Burden of higher electricity tariffs will exacerbates challenges facing businesses—ACCI

The Abuja Chamber of Commerce and Industry (ACCI) says the burden of higher electricity tariffs will exacerbate challenges facing businesses and also threatens their long-term viability.

It would be recalled that the Nigerian Electricity Regulatory Commission (NERC) recently increased the electricity tariffs for Band A consumers by over 300 per cent from around N66 per KWh to N225 per KWh.

The commission noted the hike only affects around 17 per cent of the total electricity consumers in the country who receive up to 20hrs of electricity daily.

Reacting, President of ACCI, Mr. Emeka Obegolu at the weekend expressed concerns that this increase would adversely affect businesses throughout different sectors of the economy.

He noted the existing difficulties entrepreneurs and investors are grappling with and suggested that Small and Medium Enterprises (SMEs), vital to the economic fabric, would suffer considerably due to the increased tariffs.

He stated, “Many enterprises are already struggling with reduced demand, supply chain disruptions, and financial constraints.  As advocates for the business community, we urge relevant authorities to reconsider this decision and explore alternative solutions that prioritise the needs of businesses and support ease of doing business.”

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“It is vital to strike a balance between ensuring a sustainable energy sector and mitigating the adverse effects of tariff hikes on businesses, particularly during these trying times,”

The president stated that the rise in tariffs would obstruct the ability of businesses to invest in new technologies and growth, and it would affect their competitive edge in local and global markets.

He further mentioned worries that the increased tariffs, along with other economic hurdles like the elimination of fuel subsidies and the consolidation of foreign exchange rates, might exacerbate the challenges encountered by businesses.

In a similar development, the Lagos chapter of the Labour Party (LP) has asked the federal government to review the “astronomical” hike in the tariff payable by some electricity consumers in the country.

In an interview on Sunday, Olubunmi Odesanya, publicity secretary of the LP in Lagos, said the hike is ”unreasonable”, adding that Nigerians are already experiencing economic hardship.

“On a daily basis, Nigerians are bearing the brunt. This is simply not working. A good number of Nigerians are suffering,” she said.

“Nigerians are currently facing hardship. The government should know that people are at the heart of every government. This astronomical increase in electricity tariff should be reconsidered.”

The Labour Party publicity secretary said the hike also hurts the economy and not electricity consumers alone.

Odesanya added that the tariff hike should not have exceeded 25 percent.