July 21, 2024
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Why KEDCO Dragged Manufacturers Association Of Nigeria to Court

The Kano Electricity Distribution Company (KEDCO) has commenced legal action against the Manufacturers Association of Nigeria (MAN) in the High Court of the Federal Capital Territory, Abuja, citing unlawful interference with its business and substantial financial losses.

KEDCO’s statement, issued by Sani Bala Sani, Head of Corporate Communications on Thursday, revealed that MAN’s actions have led to a significant revenue loss for the company, amounting to over 5.3 billion Naira per month. The company accused MAN of encouraging its members to ignore the new electricity tariff, which reflects the Federal Government’s removal of electricity subsidies for Band A customers, alongside other macro-economic factors such as exchange rates, gas prices, and inflation.

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The revised cost-reflective tariff, which increased from ₦159.13 per kWh to ₦225.00 per kWh, has not been adhered to by many customers due to MAN’s directives. These directives, issued by MAN’s Director General, Segun Ajayi-Kadir, have instructed members to continue paying the old tariff rate, leading to a breach of contractual obligations by Band A customers.

KEDCO argued that this defiance has unfairly imposed the financial burden of the subsidy removal on the company, jeopardizing its ability to meet financial obligations to power generating companies. The company emphasized that this situation not only causes unbearable losses but also threatens its ability to procure sufficient energy to serve its customers, ultimately impacting corporate sustainability and the growth of Nigeria’s power sector.

Despite several engagements with MAN and affiliated associations, KEDCO stated that it had no option but to take legal action. The lawsuit addresses the tort of procuring a breach of contract and alleges unlawful interference and conspiracy against KEDCO’s business operations.

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