Nigeria’s manufacturing sector is grappling with severe challenges, including rising energy costs, aggressive production expenses, and logistical constraints. Energy prices, especially petrol and electricity tariffs, have surged dramatically, with the price of petrol increasing by 430% and electricity tariffs jumping by 212% for Band A consumers in just a year. The April 2024 hike in electricity tariffs, approved by the Nigerian Electricity Regulatory Commission (NERC), has left manufacturers struggling to maintain operations, as production costs continue to soar.
In response, the Manufacturers Association of Nigeria (MAN) sought legal action against NERC and electricity distribution companies to reverse the tariff increase. MAN argued that the tariff review process violated legal procedures, discriminating against Band A consumers and burdening manufacturers unfairly. However, a court ruling in October 2024 dismissed MAN’s case, citing that it was premature and lacked a reasonable cause of action. The court held that MAN failed to exhaust dispute resolution mechanisms and did not follow due legal process, leading to the case being struck out.
The fallout from the high energy costs has been devastating for manufacturers, with rising production costs, low sales, and increasing unsold inventory threatening the sector’s survival. MAN’s president, Francis Meshioye, expressed concerns that the government’s policies are making manufacturing unattractive in Nigeria, exacerbating inflation and endangering jobs. He highlighted that without urgent government intervention, the manufacturing sector faces potential collapse.
