The Manufacturers Association of Nigeria (MAN) has raised concerns over the proposed increase in electricity tariff by power distribution companies, stating that it could lead to more multinational companies relocating their factories outside of Nigeria. According to MAN President Francis Meshioye, several international manufacturing firms have already left the country due to the challenging operating environment, including power crises. He emphasized that any further tariff hike would result in an exodus of companies and urged the government to reconsider the decision.
The electricity distribution companies (DisCos) had previously announced plans to raise the electricity tariff by around 30 to 40 percent for selected consumer categories starting from July 1, 2023. However, they have since retracted their announcement, clarifying that the Nigerian Electricity Regulatory Commission (NERC) has yet to approve the tariff hike.
Meshioye highlighted that energy costs significantly impact manufacturing operations, and reducing these costs would benefit both manufacturers and the general population. He pointed out that high energy costs, among other factors, have prompted some international businesses to relocate from Nigeria to other countries. The unpredictability of the foreign exchange rate and the availability of forex were also mentioned as challenges for manufacturers.
The MAN president emphasized the need for a conducive business environment, where energy costs are reduced, forex is more predictable, and challenges affecting manufacturers are addressed. Ensuring a favorable operating environment would not only retain existing businesses but also attract new investments, fostering economic growth and job creation.
