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The Organised Private Sector of Nigeria (OPSN) has sounded the alarm over the detrimental impact of the recent surge in electricity tariff, warning that more than 65% of private businesses, particularly manufacturing firms and SMEs, may face closure due to the exorbitant rates.
Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, speaking on behalf of OPSN, highlighted the severe implications of the over 200% increase in electricity tariff imposed by the Nigerian Electricity Regulatory Commission (NERC). He emphasized the lack of proper consultations with the private sector before implementing such drastic measures.
Ajayi-Kadir stressed that the sharp rise in electricity costs amidst inadequate power supply poses a significant threat to the competitiveness of Nigerian products and businesses, exacerbating the already high cost of production. He provided a detailed analysis, revealing the substantial financial burden imposed on medium-sized companies, further underscoring Nigeria's ranking as one of the countries with the highest electricity costs globally.
Expressing concern over the timing of the tariff hike amidst macroeconomic instability and infrastructure deficits, Ajayi-Kadir emphasized the adverse impact on the productive sector. He warned that the unprecedented increase could lead to widespread business closures, exacerbating unemployment and insecurity in the country.
OPSN called for the immediate suspension of the new tariff implementation to facilitate meaningful dialogue among stakeholders and transparent tariff-setting mechanisms. While commending the government's efforts to stabilize the economy and enhance fiscal transparency, OPSN urged a reconsideration of the tariff hike to avert dire economic consequences.
In conclusion, OPSN emphasized the urgent need for collaborative efforts to address the challenges posed by the electricity tariff hike and safeguard the survival of Nigerian businesses and the overall economy.
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