Electricity tariff hikes in Nigeria are pushing manufacturers to the brink of collapse, with rising energy costs threatening the survival of the sector. Manufacturers have been vocal about the detrimental impact of increased energy costs, with electricity tariffs skyrocketing by 212% for ‘Band A’ consumers over the past year.
Despite legal efforts by the Manufacturers Association of Nigeria (MAN) to challenge the tariff hike, a recent court ruling dismissed their case as premature and lacking legal basis. This setback means manufacturers will continue to face high production costs, leading to low sales, increased inventory, potential shutdowns, and job losses.
The President of MAN, Francis Meshioye, expressed concerns about the government’s policies making manufacturing unattractive in Nigeria. The Director-General, Segun Ajayi-Kadir, highlighted the impact of high energy costs on competitiveness and production, citing diesel prices as a major burden for manufacturers.
The sector faces challenges in the fourth quarter, including interest rate hikes, high diesel prices, and electricity tariff increases. The escalating costs are reflected in the Manufacturers CEO Confidence Index (MCCI) survey, signaling a concerning business environment for manufacturers.
As energy costs rise, manufacturers in Nigeria are fighting to stay afloat amidst economic challenges that threaten the resilience of the sector.