BusinessDay
NigeriaDecides2023

Meter manufacturers ask FG to review levies on imported finished electricity meters

Following President Muhammadu Buhari’s approval of one-year deferment of the 35 percent import levy on electricity meters to help improve Nigeria’s electricity meter deficit, the Electricity Meter Manufacturers Association of Nigeria (EMMAN) has asked the Federal Government to review its decision to promote full local content in the manufacturing of pre-paid meters.

The association says the directive to defer 35 percent import duties on importation of pre-paid meters is an incentive for the mass importation of pre-paid meters as against upscaling of production capacity of made in Nigeria.

According to Muyideen Ibrahim, secretary of the association he said the local manufacturers are not been patronised by Off-takers at the downstream of the power sector value chain because they are not prepared to cut corners.

Also a member of the association Kola Balogun, chairman of Momas Electricity Meters Manufacturing Limited and also a member of the Original Equipment Manufacturer (OEM) in the downstream of the power the sector, said that the 35 percent levy is the only protection that is available to them in the sector and it is not peculiar to the sector alone.

Balogun said the removal is an indication that the government is more disposed to favour importation to the detriment of our local industry.

“The the implication of this is that over 600million US dollars would be exported to China to import the approved 3million meters. This means we would further be developing another country’s economy and continue to increase unemployment, poverty and underdevelopment in our country.

He said EMMAN believes the presidential approval of tax deferment on the importation of 3 million finished electricity meters would have negative effects on the power sector.

Also Kunle Olubiyo, President ,Nigeria Consumer Protection Network, also said there is an urgent need for Federal Government of Nigeria to put in place a very strict regime of sanctions against Off-takers who have deliberately refused to accept indigenous technology and made in Nigeria pre-paid meters or pre-paid meters assembled in Nigeria.

Olubiyo noted metering devices in the electricity sector provides the end-users , the market players, participants and regulatory seemingly regulatory agencies a spectrum of energy, accountability, efficiency conservation and of course probity.

He said the issues of customers centricity, customers satisfaction, value for money, customers behaviours, customers short changed, liquidity challenges and prospects for reasonable returns on investments amongst others were all linked to effective metering and closures of the embarrassingly huge metering gaps

The group stresses that the deferment might set back the development that was already on ground while the decision would dampen the hope of the local manufacturers as well as cripple the anticipated growth in the sector.

It noted that as an in-depth manufacturer in the sector, it takes an average of three months to set up SKD (Semi Knock Down(SKD)/ Complete Knock Down(CKD) factory.

The association, therefore, advised the government that importers should be encouraged to set up factories so as to create a value chain that would provide employment opportunities to Nigerians.

It would be recalled that President Buhari considered and approved a one-year deferment of the 35 percent import adjustment tax (levy) imposed on fully built unit (FBU) electricity meters HS Code 9028.30.00.00 under the 2019 fiscal policy measures for the implementation of Economic Community of West African States (ECOWAS) common external tariff (CET) 2017 – 2022.

The approval for the adjustment followed a request by Zainab Ahmed, Minister of Finance, Budget and National Planning, to support the Nigerian Electricity Regulatory Commission (NERC) roll out 3million electricity meters under the Meter Asset Provider (MAP) framework.

MAP regulation is a gradual upscaling of the patronage of local manufacturers of electricity meters with an initial minimum local content of 30 percent with the potential of significant job creation in the area of meter assembly, installation and maintenance.

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