THE Manufacturers Association of Nigeria (MAN) has faulted the Nigerian Electricity Regulatory Commission’s (NERC’s) Multi-Year Tariff Order (MYTO), especially the fixed charges.
Its President, Dr Frank Udemba Jacobs, said that with the poor supply of electricity, there would be an increase in the cost of production of manufacturers and this would translate to higher prices of goods.
He said: “The issue of electricity supply is of great concern to MAN considering that it has been a major challenge to the sector. MAN has argued the various Multi-Year Tariff Orders of the Nigerian Electricity Regulatory Commission (NERC) and demanded that fixed charges be removed. We hope and believe that we will achieve it.”
He explained that the initial analysis made by MAN showed that the removal of fixed charges and the recent increase in tariff under the proposed new tariff order (MYTO 2.3), will increase the cost of electricity and that of the cost of production.
The MAN chief argued that the increase in tariff would not be supported with increased electricity supply, and that manufacturers would still depend on self- generation of electricity.
He urged the government to be interested on the growth of the economy through a robust policy that will make the operating environment conducive to local manufacturers.
He added that the manufacturing sector is a huge job creating sector and should be supported instead of extorting them through unhealthy policies which indirectly affect the importers of finished products.
He however said there is a pending litigation against the increase in tariff by MAN against NERC, adding that any proposed increase affecting MAN members will be subjudice.
He also said the foreign exchange (forex) policy of the Federal Government has affected the manufacturing sector negatively as the productivity in the sector contracted greatly last year.
He praised some noticeable modifications in the various presentations and recommendations by MAN.
He said the challenges felt in the economy might not be unconnected with the crash of crude oil prices in the international market, adding that as the forex situation improves, further modification of the policy should be undertaken.
Jacobs asked that the discontinued allocation of forex to Bureau de Change (BDCs) should be dedicated to support the importation of raw materials instead and also the machinery that are not available locally which will grow the manufacturing sector.
