2 days ago

December 21, 2025

Charles Flames

61 Views

Heirs Energies Limited, Nigeria’s leading indigenous integrated energy company, has secured a $750 million financing facility from the African Export-Import Bank (Afreximbank).

The deal was finalized during a signing ceremony in Abuja on December 20, 2025, attended by Tony O. Elumelu, CFR, Chairman of Heirs Energies, and Dr. George Elombi, President and Chairman of Afreximbank.

This transaction marks one of the largest financings ever obtained by an indigenous African energy firm, underscoring strong confidence in Heirs Energies’ operational track record, governance, brownfield expertise, and future growth potential.

Since taking over operatorship of Oil Mining Lease (OML) 17, Heirs Energies has implemented a rigorous turnaround strategy, emphasizing production recovery, asset integrity, and efficiency gains.

Through targeted interventions and infrastructure upgrades, the company has shifted from acquisition-focused funding to a sustainable capital structure suited to long-term reserve development.

Production has doubled since acquisition, rising from 25,000 barrels of oil per day (bopd) and 50 million standard cubic feet of gas per day (mmscf/d) to more than 50,000 bopd and 120 mmscf/d currently. All gas output is supplied to Nigeria’s domestic market, playing a key role in supporting national power generation.

The company has also overhauled community engagement and upheld top-tier health and safety standards.

The new Afreximbank facility will fund accelerated field development, production optimization, and strategic growth initiatives, all while adhering to strict capital discipline.Tony O. Elumelu, CFR, Chairman of Heirs Energies, commented: “This transaction is a powerful affirmation of what African enterprise can achieve when backed by disciplined execution and long-term African capital.

It reflects the successful journey Heirs Energies has taken—from turnaround to growth—and reinforces our belief in African capital working for African businesses. This is Africa financing Africa’s future.

”Dr. George Elombi, President and Chairman of Afreximbank, added: “Afreximbank is proud to support Heirs Energies at this pivotal stage of its growth.

This financing reflects our confidence in the company’s leadership, governance, and asset base, and aligns with our mandate to support African champions driving sustainable economic transformation across the continent.

”The deal highlights Afreximbank’s commitment to empowering indigenous operators capable of advancing energy security, sustainable development, and economic value throughout Africa.

With this funding in place, Heirs Energies is well-positioned for its next growth phase, prioritizing operational excellence, responsible resource management, and lasting stakeholder value.

Heirs Energies Limited is Africa’s leading indigenous-owned integrated energy company, dedicated to addressing the continent’s energy demands while advancing global sustainability objectives. It emphasizes innovation, environmental stewardship, and community development in the evolving energy sector.

The African Export-Import Bank (Afreximbank) is a Pan-African multilateral institution focused on financing and promoting intra- and extra-African trade, supporting industrialization, trade growth, and economic transformation.

Business

Dangote: A Dogged and Fierce Fighter for Local Industries Survival

Nigeria aims to reduce reliance on imported refined fuels by 2024/2025, transitioning to self- sufficiency through the Dangote Refinery and rehabilitated refineries in Port Harcourt, Warri, and Kaduna, with plans to become a net exporter.

Published

5 days ago

December 18, 2025

OCHEFA

92 Views

By OCHEFA

Africa’s billionaire Aliko Dangote, an astute industrialist, is always attentive to the environment around him, embodying the idiom” ears to the ground.

His investments in Nigeria and the other African countries span cement, sugar, petrochemicals, fertilisers and his latest venture, a $20 billion petroleum refinery in the Lekki free trade zone in Lagos.Six months ago, Dangote stepped down as the Chairman of the Dangote Group’s Board on July 25, 2025.

Anthony Chiejina, the Group’s Chief of Branding and Communications, explained that this move allows Dangote to focus more on the refinery, petrochemicals, Fertiliser, and government relations, to elevate the company’s five- year plan to new heights.

Subsequently, Emmanuel Ikazoboh, an independent non- executive director, was appointed Chairman of Dangote Cement Plc.

With his keen awareness of global and local oil and gas developments, Dangote closely monitors issues affecting his refinery’s operations.

He relies on a team of experts to keep him informed, and he responds fiercely against policies threatening his interests.

A current example is his public dispute with Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

With his keen awareness of global and local oil and gas developments, Dangote closely monitors issues affecting his refinery’s operations.

Recently, Dangote accused NMDPRA of economic sabotage, criticising its continued issuance of import licences for petroleum products- licenses totalling approximately 7. 5 billion litres of PMS for early 2026- despite Nigeria’s growing refining capacity.

He claimed this undermines local refining, sustains Nigeria’s dependence on fuel imports, and discourages local investments.

Dangote also alleged collusion between NMDPRA and international traders, which the regulator has denied.

Policies like a proposed 15% duty aim to make imports more expensive and accelerate this transition.

Dangote insists that he seeks accountability, not removal, calling for an investigation into NMDPRA’ s actions.

Following Dangote’s accusations,Ahmed resigned, acknowledging awareness of allegations against him and his family, which have attracted public attention.

He stated he avoided public disputes due to the sensitive nature of his regulatory role but welcomed a formal investigation to clear his name.

President Tinubu then asked the Senate to approve new CEOS for NMDPRA and NUPRC- Engineer Saidu Aliyu Mohammed and Oritsemeyiwa Amanorisewo Eyesan, respectively.

Business

President Tinubu to present 2026 budget to N/Assembly Friday

The 2026 budget is projected at N54.4 trillion, according to the approved 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

Published

5 days ago

December 18, 2025

OCHEFA

127 Views

President Bola Ahmed Tinubu will, on Friday, present the 2026 Appropriation Bill to a joint session of the National Assembly.

The presentation, scheduled for 2:00 pm, was conveyed in a notice issued by the Office of the Clerk to the National Assembly.

According to the notice, all accredited persons are required to be at their duty posts by 11:00 am on the day of the presentation, as access into the National Assembly Complex will be restricted thereafter for security reasons.

The notice, signed by the Secretary, Human Resources and Staff Development, Essien Eyo Essien, on behalf of the Clerk to the National Assembly, urged all concerned to ensure strict compliance with the arrangements ahead of the President’s budget presentation.

The 2026 budget is projected at N54.4 trillion, according to the approved 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).