The operators said that over 65 per cent of private businesses, especially manufacturing sector and SMEs, may be forced to close down due to the high electricity tariff.

The Association called for the suspension of new tariff implementation to enable all stakeholders have meaningful dialogue around the process and method-ology of determining electricity tariff as well as jointly agreeing on the transparent mechanism re-quired for tariff setting.

It said Nigeria now ranks third after Germany and the United Kingdom on the list of countries with high electricity costs.

The Association, comprising top Business Membership Organisations (BMOs) Manufactures Association of Nigeria (MAN), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigeria Employers’ Consultative Association (NECA), Nigerian Association of Small-Scale Industrialists (NASSI) and Nigerian Association of Small and Medium Enterprises (NASME) representing more than five million businesses in Nigeria stated this in a joint release.

It said that “the OPSN has received numerous complaints from its member-companies on the implications of the recent astronomical increase in electricity tariff by the Nigerian Electricity Regulatory Commission (NERC) for Band A customers without the required and proper consultations with the private sector.

“This sudden exponential in-crease in the face of inadequate electricity supply, is inimical to the competitiveness of Nigerian products and businesses and will definitely exacerbate the impact of high cost of production. Meanwhile, the astronomical increase is against the MYTO Order referenced NERC/2023/05, which valued the cost-reflective tariff at N114.8/Kwh (determined using exchange rate of N919.39/$1).

It also does not reflect the current exchange rate reality that has seen the naira appreciated by 62.95 percent over the dollar in the last one month.”

It explained:

“A closer look at the impact of increase in elec-tricity tariff to N225/kwh (determined using exchange rate of N1463.31/$1) on the cost profile of a medium sized company using 700 kw revealed that the firm will need to pay about N1.4 billion per annum for electricity. In China, a similar medium sized company will pay a little over N24 million.”

It added that:

“What is most worrisome with the Nigerian case is the fact that the electricity to be supplied is not adequate. Also, the increase is coming on the heels of macroeconomic instability, infrastructure deficits, as well as other supply side constraints limiting the performance of the productive sector.”

The session will hold under the theme “sustainable development of the agricultural sector for national well-being” at the 38th edition of the Omolayole Management Lecture (OML). The OML honors one of Nigeria and Africa’s outstanding business and management icons, Dr. Michael Omolayole, the first Nigerian Chairman/Managing Director of Lever Brothers Nigeria Plc. (now Unilever Nigeria Plc.) and the only African to sit as a member of the Board of Advisors of AIESEC International in Brussels.

Speaking ahead of the event, Olubunmi Abejirin, the event convener, and President of the AIESEC Alumni Nigeria, said that the OML series is held annually in honor of Dr. Michael Omolayole in recognition of his numerous contributions and selfless service toward the development of the indigenous managerial leadership in multinational companies across Nigeria and the exemplary roles he played towards nation building through management and education. 

“Dr. Michael Omolayole was the first Nigerian Chairman/Managing Director of Lever Brothers Nigeria Plc. (now Unilever Nigeria Plc.); he is also the first and only African to seat as a member of the Board of Advisors of AIESEC International in Brussels. As a Consultant to the World Bank, Chairman/Director (past and present) of numerous multinational companies, former Member Presidential Advisory Committee, and Member, The Committee of 25 on Higher Education in Nigeria; his contributions through service to humanity are invaluable. Dr. Omolayole imbues the core values of AIESEC, such as striving for excellence, demonstrating integrity, activating leadership, acting sustainably, enjoying participation and living diversity”, she noted.

The lecture will have in attendance guests from diverse sectors of the economy, including CEOs of top corporations, management gurus, related government agencies, and financial institutions, and a keynote speech from Dr. Muda Yusuf, the Chief Executive Officer of the Center for the Promotion of Private Enterprise (CPPE).

The event, which is being sponsored by the Bank of Industry (BOI), will host other local and international speakers and holds at the NECA Auditorium on Thursday, September 29, 2022.

Abejirin stressed that the lecture continues OML’s focus on promoting best management practices and corporate governance, as well as the 38th edition of the conference and its focus on food security.

She mentioned that the annual lecture is a brainchild of AIESEC Alumni Nigeria in partnership with four other institutions where Dr. Omolayole played a significant role.

The partners include the Chartered Institute of Personnel Management (CIPM), Nigeria Institute of Management (NIM), and Nigeria Employers’ Consultative Association (NECA). “AIESEC Alumni Nigeria (AAN) is a nonprofit organization and the world’s largest youth-run leadership organization that helps university students explore and develop their leadership potential. It has a presence in over 1,700 universities across 110 countries and territories. AIESEC aims to promote social understanding, management skill development, entrepreneurship, and transformative youth leadership through its core values which are striving for excellence, demonstrating integrity, activating leadership, acting sustainably, enjoying participation, and living diversity”, Abejirin said.

Nigeria’s debts rose by about N4 trillion in the past five months to take the portfolio to N45.25 trillion.

National Bureau of Statistics said weeks ago that the urban inflation rate stood at 20.95 percent, which is 3.36 percent higher compared to the 17.59 percent recorded in August 2021.

Added to these myriad of fiscal challenges is that Nigeria does not have the financial capacity to fund its next budget.

Because of these, Nigeria Employers’ Consultative Association, NECA, warned against more borrowings that will comatose the country.

In a statement in Abuja yesterday, NECA cautioned the Federal Government against further borrowing, contending that the nation is faced with acute and s,elf-inflicted revenue challenges and a rising debt profile, among many other economic headwinds.

They noted with dismay that even with the nation’s current level of indebtedness, the Government is still poised to borrow over N11 trillion to finance the 2023 national budget.

NECA stated: “Organized businesses have witnessed varied challenges in recent months. From shortage of FOREX, stringent regulatory environment to non-alignment of fiscal and monetary policies, which when combined makes doingthe business difficult.

“It is obvious to all discerning stakeholders that the nation is faced with acute and self-inflicted revenue challenges and a rising debt profile, among many others. Even with the nation’s current level of indebtedness, the Government is still poised to borrow over N11 trillion to finance the 2023 national budget.

“Currently, the Government had made a cumulative expenditure proposal of over N19 trillion in the 2023 national budget, a 15.4 percent increase over the 2022 estimate.

While it is necessary and critical to generate revenue to fund not only the 2023 national budget but also to liquidate the interests accruing on the debts, Government will do well not to further burden the Real sector with additional taxes and stringent regulatory environment”

It also has hinted that most businesses in Nigeria are now on the brink of collapse under the pressures from the economic policy environment.

The organization lamented that at the last count, organized businesses are presently faced with over fifty different taxes, levies and fees at all tiers of government, some of which are duplicated.