The Manufacturers Association of Nigeria (MAN) has revealed that the country’s persistent electricity shortage poses a significant obstacle to the profitability of manufacturers, resulting in an estimated annual economic loss of N10.1tn, equivalent to approximately two percent of the nation’s Gross Domestic Product (GDP).
MAN emphasized that this unfavorable situation has positioned Nigeria among the most challenging countries to conduct business in, ranking 171 out of 190 countries.
The association’s statement was issued in response to President Bola Tinubu’s approval of the Electricity Bill.
According to MAN, the current power supply is insufficient to meet the energy demands of both the manufacturing sector and the entire population.
However, MAN acknowledged that the Electricity Act of 2023, if effectively implemented, has the potential to be a transformative force for the manufacturing sector.
The statement read, “As an advocacy Association, MAN has consistently advocated for cost-reflective electricity tariffs to prevent the exploitation of our members. Fortunately, this new Act aligns with our stance and is expected to enable a cost-reflective tariff by fostering healthy price competition between states and private investors.”
“The country’s erratic power supply is one of the primary reasons for the relocation of some of our members. If the new Act adequately addresses the challenges in the power sector, we are optimistic that it will attract manufacturing foreign direct investment (FDI), boost sector performance, and increase the sector’s contribution to the economy.”
MAN expressed optimism that if utilized effectively, this substantial revenue could help address infrastructure deficits in many states without imposing additional tax burdens on manufacturers.
