As Nigerians are coming to terms with the recent upward adjustment of the price of electricity in the country, the Manufacturers in Northern Nigeria`s biggest Industrial city, Kano, who are the dominant industrial users of the commodity in the state, says the hike connote grave consequences for most of the industries struggling to survive in the state.
The manufacturers are of the view that while most of them are in support of the Federal Government moves towards boosting the electricity in the country, they are, however, against the about 100 percent price hike announced, which they are arguing could put them out of production, if not properly implemented.
The Nigerian Electricity Regulatory Commission (NERC) had at the beginning of the month announced a tariff for electricity consumers across the country which scale up the price from the initial N30.23 for one Kilowatt (kWh), unit of energy per hour) to N62.33 per kWh.
Under the new tariff, consumers in Kano that are categorized under industrial users who are believed to be currently enjoying about 20 hours of electricity per day, have got the price of the electricity they consumed hike up from the initial price of N42.45 kobo to N70.17 kobo.
Speaking on the new electricity price as it affects manufacturing in Kano, Sani Hussaini Sani, who is the chairman of the Manufacturers Association of Nigeria (MAN) in the state disclosed that no member of his group at the moment is strong enough to pay the new price of the commodity and still remain in business.
Sani noted that if the manufacturers in the state are to pay the new price, it would amount to them expending over 50 percent of the cost of production on electricity alone, which according to him, is not sustainable, and may force most of them to out of operation.
“In as much we are in support of some of the bold economic decisions of the federal government on Power Reform, this hike is coming at a time when the purchasing power of the people have been eroded tremendously by inflation, and the effects of the Covid-19 pandemic which we all are grasping with.
“This hike in tariff implies if we to remain in operation we must also hike the unit price of our products, and if we are to judge by the present low purchasing power of people only very few will be in the position to buy, so the alternative will be for us to start laying-off our workers.
“You know that we are businessmen, we cannot keep producing when they are no market to absolve what we are producing. So this is the reality that this increase in price is forcing on us, and we are becoming helpless”, Sani explained.
In the same vein, an Industry expert, who does not want his name printed told BusinessDay that the new price hike will be making electricity consumers in the state to be the highest unit price of the commodity when compared to other parts of the country.
He argued that there is nowhere in Nigeria today, apart from Kano and its environs where consumers will be paying over N70 per kWh, adding such as price is not even obtainable in Lagos which is Nigeria’s s economic capital.
The source said MAN has made representations to Kano Electricity Distribution Company (KEDCO) over this issue, but the response of the company was that the higher cost of the commodity in the state was because of their inability to make effective recovery from what was supplied to the state.
According to him, what it implies is that manufacturers in the state are to pay the price, it will amount to paying for the inefficiency of KEDCO, in the area of revenue collection they are now the ones to bear the burden of people consuming electricity freely in the state.
