Implementation Of New Electricity Law Will Be A Major Game-Changer For Manufacturing- MAN

The Manufacturers Association of Nigeria (MAN) says the signing of the Electricity Act 2023, if well implemented, can be a major game-changer for the manufacturing sector with favourable implications.

Mr Segun Ajayi-Kadir, Director General, MAN, said this in a report signed by Ms Chisom Oguezuonu, Executive Officer, Corporate Service Division, MAN, on Thursday in Lagos.

Ajayi-Kadir noted that over the past decades, the Nigerian power sector had encountered various turbulence in its electricity value chain.

He attributed this to poor policy enforcement, over-regulation, instability of gas supply and bottlenecks in its transmission network.

He said that these problems culminated into erratic electricity supply, frequent power outages and persistent collapses of the national grid, thereby stunting the growth of the economy.

He noted that Nigeria’s inadequate electricity supply was a hindrance to the profitability of manufacturers with an annual economic loss valued at about N10.1 trillion or two per cent share of the country’s Gross Domestic Product (GDP).

According to him, the total amount spent by manufacturers on alternative energy surged from N77.21 billion in 2021 to N144.47 billion in 2022.

He, however, stated that the newly signed Electricity Act 2023, could lead to the drastic fall in the cost of alternative energy and address numerous constraints within the sector.

“MAN has always pushed for the need to charge a cost-reflective electricity tariff to avoid extortion of our members.

“Fortunately, it is of great delight that this new Act fits like a glove as it will help actualise a cost-reflective tariff, considering the healthy price competition it will bring between the states and private investors.

“The country’s epileptic power supply is one of the prominent reasons for the relocation of some of our members.

“Provided the new Act adequately addresses the challenges in the power sector, we are quite optimistic that such development will encourage the inflow of manufacturing Foreign Direct Investment (FDI), boost the performance of the sector and increase the sectoral contribution to the economy,” he said.

The MAN DG added that the newly signed Act would increase Internally Generated Revenue (IGR), investment in renewable energy, improve infrastructure, stable power supply and less tax burden on manufacturers.

He also said that the empowerment of private manufacturing companies to generate their own electricity would unleash massive investment in backward integration activities, which would be a major enabler of energy security within the sector.