The Manufacturers Association of Nigeria has called on the Federal Government to prevail on the electricity Distribution Companies to regularise the varying cost of their tariff across different states of the country.
They said this in a statement signed by President of the association, Mansur Ahmed, a copy of which was made available to our publisher/editor-in-chief on Friday in Lagos.
They said this call became necessary in order to create a level-playing ground for manufacturers in Nigeria.
The manufacturers also noted that the inadequacy of electricity supply has been one of the major challenges hindering the competitiveness of manufacturing sector in the country.
They claimed that manufacturers spent over 40 per cent of their production overhead cost on electricity, “which usually lead to increase in cost of operation and prices of made -in -Nigeria goods when compared with prices of similar products from other countries.”
The manufacturers added that improvement in electricity supply in terms of quantity, quality, efficiency in service delivery and pricing, was critical to the competitiveness, growth and development of the sector.
The statement read in part, “The Manufacturers Association of Nigeria calls on the Federal Government to prevail on the Electricity Distribution Companies to regularise the varying cost of electricity tariff across different states for the purpose of creating a level playing ground for manufacturers in Nigeria.
“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 resultant effects of wider gap in the prices of products as competitors in the industry.
“This tariff differences in some instances are as high as 25%, making it impossible to ensure fair competition amongst manufacturers.”
The manufacturers argued that the resultant effect of this tariff differential “is that manufacturers under the DisCos with higher tariff rate sell at loss in order to sustain the market share.”
They said if nothing was done about this disparity urgently, the affected manufacturers might be forced to close down with looming adverse effect on employment and the economy.
The MAN argued that in the event where the disparity has to be maintained due to the difference in commercial activities; “then Government should intervene with the establishment of an equalisation fund as provided in the petroleum sector to support DisCos with smaller number of customers in order to ensure uniformity in tariff across the country.”
They commended the efforts of the Federal Government aimed at sustaining economic growth and the development of the manufacturing sector, particularly the ongoing efforts at improving the quality of reliable and sustainable electricity supply in the country.
The manufacturers noted that these recipes if adopted would sustain the employment of over 65 million direct and indirect workers in the manufacturing sector.