Adaobi Rhema Oguejiofor
The Manufacturers Association of Nigeria (MAN) has called on the Federal Government to reconsider the move to increase electricity tariffs, as there is a likelihood that more manufacturing companies may leave Nigeria for other countries if the electricity tariff regime is not improved.
The President of MAN, Francis Meshioye, made this known in a statement, where he said that already, several international manufacturing firms have exited Nigeria on account of its continual power crisis, coupled with the unpredictability of the country’s foreign exchange rates before its recent unification.
Meshioye explained that the over N144 billion that has so far been spent on alternative sources of energy by manufacturers in 2022 has negatively impacted the operations of the Association’s members. He stressed that any further hike in tariff would lead to an exodus of companies.
In his own words, “in every system, there’s always a core structure and this includes the elements that make up the total cost spent in generating your revenue. Now, what we experience as manufacturers is that energy cost is a major cost in processing our products.
“If you spent N144 billion on alternative energy sources in one year, you can only imagine the impact that will have on your cost of operations. The manufacturing business in Nigeria is affected by so many factors, energy is a major one.”
According to him, manufacturers provide almost every infrastructure by themselves, that is, aside from the major roads that were provided by the government, manufacturers provide water, power, and security, among others, which makes the cost of doing business so huge, that a businessman will have to ask if Nigeria is the only place his business can be done or if he can move capital elsewhere and still make good profit.
The MAN President noted that the downsizing of businesses in Nigeria, for instance, shows that businesses are not doing very well, as the issue of power and other things have made some manufacturers, particularly international businessmen to relocate from Nigeria to other countries.
He stated that something should be done about the power issue, adding that raising tariffs was not in the interest of manufacturers and that anything to reduce this energy cost will be very beneficial both to manufacturers and the masses in general.