Adewale Sanyaolu
Indigenous meter manufacturers have warned that the Federal Government’s one year deferment of 35 per cent import duty levy on imported meters could further deplete Nigeria’s foreign reserves by $600 million.
The warning came four days after 11 electricity distribution companies (DisCos) began implementation of a new tariff structure now widely condemned by power consumers and civil society groups.
The group under the aegis of Electricity Meter Manufacturers Association of Nigeria (EMMAN), said the policy was inimical to the growth and promotion of local meter production and national industrialisation policy.
EMMAN’s Executive Secretary, Mr. Muhideen Ibrahim, had argued that the directive to defer 35 per cent import duty on imported pre-paid meters was an incentive for mass importation of meters as against upscaling local production capacity.
The agitation is coming on the heels of President Muhammadu Buhari, recent approval of a one-year deferment of the 35 per cent import adjustment tax (levy) imposed on fully-built unit (FBU) electricity meters (HS Code 9028.30.00.00).
Government had said the policy was in consonance with the 2019 fiscal measures for the implementation of the Economic Community of West African States (ECOWAS) Common External Tariff (CET) 2017 – 2022.
The approval was specifically predicated on a request by the Minister of Finance, Budget And National Planning, Mrs. Zainab Ahmed, to support the Nigerian Electricity Regulatory Commission (NERC) in rolling out three million electricity meters, under the Meter Asset Provider (MAP) framework.
According to Ibrahim, local meter manufacturers are not being patronised by meter the off-takers (DisCos in conjunction with MAP) because manufacturers were not prepared to cut corners.
EMMAN, however, warned that the presidential approval on tax deferment for importation of three million finished electricity meters would have negative effects on the power sector, adding that allowing the influx of imported meters over the next 12 months was capable of jeopardising government efforts at industrialising the country.
The Association however , advised government that importers should be encouraged to set up factories so as to create a value chain that would provide employment opportunities for Nigerians.
Also speaking, Chairman of Momas Electricity Meters Manufacturing Limited (MEMMCOL), Mr. Kola Balogun, lamented that the 35 per cent levy which was the only protection for local manufacturers and not peculiar to the power sector alone and thus should be protected. A worried Balogun said the removal of the 35 per cent levy remained an indication that the government was more disposed to favor importation to the detriment of the local industry. “The implication of this is that over $600 million would be exported to China to import the approved three million meters. This mean we would further be developing another country’s economy and continue to increase unemployment, poverty and underdevelopment in our country. We are bold to say that we at MEMMCOL have the capability to bridge the metering gap if the right policy is put in place
This can be by way of financial intervention by the government whereby certain agreed per centage of the cost of meter supply would be advanced to us like the importers do with the Chinese and upon completion of installation balance payment would be made to us.’’
President , Nigeria Consumer Protection Network, Mr Kunle Olubiyo, also said there was an urgent need for Federal Government to put in place stringent sanctions against off-takers who deliberately frustrate patronage of indigenous technology or made in Nigeria pre-paid meters in preference for foreign ones. He noted that metering devices in the electricity sector provides the end users , the market players, participants and the regulator a spectrum of energy, accountability, energy conservation and probity. He said issues around customer satisfaction, value for money, customer exploitation, liquidity challenges and prospects for reasonable returns on investments amongst others were all linked to effective metering and subsequent bridge of the over five million metering gaps .
“As important as the vexed issue of metering is, there are other variables and extraneous factors if not addressed once and for all, the Nigerian Electricity Market shall remain in a vicious circle of stagnation. As electricity consumers, we have taken our time to present our position to Government of Nigeria through have a five page document titled, “Conditions Precedent to Increase in Electricity Tariff”.
As a matter of fact, what we need now is a downward review of the discriminatory and disparity in gas pricing methodology for different off-takers’’ According to him, consumers of electricity have been badly battered and impoverished by a cartel of energy cabals who are fiddling with the economic soul of Nigeria and holding the Nation by jugular thorough counterproductive business models.