By John Egbokhan
Director-Generalof the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, has said the privatisation of the power sector has not yielded the expected results, calling for an audit of investment in the industry.
Ajayi-Kadir spoke in a statement on the “frequent” increase in electricity tariffs, which he said is hampering the performance of the manufacturing sector and the nation’s economic growth.
He said increase in tariffs will significantly affect production costs and product prices, pointing out that electricity is a crucial input in manufacturing.
The MAN DG said no nation can achieve substantial industrial development without ensuring energy security, adding that increasing tariffs would harm the competitiveness of Nigerian products and businesses.
He warned that such hike would worsen production costs, intensify inflationary pressure, and further reduce consumers’ disposable income.
“It was due to the critical role of energy security in Nigeria’s industrial aspirations that the power sector was privatised in 2013,” he said.
“Unfortunately, this privatisation has not delivered the expected results.
“The sector struggles because operators lack both technical and financial capacity to ensure optimal performance.”
Bemoaning power generation, Ajayi-Kadir said Nigeria’s installed electricity capacity has consistently been around 10,000 megawatts (MW).
“Despite failing to meet demand, there have been continuous tariff increases without a corresponding improvement in supply quality,” he said.
“According to the National Bureau of Statistics (NBS), electricity supply was 5,909.83GWh in Q2 2023 but dropped to 5,769.52GWh in Q1 2024 and 5,612.52GWh in Q2 2024.
“This decline followed the implementation of a tariff increase exceeding 230 percent.
“This represents a 5.03 percent year-on-year decrease and a 2.72 percent quarter-on-quarter decline.”
