Manufacturers seek Nigerian government bailout over N29bn electricity debt

Nigerian manufacturers are calling on the federal government to help resolve its N29 billion electricity tariff dispute with the electricity distribution companies (DisCos) and the Nigerian Electricity Regulatory Commission (NERC).

Segun Ajayi-Kadir, director-general of Manufacturers Association of Nigeria (MAN), made the appeal in Lagos yesterday while assessing the three years’ performance of President Muhammadu Buhari’s government.

The group is soliciting for financial help from the federal government in order to settle the dispute out of court by picking a part of the N29 billion debt.

“By the last count, I was told that cumulatively manufacturers owe the DisCos N29 billion and that is absolutely a crazy figure. We want the government to intervene and find an amicable solution to the issue so that the 2,000 megawatts that manufacturers ought to benefit from would be released and not hindered by this court process. The government can also pick up part of the bill as a matter of urgency to bail out the sector,” Ajayi-Kadir said.

According to him, the dispute arose because the DisCos and NERC (allegedly) failed to abide by the new Multi-Year Tariff Order (MYTO 2015) that was subsisting at that time.

The association later went to court to obtain an injunction restraining NERC and DISCOs from implementing the new tariff regime. MAN said that the tariff was too expensive for manufacturers and would lead to closure of many businesses.

He also said the eligible customer policy designed to help the manufacturing sector might not have the desired effect if N29 billion debt issue remains unresolved.

The eligible customer policy was targeted at enabling large consumers purchase power directly from the GenCos, instead of depending wholly on the DisCos.

He said that the policy would not work because MAN was told that for it to access the eligible customer scheme it must have a no debt bill with the DisCos.

Ajayi-Kadir said that the government should ensure factors militating against their workability, such as the debt issue, were tackled.

He added that” the current administration has done a lot, but still we expect the government to work more on allowing these initiatives to work, particularly in the areas of power. It is a dilemma for us in the manufacturing sector because the cost of power is high and we have the inadequate supply. I believe that government should work more on generation, particularly distribution.”