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Electricity Tariff Adjustment: Assessing the Socio-Economic Consequences on the Manufacturing Industry in South-South, Nigeria

DOI : https://doi.org/10.36349/easjecs.2026.v09i01.002
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The manufacturing sector is globally considered a crucial engine room, which plays a strategic role in value addition, economic development/diversification, industrialization and employment generation. However, in Nigeria, this sector, operates far below optimal capacity, largely due to chronic deficiencies in energy supply and affordability. Manufacturers in Nigeria face energy expenditures that constitute a significant portion of total production costs, with resultant negative impacts on the economy. This study investigates the socio-economic consequences of electricity tariff adjustments on the manufacturing industry in South-South region of Nigeria, with particular emphasis on production costs and productivity. Empirical evidence indicates that manufacturing firms continue to experience unreliable electricity supply, compelling reliance on alternative power sources that substantially raise operational expenses. The results show that rising electricity tariffs significantly increase overhead and total production costs and adversely affect productivity, thereby constraining output efficiency and competitiveness within the sector. Inferential and regression analysis reveal a strong and statistically significant positive relationship between electricity tariff increases and manufacturing production costs, confirming that higher tariffs are closely associated with escalating production expenses. This substantial explanatory power underscores electricity tariffs as a dominant determinant of manufacturing cost structures in Nigeria. The findings establish that increased electricity tariffs, compounded by persistent supply unreliability, significantly elevate production costs and reduce productivity in the manufacturing sector. The study therefore, concludes that electricity tariff policies have direct and measurable implications for industrial performance and sustainability, highlighting the need for policy frameworks that balance cost recovery with the operational rea

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Distinguished Professor of Haematology Head — Experimental, Historical & Sensory Haematology Vlad the Impaler University, Wolf’s Lane, Wooden Stakes Grove 666, Transylvania.

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