The Manufacturers Association of Nigeria (MAN) and the Trade Union Congress (TUC) have strongly opposed the Federal Government’s proposed 65% increase in electricity tariffs and warned that the move would exacerbate inflation, cripple businesses and further strain Nigeria’s struggling economy.
The proposal comes amid persistent power supply challenges, high production costs and widespread economic hardship.
Manufacturers Warn of Economic Fallout
The Director-General of MAN, Segun Ajayi-Kadir, cautioned that the planned tariff hike would increase production costs, weaken the competitiveness of Nigerian goods and push more businesses towards closure.
“Electricity is a critical input in manufacturing processes with a significant impact on production cost and prices of products,” he said.
Ajayi-Kadir noted that successive tariff increases have not translated into improved power supply, adding that the privatization of the power sector in 2013 had failed to yield the expected results.
“Unfortunately, this privatization has not yielded any result. It is widely believed that this is because the operators in the value chain lack the technical and financial capacity to operate and deliver optimally,” he said.
He added that despite limited electricity generation capacity, consumers have had to endure frequent tariff hikes without improved service delivery.
“Despite the inability to meet consumer demand, we have witnessed consistent increases in tariff without a commensurate and good quality supply.”
According to data from the National Bureau of Statistics (NBS), electricity supply declined from 5,909.83 GWh in Q2 2023 to 5,612.52 GWh in Q2 2024, following a 230% tariff increase.
Ajayi-Kadir further stated that Nigeria needs at least 30,000MW of electricity to meet its industrial and domestic demand, yet the country struggles to generate an average of 4,000MW daily.
He warned that forcing businesses to absorb the cost of inefficiencies in the power sector would be disastrous, as manufacturers cannot pass the increased costs to consumers, who are already battling low purchasing power.
“As it stands, manufacturers are disadvantaged, as the increase cannot be transferred to consumers who are battling with low purchasing power.”
TUC Calls Tariff Hike ‘Economic Oppression’
The Trade Union Congress (TUC) also condemned the proposed 65% electricity tariff increase, describing it as an unjustifiable burden on Nigerians.
In a communiqué issued at the end of its Q1 2025 National Administrative Council (NAC) meeting in Abuja, the TUC warned that another tariff hike would further squeeze households and businesses already struggling under severe economic conditions.
“It is alarming that the government is considering this hike when the previous increment has already inflicted severe hardship on citizens,” said TUC President, Festus Osifo.
“This proposed increase is not only ill-timed but also a deliberate act of economic oppression against Nigerians, who are already struggling under unbearable economic conditions.”
Kaduna Government Intervenes in Power Sector Dispute
Meanwhile, the Kaduna State Government has stepped in to mediate in the ongoing industrial dispute between Kaduna Electric and its workers’ union, which resulted in a four-day power outage affecting consumers across the state and other franchise areas.
Deputy Governor Hadiza Balarabe held a meeting with representatives of the union and Kaduna Electric’s management at Sir Kashim Ibrahim Government House, urging them to reach a resolution and restore power to affected communities.
“We implore you to find a way to resolve this dispute quickly. The people of Kaduna are suffering, and we cannot afford to have this outage continue,” she said.
The National Union of Electricity Employees (NUEE) stated that while it was not opposed to the downsizing of workers, it insisted that due process must be followed and all entitlements must be paid.
Kaduna Electric’s Managing Director, Umar Hashidu, explained that the company had to lay off 444 workers as part of its restructuring efforts to remain financially viable.
“We had to take this decision to ensure the survival of the company. We cannot continue to operate at a loss,” Hashidu said.
Concerns Over Power Sector Reforms
Industry analysts argue that the government must address fundamental inefficiencies in the power sector before implementing another tariff increase.
Ajayi-Kadir advised the government to:
- Review the performance of the DisCos following the previous tariff hike.
- Conduct an impact assessment of the tariff increases on the manufacturing sector and businesses.
- Audit the financial commitment of DisCos to power infrastructure and their level of investment in improving electricity distribution.
The debate over rising electricity tariffs underscores broader concerns about Nigeria’s power sector, economic stability, and cost of doing business.
