MAN - Manufacturing Sector Will Experience Growth With 2023 Electricity Act

The Manufacturers Association of Nigeria (MAN) supports the newly signed 2023 Electricity Act by President Bola Tinubu, hoping that it will benefit the country's manufacturing industry.

In an official statement, MAN stated that Nigerian manufacturing has long experienced poor results due to low access to energy.  

However, with the Act, manufacturers will have easier access to electricity. The development of renewable energy capacity is expected to further facilitate better results in the manufacturing sector. 

Part of MAN’s statement read: 

“In light of the huge energy deficit occasioned by the age-long challenges in the power sector, newly inaugurated President Tinubu’s administration has set the ball rolling by signing the Electricity Act 2023, which is meant to be a game changer to address the numerous constraints within the sector. 

“The new Act adequately addresses the challenges in the power sector, and we are quite optimistic that such development will encourage the inflow of manufacturing foreign direct investment (FDI), boost the performance of the sector, and increase the sectorial contribution to the economy.   

“For manufacturers, investment in renewables like solar will not only promote a cleaner climatic environment but ensure that energy consumption is cost-efficient. The cost savings will directly improve profit margin and promote further manufacturing investments.”  

According to MAN, Nigeria's electricity market is one of the largest in the world due to the country's large population and rising need for energy by homes and companies. The Association listed some additional benefits of the Act for its members: 

A Reduction in Tax Burden of Manufacturers

If the total amount of internally generated income (IGR) that each state stands to gain from electricity sector decentralization is utilized wisely, it can help the lack of infrastructure in states without imposing additional tax burdens on manufacturers.  

Allowance for Self Generation

Because energy is the most important input for manufacturers, empowering private manufacturing enterprises to generate their own electricity will allow for huge investments in backward integration activities, which is going to be an important tool of energy security within the sector. 

Gives Small Manufacturers Leverage to Grow

According to MAN, if the 2023 Electricity Act is completely implemented, it has the potential to rewrite the story by stabilizing the supply of electricity to small manufacturers and assisting them in planning for efficient delivery. 

Sustainable Access to Electricity

MAN also emphasized the empowerment of state governments and private investors, which will accelerate the adoption of renewable energy and alter the power sector's governance structure. All of this, according to MAN, could boost investment while also improving access to electricity and encouraging economic growth.