The preference for importation of goods and services is still very much prevalent in Nigeria, despite the push by the Nigerian government for its citizens to purchase made in Nigeria products.
Even as the country looks forward to the mass metering to be provided by the meter asset providers (MAPs), 70 percent of the 4.7 million metering gap is still expected to be met by importation.
According to the country’s electricity regulatory body, Nigerian Electricity Regulatory Commission (NERC), MAPs are to source a minimum of 30 percent of their contracted metering volumes from local meter manufacturing companies.
Stakeholders in the electricity industry have called for increased local participation in the production of meters in order to drive local content in the industry, while creating and adding value and growth to the economy.
Chantelle Abdul, managing director, Mojec International at the inauguration of the company’s Meter Box and other Plastics factory said that “from our meter asset provider (MAPs) policy, 70 percent of meters are expected to be delivered through importation while 30 percent is local production.”
The reason for dependency on importation of meters is that local manufacturers don’t have the capacity to produce enough meters to bridge the metering gap in Nigeria. Inadequate financing, lack of incentives provided by government, favorable business environment are the key challenges, and are responsible for the low participation of local meter manufacturers.
On the issue of financing, meter manufacturers like any other manufacturer in Nigeria are bedeviled by several obstacles but a major one is low access to competitive and inexpensive financing.
The central bank of Nigeria (CBN) recently announced that banks are to give manufacturers loans at 9 percent but interest rates on credit facilities given to manufacturers are usually within the 20 percent range, making it very
hard for businesses to operate efficiently.
Abdul appealed to the federal government to assist local manufacturers by formulating policies that would encourage cheap financing, which could go a long way to make meter accessible to the people.
“If we have a market of about six million metering gap, this means only two million meters are allowed to be
provided locally and that can easily be done by Mojec alone,” she explained.
She also added that there are over six local meter manufacturers, who have the facilities to adequately produce meters from the start to finish.
Also the business environment in Nigeria is highly unfavorable because of the high level of nepotism and bureaucracy. In the World Bank’s ease of doing business ranking, Nigeria was ranked at 145th, out of 190 countries.
The federal government has expressed its commitment to changing this and easing business activities in the country.
Israel Bamidele, an energy lawyer said that “the federal government should encourage local meter manufacturers who can add growth and development in the country, because enabling meter manufacturers will have a reverberation effect on the country, as it would not only address the metering gap but also play a determining role in solving the electricity crisis the country is experiencing.”
It would also be a positive development for manufacturers, as a whole, he noted.
Abdul added that “local companies can produce meters that can meet global standard, which could consequently help in reversing the government policy on local meter manufacturing.”
Frontpage September 12, 2017