MAN President, Mansur Ahmed
- Says move to ensure competitive pricing, save industries, jobs
For a level playground that will ensure a fair price/product competition among manufacturers and save, the Manufacturers Association of Nigeria (MAN) has called on the Federal Government to prevail on electricity Distribution Companies (DisCos) to regularise the varying cost of tariff across different states.
MAN expressed dismay that the tariff favours some regions of the country over others, even as manufacturers compelled by that disparity to pay higher tariffs also sell their products in the same market, thereby making them unable to compete in the industry following the resultant wider gap in the prices of same products.
In a statement, MAN President, Mansur Ahmed, noted that “these tariff differences in some instances are as high as 25 per cent, making it impossible to ensure fair competition among manufacturers.
“The resultant effect of this tariff differential is that manufacturers under the DisCos with higher tariff rate sell at loss in order to sustain their market share, and if action is not taken urgently, the affected manufacturers may be forced to close down, with looming adverse effect on employment and the economy.”
Therefore, “MAN recommends uniformity in tariff and, where the disparity has to be maintained due to the difference in commercial activities, government should intervene with the establishment of an equalisation fund as provided in the petroleum sector to support DisCos with fewer customers, to ensure uniformity in tariff across the country.”
Meanwhile, the association commended government’s efforts at sustaining economic growth and the development of the nation’s manufacturing sector, particularly the ongoing efforts at ensuring reliable and sustainable electricity supply.
It noted that inadequate electricity supply has been a major challenge to the competitiveness of the manufacturing sector, as manufacturers spend over 40 per cent of the production overhead on power supply, thereby leading to increase in cost of operation and prices of locally manufactured goods, compared to prices of similar products from other countries.
To that end, it is noteworthy that “improvement in electricity supply in terms of quantity, quality, efficiency in service delivery and pricing is critical to the competitiveness, growth and development of the sector,” MAN added.
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