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New electricity tariff will increase cost of production – MAN

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The Manufacturers Association of Nigeria has said the new electricity tariff, coupled with the inadequate power supply in the country will not favour manufacturers in the country.

President of MAN, Dr. Frank Udemba said the new Multi-Year Tariff order will actually increase the cost of production.

He said: “The issue of electricity supply is of great concern to MAN considering that it has been a major challenge to the sector. MAN has contested the various Multi-Year Tariff Orders of the Nigerian Electricity Regulatory Commission (NERC) and demanded that fixed charges be removed. We hope and believe that we will achieve it.”

He explained that the initial analysis made by MAN showed that the removal of fixed charges and the recent increase in tariff under the proposed new tariff order (MYTO 2.3) will raise the cost of electricity and that of the cost of production.

The MAN chief argued that the increase in tariff would not be supported with increased electricity supply, and that manufacturers would still depend on self- generation of electricity.

He urged the government to be interested on how to grow the economy through a robust policy that will make the operating environment conducive to local manufacturers.

According to him, the manufacturing sector is a huge job creating sector and should be supported instead of stifling them through unhealthy policies which indirectly affect the importers of finished products.

He however said there is a pending litigation against the increase in tariff by MAN against NERC, adding that any proposed increase affecting MAN members will be subjudice.

He said the challenges felt in the economy might not be unconnected with the crash of crude oil prices in the international market, adding that as the forex situation improves, further modification of the policy should be undertaken.

On the discontinuance of allocating forex to Bureau de Change (BDCs), Jacobs asked that it should rather be dedicated to support the importation of raw materials and machinery that are not available locally to grow the manufacturing sector.

 

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