▪︎From right: MAN President Francis Meshioye; Segun Ajayi-Kadir, Director-General of MAN and Chairman of NERC, Sanusi Garba.
In the past year, a significant discussion arose involving the Manufacturers Association of Nigeria (MAN), the electricity Distribution Companies (DisCos), and the industry regulator, the Nigerian Electricity Regulatory Commission (NERC).
On April 3, 2024, NERC approved an increase for customers categorized under Band A, who receive 20 hours of electricity supply daily, setting their tariff at N225 per kilowatt.
The Minister of Power, Mr. Adebayo Adelabu, supported this increase, indicating that the federal government could no longer sustain subsidies on electricity, necessitating the adjustment in tariffs.
However, MAN strongly opposed the tariff increase, arguing that the imposition of the tariff hike solely on Band A consumers while excluding other categories constituted unfair discrimination.
Furthermore, members of MAN expressed concerns regarding the ongoing high energy costs and frequent electricity tariff increases, which they reported accounted for 40 percent of their production expenses.
In light of these challenges, MAN urged the DisCos and NERC to consider a downward review of the tariffs, emphasizing that many of its member companies would struggle to remain viable under the new rates.
Segun Ajayi-Kadir, the Director-General of MAN, stated, “We petitioned NERC as required by law, but during the consideration of our petition, many of our factories faced disconnection, particularly from the Abuja Electricity Distribution Company (AEDC).”
He elaborated on their predicament, explaining that despite seeking legal recourse to prevent disconnections during the dispute, they encountered difficulties, which ultimately resulted in a court judgment that dismissed their case.
Reports indicate that MAN initiated legal action, under suit number FHC/L/CS/881/2024, against both NERC and the 11 DisCos operating in Nigeria. The DisCos involved include the Abuja Electricity Distribution Company Plc, Ibadan Electricity Distribution Company Plc, Eko Electricity Distribution Company Plc, Ikeja Electricity Distribution Company Plc, Kaduna Electricity Distribution Company Plc, Kano Electricity Distribution Company Plc, Jos Electricity Distribution Company Plc, Benin Electricity Distribution Company Plc, Enugu Electricity Distribution Company Plc, Port Harcourt Electricity Distribution Company Plc, and Yola Electricity Distribution Company Plc.
In its petition, MAN requested that the court mandate the DisCos and NERC to maintain the previous electricity tariff rates.
On June 10, 2024, the court issued an interim order prohibiting all DisCos and NERC from increasing tariffs and required MAN to continue paying the old rates. Additionally, the court restrained the DisCos from taking further action, including disconnections, until the matter was resolved.
The presiding judge, Justice Lewis Allagoa, advised all parties to focus on the core issues rather than engaging in frivolous applications.
The judge also proposed an expedited hearing to achieve a resolution before the court’s summer recess in July, provided all parties consented. Ultimately, all present parties agreed to expedite the hearing.
Our next line of action on electricity tariffs is that we will not stop advocating for a reduction. I don’t see any logic in having an increase of 250 percent at a go.
The case was adjourned to July 8, 2024, for the hearing of preliminary objections and MAN’s originating motion.
However, later reports confirmed that a Federal High Court sitting in Lagos struck out the case on October 7, 2024. In its ruling, the court determined that MAN’s suit constituted an abuse of court process, having been filed prematurely and without adherence to the provisions of Section 51 of the Electricity Act 2023.
The court further noted that MAN had not sufficiently pursued available dispute resolution mechanisms and ruled that the case lacked a reasonable cause of action. Consequently, the suit was dismissed for not being instituted by established legal procedures.
MAN had challenged the minor review of electricity tariffs by NERC and filed its lawsuit in the Lagos Judicial Division of the Federal High Court.
The association sought four specific reliefs: that the due process outlined in the law for tariff review had not been followed before AEDC and other DisCos could apply for the tariff increase on July 31, 2023.
Moreover, they asserted that the necessary regulatory requirements for implementing tariff reviews had not been adhered to before NERC issued the Suppissuedry Order on April 3, 2024, and the subsequent rate revision on May 6, 2024. MAN highlighted that the defendants were obliged to follow proper administrative procedures for tariff reviews before enacting the April and May Supplementary Orders.
In response, NERC objected to MAN’s suit, contending that it represented an abuse of court processes and had been filed hastily and prematurely without complying with legal protocols.
On January 15, 2025, Otunba Francis Meshioye, the President of MAN, addressed the evolving situation concerning tariff reviews and the implications for both manufacturers and consumers alike.
Meshioye maintained that the advocacy against high tariffs will be sustained until justice is served.
He said the advocacy would continue in 2025 as the high costs continue to pose a challenge to manufacturers.
Meshioye decried the 250 percent increase in electricity tariffs that the association earlier petitioned, describing it as “not palatable and not logical.”
He emphasized the need for a more gradual approach to tariff adjustments, noting the detrimental impact of the hike on businesses.
“Our next line of action on electricity tariffs is that we will not stop advocating for a reduction. I don’t see any logic in having an increase of 250 percent at a go.
“We believe there should be a roundtable discussion to reduce this tariff. An increase is fine, but definitely not astronomically at 250 percent.
You can always set a timeline to graduate the tariff and achieve that goal,” said Meshioye. ▪︎