The Organised Private Sector of Nigeria sounded alarms over a drastic surge in electricity tariffs, predicting dire consequences for businesses, particularly manufacturing firms and SMEs.

The OPSN warned that over 65% of private enterprises could face closure due to the exorbitant tariffs.

Speaking on behalf of the OPSN, Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, expressed grave concerns about the recent over 200% increase in electricity tariffs imposed by the Nigerian Electricity Regulatory Commission. He criticized the lack of consultation with the private sector regarding this decision.

Ajayi-Kadir highlighted the adverse effects of the tariff hike on the competitiveness of Nigerian businesses. He noted that the astronomical increase, coupled with inadequate electricity supply, would severely impact the cost of production and hinder the growth of local industries.

Analyzing the impact of the tariff hike, Ajayi-Kadir revealed staggering figures. He explained that a medium-sized company utilizing 700kw of electricity would face an annual bill of approximately N1.4 billion under the new tariff. This places Nigeria among the top three countries with the highest electricity costs, despite the insufficient supply.

The OPSN emphasized that the tariff hike comes at a challenging time, amidst macroeconomic instability and infrastructure deficits. Ajayi-Kadir stressed that such a significant increase contradicts the previous tariff order and fails to reflect the current exchange rate reality.

In light of these concerns, the OPSN called for the immediate suspension of the new tariff implementation. They urged all stakeholders to engage in meaningful dialogue to establish a transparent mechanism for determining electricity tariffs.

While acknowledging government efforts in stabilizing the economy, the OPSN underscored the urgency of addressing the tariff issue to prevent further economic downturns.

They warned that the tariff hike would exacerbate inflation, reduce disposable income, and escalate unemployment and insecurity in the country.