Wunmi Semudara
The Manufacturers Association of Nigeria (MAN) has lamented the huge sum of money being spent on alternative sources of energy.
While noting that manufacturers in Nigeria spent around N144 billion on alternative sources of energy in 2022.
The Director-General of MAN, Segun Ajayi-Kadir disclosed this in a press statement, concerning the proposed electricity tariff hike by the NERC.
He also expressed worry over the potential increase in electricity tariffs, warning that this could lead to a surge in production costs, subsequently causing an increase in the prices of goods and services across the country.
According to Ajayi-Kadir, the unreliable electricity supply has forced many manufacturing industries to seek alternative energy sources, such as diesel, which have become exorbitantly expensive.
“On average, surveyed data by MAN suggested that manufacturers spent at least N144.5 billion on sourcing alternative energy in 2022, up from N77.22 billion in 2021. This translates to about an 87 per cent increase in the cost of access to alternative energy sources by manufacturers within a year.” He said.
Kadir observed that in the past eight years, electricity tariffs have risen by 186 per cent and also disclosed the government’s outstanding debt of N75 billion unpaid electricity bills, which underscores the burdensome cost of electricity.
The MAN Director-General, warned that any further increase in electricity tariffs would result in higher production costs for manufacturers. He highlighted the fact that energy costs already account for between 28 per cent to 40 per cent of the manufacturing industry’s cost structure.
He further recommended the need for effective implementation of the recently enacted Electricity Act (2023), which aims to boost the electricity supply in the country.
Kadir stressed the importance of extensive and intensive consultations between the government and manufacturers.
He called for proactive measures to salvage the manufacturing sector and prevent the closure of factories, which would have adverse effects on employment and the overall economy.
