The Manufacturers Association of Nigeria (MAN) has called on the Federal Government to prevail on electricity distribution companies to regularise the varying costs of electricity across the states of the country.
The President of MAN, Mr Mansur Ahmed, made the call in a statement on Friday in Lagos.
Ahmed said that the appeal for uniformity in tariff rates was for the purpose of creating a level-playing field for manufacturers in Nigeria.
Ahmed said that the disparity in electricity tariff rates was observed to have favoured some regions of the country over others.
According to him, most worrisome is the fact that manufacturers are made to pay higher tariffs and sell their products in the same markets as those who pay less.
He said that some manufacturers might not be able afford the resultant effects of the wider gap in prices of products, as competitors in the industry.
“The tariff differences, in some instances, are as high as 25 per cent, which makes it impossible to ensure fair competition among manufacturers.
“The resultant effect of this tariff differential is that manufacturers, operating under the DisCos with higher tariff rate, sell at a loss in order to sustain market share.
“If action is not taken immediately, the affected manufacturers may be forced to close down, with looming adverse effect on employment and the economy,” he said.
Besides, the MAN President called for the establishment of an equalisation fund, just like what obtained in the petroleum sector, to support DisCos with smaller number of customers to ensure uniformity of electricity tariff across the country.
He said that the proposed fund would be useful in the event that the disparity had to be maintained due to the differences in commercial activities.
Ahmed, however, lauded the government’s efforts to sustain economic growth and develop the manufacturing sector, particularly its ongoing efforts to improve the quality of reliable and sustainable electricity supply in the country.
“The inadequacy of electricity supply has been one of the major challenges hindering the competitiveness of manufacturing sector in the country.
“Manufacturers spend over 40 per cent of their production overhead on electricity, leading to increase in cost of operations and prices of made-in-Nigeria goods, when compared with similar products from other countries.
“It is, therefore, worthy to note that improvement in electricity supply, in terms of quantity, quality, efficiency in service delivery and pricing, is critical to the competitiveness, growth and development of the manufacturing sector.
“This, we believe, is a recipe for sustaining the employment of over six million direct and indirect workers in the manufacturing sector,” he said.