Manufacturers threaten to shut down operations over high energy costs, others

Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, said about 2,500 of the association’s members are contemplating shutting down and sending their workers home if nothing is done about the high electricity tariffs. He said the members hoped their action would attract the attention of the government to their plight and get it to accede to their demands.

Speaking at a media briefing announcing the association’s Annual General Meeting (AGM), the DG said the electricity tariff suddenly went up by 250 per cent, adding that no business or even individual can survive the sharp increase.

“It is even more evident that no business is supposed to survive as the federal government went on to give a 50 per cent discount to universities and hospitals. If the increase was acceptable in the first place, the government would not give them a discount.

“Manufacturers are very much as deserving of the subsidy as other institutions because we create jobs, pay taxes and are responsible for the increase in non-oil exports the country is boasting of. We are qualified to enjoy a discount as well,” he insisted.

Reacting to MAN’s legal suit that was last week, the DG said the association remained undeterred, adding that some manufacturers are extremely agitated and have expressed worries about the survival of their businesses.

“They have said we should shut down operations completely and send the workers home. Maybe, the government will listen. We have 2,500 members and you can imagine if every one of us shuts down. It will be catastrophic,” he said.

He said a 100 per cent increase might be acceptable but a 250 per cent increase at once is ridiculous “especially since half of our production cost goes to energy costs”.

He said multiple taxation remains one of the top two problems facing manufacturers, which they hope would be addressed by the Presidential Tax Reform Committee.

He said some of the committee’s outcomes are already being implemented and that he was hopeful the committee would see the reform through.

Lamenting that they are currently over-taxed, he said manufacturers currently pay over 60 taxes and levies and asked that this be streamlined to a maximum of 10.

President of the Association, Otunba Francis Meshioye, said the Nigerian Electricity Regulatory Commission (NERC) and other relevant bodies did not go through the right process to determine the current tariff pricing. If they had, she said, all stakeholders would be on the same page.

“The DisCos forcefully placed us on Band A, when not all businesses run 24-hour shifts or asked to be put on Band A. Many small businesses that run eight-hour shifts, for instance, cannot afford that Band and have cried out. The DisCos are not mindful of that, hence they put everyone together,” he said.