MAN calls for uniformed electricity tariff to support production
Manufacturers Association of Nigeria (MAN) has called on the federal government as well as the electricity distribution companies to implement a uniform electricity tariff across all 36 states in order to create a production balance for local manufacturers.
MAN said that this would help boost productivity in the sector.
The MAN President, Mansur Ahmed in a statement at the weekend, said differences in electricity tariff would negatively affect some manufacturers who already struggled with productivity and sales volume, adding that the unfavourable difference in the tariffs would aggravate the production woes of the industry players in addition to the epileptic power supply which they had had to deal with over the years.
“Disparity in electricity tariff has been observed to favour some regions of the country over others and most worrisome is the fact that manufacturers who are made to pay higher tariffs sell their products in the same market and cannot afford resultants effects of wider gap in the prices of products as competitors in the industry,” he said.
Ahmed said the tariff difference, in some instances, was as high as 25 percent, making it impossible to ensure fair competition among manufacturers.
“The resultant effect of this tariff differential is that manufacturers under the Discos with higher tariff rate sell at a loss in order to sustain the market share and, if action is not taken urgently, the affected manufacturers may be forced to close down with looming adverse effect on employment and the economy,” Mansur explained.
He added that if a unified exchange rate could not be implemented, the government should provide a form of palliative to help cushion the impact of the additional cost by establishing an equalisation fund to support distribution companies with smaller numbers of customers in order to ensure tariff uniformity across the states.
Beyond the call to unify the tariff rates, MAN president reiterated that poor power supply had continued to infringe output and competitiveness in the sector, adding that manufacturers spent over 40 percent of the production cost on electricity generation which increased the cost of operation and goods produced.
He said that an improvement in electricity supply in terms of quantity, quality and efficiency in service delivery and pricing was critical to the competitiveness, growth and development of the sector, adding that it was also a technique for sustaining the employment of over six million direct and indirect workers in the sector.