…make recommendations for sustainability
The Manufacturers Association of Nigeria (MAN) said the signing of the Electricity Act 2023, by President Bola Tinubu, if well implemented, promises to be a major game changer for the manufacturing sector.
It, however, stated some of what it considered as favourable implications of signing the bill for the sector. These include reduced cost of alternative energy, competitive and lower electricity tariffs, improvement in inflow of Foreign Direct Investment (FDI) and Manufacturing Performance.
Others are increased Internal Generated Revenue (IGR), improved infrastructure and less tax burden on manufacturers, more investment in renewable, backward integration and energy security stable power supply and proper planning.
MAN described the action by the president as a major step towards the right direction, stating further that following the removal of subsidy, this is another reflection of the boldness and commitment of the new administration towards the diversification and decentralization of the power sector.
The association said that the empowerment of the State Governments and private investors, the adoption of renewable energy and the reformation of the governance structure of the power sector are capable of driving investment, improving electricity access and fostering economic growth.
It, however, gave some recommendations that must be considered to avoid truncating the potential benefits of the Electricity Act:
Tighten the security infrastructure as no investor wants to do business in a terrorized economy.
Render legal, financial and technical supports to state governments yet to establish electricity market laws.
State governments should partner with existing agencies and operators in the power sector as the costs of building new power distribution networks can render the investment less lucrative.
Streamline NERC and states’ regulations to avoid bottlenecks for multistate investors.
Address the uneven distribution of gas to avoid delay in states’ execution of mega-power projects.
While states concentrate on small confined democratized power supply systems, there is a need to have a long-term plan to ensure the national grid’s operational efficiency.
The success of the Act largely rests on its effective implementation. Therefore, new President should appoint a committed and incorruptible Minister of Power that has broad experience of operations and politicking within the power sector.
The power sector is highly capital-intensive. Therefore, there is a need to reduce the lending rate to encourage private investments in min-grids and renewable energy.
Quickly and adequately address the hitches surrounding the fuel subsidy removal by providing transparent palliative measures and socio-economic infrastructure that directly and immediately mitigate its untold hardship on businesses and the masses.
