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Prepaid Meters: Local Manufacturers Record 79% Under-Performance In NMMP

There are indications that the April 2021 target of providing one million prepaid meters to consumers under the phase zero of National Mass Metering Programme, NMMP, would not be met as indigenous producers have recorded 79 per cent under-performance.

The indigenous producers and others were expected to provide the one million meters under the NMMP as a strategy to increase domestic manufacturing capacity, additional jobs creation and conservation of scarce foreign exchange. But as at April 16, 2021, the producers were only able to supply 210,000 prepaid, indicating 21 per cent performance, to the various Electricity Distribution Companies; DisCos in the nation, according to the Nigerian Electricity Regulatory Commission, NERC.

However, this showed that 790,000 meters are still outstanding, representing an under performance of 79 per cent, meaning that the target, which was previously March 2021, would further be shifted forward to enable them deliver. It also means that many consumers would continue to bear the burden of estimated bills, especially as it would delay the taking off of phase one and two of the nation’s NMMP.

Nevertheless, in an interview with Vanguard, the Chairman of NERC, Mr. Sanusi Garba, said the commission had come a long way in ensuring that adequate prepaid meters were provided for consumers of electricity.

Specifically, he said: “The Nigerian Electricity Supply Industry, NESI, had what we call the Meter Asset Provider, MAP. That scheme was a regulation we issued in 2018 and it took effect in 2019, involving third party businessmen.

‘’We gave them permits, and they went to the DisCos and got contracts to supply, install and maintain meters for them.

‘’So, they are the ones that have a responsibility to install meters for every DisCo in Nigeria. That system is still working as we speak today. However, what happened was that when we now gave the permits to those MAPs, and then they got the contract with the Disco’s, each of them was given quantities of meters that they’re going to supply.

“In our regulation, we stated that each MAP must get at least 30 per cent of his meters from a local manufacturer, because we want to encourage local production, but the 70 per cent, they can import. So, they started, some importing, others buying locally to install the meters.

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“Along the line, government had a new policy, introducing an additional levy of 35 per cent import levy on imported meters, which affected the MAP because, at the time we agreed on the price of meters, the levy was about 10 per cent.

“This made the price of meters to become very expensive. Consequently, a lot of them stopped importation. Expectedly, the commission had to engage the Federal Minister of Finance, and Federal Ministry of Industries, and the Customs, and others.

‘’In the process of engaging the government, Mr. President now agreed to suspend that increase for a period of one year to allow the MAP to import about three million meters. However, by the time the President gave that order, there were no more meters being installed because the MAPs, had stopped importing. The few that they imported had been stuck at the ports. We had to write letters to secure their clearing.”

“Besides, it was at this point that the Central Bank of Nigeria, CBN, announced that it would provide loans to the DisCos under the NMMP. The programme is divided into three phases – zero, one and two. In other words, CBN said it would provide funding for one million meters under the phase zero of the national mass metering scheme, which focus on meters currently in Nigeria.

“We did not come by the one million prepaid meters arbitrarily. We looked at the capacity of the indigenous companies and MAPs, before coming up with the figure. It took a long rigorous process to come this far in the programme.  ‘’We remain optimistic that the companies will deliver, especially as we have started meeting weekly to review their performances, using our personnel, who send reports from different locations nationwide.”

However, the Managing Director, Mojec Meter Asset Management Company, Chantelle Abdul,  blamed the slow pace of metering in Nigeria’s electricity market on lack of capacity to rapidly deploy available meters to end users.

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Abdul stated yesterday that there was enough production capacity in-country to the demands for electricity meters in the market. She noted that Mojec alone had an installed meter production capacity of two million units per annum, far higher than the one million units target of the National Mass Metering Programme of the Federal Government.

She explained that for manufacturers, major challenge comes from lack of access to foreign exchange at the Central Bank of Nigeria for the importation of meter components.

She stated: “The utility is the client not the end user. The end user is my secondary client. So those of you who will get the meters eventually from us are secondary clients.  ‘’Our contractual obligation is three folds, produce, supply and install. The contract doesn’t conclude until it is installed.

“The mammoth task is the installation. Installation is crucial because you don’t just say lets hang these devices up and they are not properly installed then you are going to have even bigger problem on your hand”.

On what government should do to improve the electricity market, she said: “The support that is required is probably more at the Central Bank and coordination. We need a little bit more coordination at customs for instance, whenever the components that we bring in arrive that it be cleared very quickly. That can help in making things a lot faster.

“At the Central Bank there needs to be a lot more support in terms of Forex. You can imagine as a nation that is dependent on imports there is a higher demand on Forex but metering has to be prioritize in order for us to close the gap”. Abdul explained that because manufacturers had to source Forex at the parallel markets, the cost of meters had to rise above the current price.

“The current benchmark price for metering is at the CBN rate but most of those bringing the components are bringing them at parallel market rate. The price of a meter today is not cost reflective,” she added.

Source: Vanguard

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