Manufacturers Association of Nigeria (MAN) has expressed deep concern over what it described as “impending displacement of local meter manufacturers and assemblers in the downstream Nigerian power sector”.
In a statement, the Manufacturers umbrella body said it’s concern is fueled by the biased implementation of the World Bank funded National Mass Metering Programme (NMMP) phase two.
The programme is intended for supply and installation of 1.250million smart energy meters to eleven electricity distribution companies operating in the country following the bid; DRE-PPI with credit no. 9206-NG, Project no. P172891.
According to the statement, the financial demands and technical requirements specified by the Transmission Company of Nigeria (TCN) are are too stringent for local manufacturers to meet.
MAN noted that the development portends danger for the power sector and negates the earlier intention of TCN to create employment opportunities for the locals.
The full text of the statement is reproduced hereunder:
We are deeply concerned over the impending displacement of local meter manufacturers and assemblers in the downstream of the power sector in the process of government’s implementation of the NMMP Phase II World Bank funded supply of 1.2million smart energy meters.
The advertised financial requirements and the technical specifications by the Transmission Company of Nigeria (TCN) appears to be skewed against local manufacturers as they are outrageously stringent and negate the CBN guidelines for the implementation of National Mass Metering Programme (NMMP).
This is a federal government intervention in power sector to accelerate energy meter supply in the country to bridge the metering gap and ought to be in sync with our overall national economic development objectives.
We warn that this portends grave danger for the power sector as we may be witnessing a repeat of the ugly scenario in 2012 when local manufacturers where sidelined in the meter supply and the nation was greeted with supply of substandard meters supplied by the foreign companies that were awarded the contract that were later removed from the network.
The position of the TCN that installation will provide employment opportunities to Nigerians will completely pale into insignificance when compared with a ratio of 1 to 10 jobs that will be created if local manufacturers are included in the scheme.
It should be recalled that, in keeping with the Federal Government’s backward integration policy and the advent of the NMMP intervention, manufacturers have made huge investments in expansion of manufacturing capacities…
Trained and promoted highly skilled workforce to meet the demands of the power sector as envisaged in the NESI.
The seeming intentional denial of the local manufacturers does not take into cognizance their sterling performance of the nascent local manufacturing, vis:
i) Deployment and installation of a total number of 611,231 energy meters across the country between January 2019 till 31st January, 2021.
This is corroborated by the report of the Regulatory Agency, the Nigeria Electricity Regulatory Commission, NERC, under the Meter Assets Provider (MAP) initiative of the federal government.
ii) The deployment and installation of 1million energy meters across the country under the phase zero of the National Mass Metering Programme (NMMP).
This is under the Federal Government intervention aimed at increasing the metering rate to eliminate the inglorious and arbitrary estimated billing and strengthening the local meter value chain, as well as creating jobs.
Ofcourse this has also helped in reducing collection losses and increasing financial flows to achieve 100% market remittance obligations of the Discos and improving network monitoring capability and availability of data for market administration and investment decision making.
It should recall that our members have been denied the opportunity to fully execute the contract for the supply and installation of 4m energy meters under the Phase 1 of the NMMP scheme.
This was due to the unrealistic terms that arbitrarily fixed the contract prices extremely and far below the approved regulatory prices of energy meters in the country.
Additionally, the contractual term of payment after the supply and installation of the meters have not been adhered to, thereby jeopardizing the financial capabilities of our members that participated in the scheme.
We opine that the subsisting Executive order 003 on patronage of made in Nigeria products and the avowed policy of government to give priority and first consideration to local businesses should have made the government to interrogate the world bank documents and actively consulted/engaged Nigerian stakeholders in the sector with a view mainstreaming their inputs.
This is clearly the cardinal aspirations of the NMMP scheme, which is to strengthen the local meter value chain by increasing local meter manufacturing, assembly and deployment capacity as well as to support Nigeria’s economic recovery by creating jobs in the local meter value chain.
As a nation that aspires to make progress and improve the wellbeing of its people, it is unconscionable that we continuously make the same mistakes.
The overbearing government control over the energy meter procurement and pricing has continued to limit meter availability and almost treacherously hindered the factualization of the forces of demand and supply in the determination of the prices of meters.
It has stifled the emergence of healthy competition in the meter manufacturing and pricing ecosystem, which should have created more job, upscaled technology, innovation and skills, as well as an expansive value chain across the country.
We counsel that the excellent constitutional amendment that enlisted power generation and transmission in the concurrent list, should be complemented with the liberalization of the distribution end of the value chain.
To this end, the energy meter procurement and pricing should be liberalized. There is no doubt that Nigerians are in dire need of and are desirous of procuring meters, they have only been limited by the unwarranted and stringent processes of applying for energy meters by the DisCos, as well as the indiscretion of some of their operatives.
We are convinced that the liberalization of the distribution end of the value chain will eradicate these bottlenecks and give fillip to the efforts of government to bridge the metering gap and ensure just electricity billing regime.
Segun Ajayi-Kadir, mni
Director General
