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Varying electricity tariffs worry manufacturers

Manufacturers have expressed concern over the  varying cost of electricity tariff across different states in the country.

In a statement issued by President, Manufacturers Association of Nigeria,  Mansur Ahmed, on Friday, they said the disparity in electricity tariff had been observed to favour some regions of the country over others.

Ahmed noted that the tariff differences, which is about 25 per cent, was causing unfair competition among manufacturers.

“…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,” MAN president said.

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The association therefore called on the Federal Government to prevail on the electricity distribution companies to regularise the varying cost of electricity tariff across different states in order to create a level playing ground for manufacturers.

According to Ahmed, the resultant effect of the tariff differential is that manufacturers under the Discos with higher tariff rate sell at a loss in order to sustain their market shares.

He warned that if action was not taken urgently, the affected manufacturers might be forced to close down with looming adverse effect on employment and the economy.

He recommended that in the event where the disparity had to be maintained due to the difference in commercial activities, the government could intervene.

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Ahmed suggested 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.

Ahmed noted that the inadequacy of electricity supply had been one of the major challenges hindering the competitiveness of manufacturing sector in the country.

This, according to him, is because manufacturers spent over 40 per cent of the production overhead on electricity leading to increase in cost of operation and prices of made-in-Nigeria goods when compared with prices of similar products from other countries.

“MAN therefore seizes this opportunity to commend the efforts of the Federal Government aimed at sustaining economic growth and the development of the manufacturing sector in Nigeria particularly the ongoing efforts at improving the quality of reliable and sustainable electricity supply in the country,” the statement read.

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Ahmed noted 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.

Improved supply, according to him,  will help to sustain the employment of over 65 million direct and indirect workers in the manufacturing sector.

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