‘Electricity tariff, inflation skyrocketing production costs’

The Manufacturers Association of Nigeria (MAN) has decried the recent hike and disparity in electricity tariffs under the new Multi-Year Tariff Order (MYTO) and rising inflation level caused by fluctuating exchange rate, saying that both are contributing to high cost of production and wages.

Speaking at the emergency meeting held in Sango-Otta on the economic impact of the two variables on the manufacturing sector in the Western zone, covering all South-West states‎ and Edo and Delta states, Dolapo Ogutuga, vice-president of the zone, said government should provide reliable interventions to cushion the effects of the harsh economic situations to promote smooth manufacturing operations.

Ogutuga, who spoke in company of Babajide Taiwo from Ibadan forum Nigerian Electricity Regulatory Commission (NERC) and other members of the association, said activities in the manufacturing sector hinge mainly on electricity, adding that if anything affected supply of energy, the bulk of increased production cost and wages will be shifted to the consumers.

The situation could worsen the country’s inflation rate, if not urgently addressed, he said, pointing out that the cyclical effect of the action taken by NERC and distribution companies (discos) on hike and discriminatory electricity tariffs as well as the fluctuating exchange rate could worsen the economic situation. Based on this, therefore, he asked for “efficiency in the output and fairness in the billing.

“Electricity is a major one, if you look at the cost to the manufacturers. We want efficiency in the output; we want fairness in the billing. It is going to add to inflation and will add to production cost and market price, and the workers will also be asking for increment of wages.

“Apart from electricity tariffs, we know that exchange rate is going through the roof, really. As dollar goes from N160 in the official market to N230 at this moment, and we don’t know when it will end. This is an additional cost to production. What we want is government protection and introduction of high duties on imports to encourage patronage of local goods.”

Responding on the issue of high and discriminatory electricity tariffs, Babajide Taiwo, who represented Sam Amadi, chairman of NERC at the meeting, assured that there will be urgent and effective solutions to the problems identified by MAN in the electricity tariffs charged by discos, saying that there will be acceptable solutions to the issue.

“On the issue of new tariffs, the headquarters are already looking at it and I can assure you that within the next few days, they will come out with solutions that will be acceptable to both parties.‎ When issues come up, we need to find solutions. That is why I am here. ‎We have discussed and based on assurance I am getting from Abuja, I want to assure MAN that there will be smile at the end of the day,” he assured.

RAZAQ AYINLA