Merit Ibe
Following the recent approval of electricity tariff hike by President Muhammadu Buhari, which came with a 35 per cent one-year import tax waiver for increased metering, the Manufacturers Association of Nigeria (MAN) has raised concerns that the waiver will stymie local production.
President Buhari recently approved the increment of electricity tariff for selected consumers and ordered mass metering to end arbitrary charges emanating from estimated billing. To curb shortage of meters, the president approved a one-year waiver of 35 per cent import tax on prepaid meters.
MAN Acting Director General, Ambrose Oruche, who noted that this was not the best time to increase tariff when manufacturers were grappling with harsh environment and negative effects of the COVID-19 pandemic, also lamented that the waiver is not encouraging to companies assembling metres locally.
The association said the directive to defer 35 per cent import duties on importation of pre-paid meters is an incentive for mass importation of pre-paid meters as against up-scaling of production capacity of made in Nigeria meters.
He appealed to the Federal Government to review its decision to promote full local content in the manufacturing of pre-paid meters, adding that allowing such decision to run for a year would endanger government’s efforts at industrialising the country.
“The decision would dampen the hope of the local manufacturers as well as cripple the anticipated growth in the sector.”
Oruche advised that government should also fund and increase the capacity of manufacturers of the product to meet local demand, which will in turn create jobs and increase income.
“It is not the best option at all. When you take away the protective tariff and import from China, it will definitely discourage local manufacturers.”
He emphasised the need to strengthen local capacity to mass produce meters, and ‘protect’ local manufacturers.
“Nigerians have a lot of challenges owing to the COVID-19 pandemic and the situation requires that we do everything possible to make life easy for our citizens.
Minister of Power, Saleh Mamman on June 15 had disclosed that Nigerians would pay higher electricity tariff from July 1, but the leadership of the National Assembly waded into the controversy on the planned hike and convinced the Distribution Companies (DISCOs) to defer the plan till the first quarter of 2021.
Members of the National Assembly maintained that while the tariff increase was necessary, the timing was wrong as Nigerians are still reeling from the negative effects of the COVID-19 pandemic. The assembly insisted that consumers must be properly metered before any plan to hike tariff would be condoned, and given the economic impact of the pandemic on Nigerians, the timing for the tariff increment was wrong.