The hike, according to Ajayi-kadir, was against the background of prevailing harsh operating environment, the increasing burden of taxes, the enormous spending on self-generated electricity up to the tune of N70billion (excluding hundreds of billions Naira spent on settling monthly electricity bills) and the ailing state of a sector that is just recovering from a lockdown occasioned by the ravaging COVID-19 pandemic.
The association also lamented that the hike would decrease forex earnings and reduce government’s tax revenue. Director General of the association, Segun Ajayi-Kadir, who made the position of the manufacturers known in a statement yesterday, emphasised that top on the list of challenges confronting the sector is inadequate power supply and this has been largely responsible for the lackluster performance of the sector for some decades now.
Noting that the increase, coming at a wrong time, would clearly reverse the little gains in the recent past; and coming at the commencement of the African Continental Free Trade Agreement (AfCFTA); and barely three months after the huge increment was imposed on electricity users in October 2020, is not manufacturing friendly.
MAN queried why the NERC should approve increase in electricity tariff before consultations with stakeholders: and are the prevailing macroeconomic fundamentals congenial for an increase?,knowing full well that the association represents the interests of over 3,000 manufacturers (small; medium; large and multinational industries) spread across 10 sectors, 76 sub-sectors and 16 industrial zones and manufacturers who are heavy users of electricity in Nigeria.