The Manufacturers Association of Nigeria, Edo/Delta branch, has described the increase in electricity tariff by the Nigerian Electricity Regulatory Commission as `ill-timed’ due to the economic recession.
Okwara Udensi, chairman of the branch, told the News Agency of Nigeria in Benin on Wednesday that many businesses were still facing untold hardship caused by the COVID-19 pandemic and #EndSARS violence.
He said the manufacturing sector was currently being faced with high cost of production, noting that any further increase in electricity tariff would worsen production and purchasing power of consumers.
“The economy is in a bad shape, we are in recession, so an increase in electricity tariff will translate to an increase in the cost of goods and services.
“Besides, the purchasing power of the people is low and people will not buy goods produced at very high cost and this will lead to most SMEs becoming moribund,” he said.
Meanwhile, the NERC had denied that it never increased electricity tariff by 50 per cent as reported in the media.
The commission, in a statement, by its Chairman, Garba Sanusi on Tuesday in Abuja, said it only adjusted its December 2020 Multi Year Tariff Order and Minimum Remittance Order by N2 and N4 among categories of consumers.
The commission blamed the increase on inflation and the current exchange rate of N379.4/$1 as of Dec. 29, 2020.
The agency said the increase would begin in June.
Udensi however, said the increase would further raise cost of production and urged NERC to put its intention on hold.
According to him, all over the world, manufacturing industry contributes a greater percentage of GDP to the economy, but in Nigeria, a lot of SMEs have closed due to the pandemic while many workers have been laid off.
He said that what the SMES needed now was government support to grow rather than increase in electricity tariff.