Power sector can transform Nigeria into the industrial and investment hub of Africa-Balogun
Metering households has been a major challenge to stakeholders in the electricity sector in Nigeria. In the last few years, distribution companies have lost a huge amount of money through energy theft. MOMAS, a company that was incorporated in 1995, has stepped in to address these challenges. In this interview with TELIAT SULE, the chairman of MOMAS Group, KOLA BALOGUN, explains the steps being taken by his company to meter every household in the country: Excerpts:
Kindly provide a background to what Momas Group as a company is into. For how long has it been in business?
MOMAS was incorporated in 1995 and started from a humble beginning as a computer maintenance, training and engineering company which later metamorphosed into a metering and information technology solutions provider. As at then, the company was fully into importation of its metering supplies which was very profitable but because of its patriotic desire to reposition Nigeria towards national development, the company changed its ideology by deciding to bring down the technology into the country and commenced manufacturing of electricity meters which is less lucrative.
So, it became the first indigenous company to deploy, install and manage prepayment metering solution for Nigeria’s Power Holding Company, (erstwhile National Electric Power Authority) and since then it has executed several turnkey projects within the power sector with commendable successes through which it has carved a niche as a smart and robust service provider with prowess in innovation, research and development.
In 2011, the management decided to establish Momas Electricity Meter Manufacturing Company Limited (MEMMCOL), an indigenous company set up to produce energy meters, vending/billing management applications and support services. MEMMCOL has evolved to be a leading manufacturer in the downstream of the power sector in Nigeria and it is responsible for some of the notable inventions in the power sector like the locally developed software for electricity billing, auditing and reporting application, dual tariff energy meter, three (3) phase/maximum demand (MD) Din Rail smart electricity meters, various types of electricity meters enclosures, the Distribution Power Enhancement Panel (DPEP) for both 11kva and 33kva power sub-stations and the Momas Metering School (MMS).
The Momas Metering School (MMS) is the first of its kind in Nigeria and Sub-Saharan Africa and it was created to systemically bridge the manpower gap that is affecting energy metering technology deployment in order to facilitate best practices in energy metering and electrical installations in the power sector. It seeks to also empower the youth and individuals in the society.
It is in view of all the aforementioned achievements of the Momas Electricity Meter Manufacturing Company Limited (MEMMCOL) in the power sector, it was recognized and certified as Original Equipment Manufacturer (OEM) in the downstream of the power sector by the Federal Government of Nigeria and it has also won several awards both locally and internationally for its commitment to technological and human capital developments.
What motivated Momas to go into the electricity business and how many of those aspirations has the firm achieved?
Well, it was our patriotic ideology to serve humanity that led us into power sector. Initially, we were into importation of electricity meters and later we decided to take a bold step by going into its manufacturing which is less lucrative compared to the importation. Although, it has been able to establish itself as a force to reckon with in the sector but the core aspiration of getting the Federal Government to formulate the right policies to leverage to further the technological breakthrough we have put in place over the last two decades has not been achieved.
What is your view on Nigeria’s electricity roadmap? Is there any roadmap, if yes, how has it been implemented?
Well, there is an electricity roadmap in the power sector and it is targeted at ensuring that the entire value chain in the sector is kept running profitably and sustained. This is why the government through the Nigerian Electricity Regulatory Commission (NERC) has put policies in place to ensure that the identified metering gap in the country are bridged in order to guarantee revenue flow for the sector and also protect the interest of the consumers too by ensuring that they get value for their money through eradication of estimated billing.
And in the long run, government intends to use the power sector to stimulate industrial development and the economy at large. The Nigerian Electricity Regulatory Commission has over the last 10 years formulated different regulations to achieve the above and the most recent policy is the MAP/NMMP regulation which the commission just released. By this regulation, it allows for the Federal Government funded National Mass Metering Programme (NMMP) and the Meter Assets Provider (MAP) which allows for customers that cannot wait to be metered under the NMMP to be able to pay for meter. So, the new regulation allows for the two to run concurrently.
There are many players/stakeholders in the electricity sector. What are the challenges peculiar to each stakeholder? How do you think these challenges could be addressed?
Yes there are so many players/stakeholders in the sector and below are some of their challenges:
• Lack of uniform specification policy for electricity meters in the country based on our peculiarity. Today, we have different types of electricity meters in the country and when you have a distorted system, there cannot be meaningful development. This is the way to go if we are serious about achieving the desired development in the sector as it will create huge job opportunities for our youths because the local manufacturers will have a proper direction in their production processes and it will minimize the production time of producing different specifications for different DISCOS. Furthermore, markets will be guaranteed for various meter components, parts and accessories for the manufacturers, it will encourage more investors to come into the sector. It will bring about technological transfer, standardization and there will be technological development in the sector as well as the country at large.
• Real manufacturing in the sector is not viable based on the current policies on ground because there is no clear cut incentive in place to encourage manufacturing in the real sense of it. For instance, the only available government incentive for manufacturers is the Import Duty Exemption Certificate (IDEC) and it entitles manufacturers to import their raw materials at 0% import duty while VAT and other port charges are applicable. This IDEC policy was reviewed recently by the Federal Ministry of Finance to compel manufacturers to pay into the TSA, 5% of the duty waived.
• Whereas the Recognition Status Incentive for CKD/SKD Assemblers as also put in place by the Federal Ministry of Finance, entitles them to import their products at 5% Import Duty, 0% VAT and other port charges. So when you compare the above policies, the margin between an OEM manufacturer and CKD/SKD Assembler is less that 5% and if you look at it from the fact that the tariff payable on the various raw materials which manufacturers import to do production and the one-off tariff payable on an SKD/CKD meters, you will see that there is no margin at all. In fact manufacturers get to pay more and when you add the overheads from the various value chain, manufacturers are running business at a loss. And there is wide margin between a manufacturer and an assembler in terms of what real manufacturing entails and it ranges from the technology acquisition which is priceless, research and development, equipment and machineries, training and retraining. All these must be factored into proper tariff structures payable by the different players in the sector.
• The policy of obtaining import permits from Standard Organization of Nigeria and National Agency for Food Drug Administration and Control (NAFDAC) to import raw materials that will be processed into a finished product that must compulsorily be subjected to testing and certification by Nigerian Electricity Management Services Agency (NEMSA) is another issue affecting processing of Form M. Because of these permits, it takes an average of over a month to process Form M to import the raw materials. This is something we have discussed with the Federal Ministry of Finance, Budget and National Planning and the Federal Ministry of Trade, Industry and Investment on the need to excuse genuine recognized manufacturers from the rigour of obtaining aforementioned permits to accelerate production processes.
• There is need for objective consideration of the timeline for the importation of all the necessary components/raw materials necessary to produce electricity meters and the process time in the manufacturing of electricity meters, For instance, in China, manufacturing of electricity meters in bulk takes an average of three months despite the fact that all the required components are readily available there.
• The Nigeria Customs Service needs to be more supportive in the clearing of the imported components for electricity meters manufacturing and assembling. We have noted during the phase zero of the NMMP the difficulties of clearing meter components with the Nigeria Customs and there is need for all the stake holders to define and agree on what constitute SKD and CKD electricity meters.
Other challenges are:
• Knowledge gap and genuine commitment on the part of the policy makers in addressing core issues as they affect the sector;
• Lack of political will on the part of the Federal Government to implement its ease of doing business policy;
• Continual devaluation of Naira is seriously affecting businesses as it is creating uncertainty in business environment.
Metering of households in Nigeria is still a major challenge. How do you think this problem could be solved? How is MOMAS addressing this challenge?
The on-going initiative by the Federal Government tagged the National Mass Metering Programme (NMMP) and the existing Meter Assets Provider (MAP) schemes are steps in the right direction. And if government can also go further to address some of the fundamental issues mentioned above, metering Nigerian households will be seamless and other objectives will be achieved.
Momas is actively involved in the entire schemes and in a bid to support the current intervention by the Federal Government in the power sector tagged the National Mass Metering Programme (NMMP) which was initiated to bridge the identified 10 million metering gap in the country, MMS single headedly undertook the training of 300 (Three hundred) graduates drawn across the six geo political zones in the country through various state governments on meter installation in 2020 on pro bono at no fee with free accommodation, feeding, tools bag and other incentives. The students were graduated in December 2020 to commemorate its Silver Jubilee Anniversary. We are committed to continue with this initiative.
Momas trains personnel in the electricity sector. How do you identify the needs of each player in the electricity sector? How many people have you trained and how much does it cost on average to undergo your training programs?
Installation is one aspect of metering that is common with all the players in the sector hence this is why we embarked on the training of the 300 personnel to bridge the manpower deficient in the sector.
Thus far, we have trained 550 personnel and the cost of training with the kits that we provide to them after the training is about N250,000.
Tell us more about your meter production processes. How many types of meters do you produce? What makes each meter type unique and for whom is each meter made?
Meter Production Processes:
Meter production process is divided into different sections: Plastic production where each of the different plastic parts is moulded using injection moulding technology. The plastic material used for energy meters is specially designed for strength and fire resistivity.
Afterwards, the different parts of the meter are pre-assembled, namely: the terminal block, which contains the current sensors; terminal contact and other electrical connections. The face cover contains the keypad (if required), and it displays the window and other parts.
This is followed by the soldering of the electronic components onto the PCB (Printed circuit board). This stage is divided into two- namely the soldering of the SMD (Surface mounted Device) components, which are the small electronic components that fit onto the PCB (Printed Circuit Board), and the soldering of the through hold components, which are larger components that have pins that go through the PCB board like the LEDs and transformers. After this is the soldering of the PCBA (PCB Assembly) which contains all the electronics components to the terminal block wires which contain the terminal block and current sensors. Then, the programming and testing follow. The meter is then calibrated which is a process that ensures accurate measurement of electrical energy by the meter. Finally we have the final configuration and packaging of the meter
Types of Meters:
All the meters are either single-phase or three-phase. For both single and three phase meters, we have the basic and smart compact meter; basic and smart PLC meters; Din rail PLC meters; MD (Maximum Demand) Meters, and dual tariff meters.
What makes each meter type unique?
Meters are designed to meet different customer needs and specifications. As a designer and manufacturer of meters, we are able to customize meters to meet even the most unique and peculiar customer requirements.
For whom is each meter made?
All meters serve the same purpose but the additional functionalities are usually dependent on customer’s specifications and requirements, as well as his or her budget.
The most generally used meter is the compact meter, but where the customer desires isolation of the metering unit from the end user, they go for the split PLC meter which gives the end user access only to a Customer Interface Unit, which means the meter can be installed at a secure location like high on a pole where the user cannot have easy access to it.
Where the end user requires remote communication, we give them the smart meters which use GPRS, 2/3/4G network, LoRa, Zigbee and other wireless communication medium.
Our special and proprietary dual tariff meter is for special customers who have two sources of power and want to bill the end user separately for the two sources. This product has had great success with private residential estates that have a private alternative power source, as well as the public utility. With this meter, they are able to charge a different tariff for the cheaper public utility, and another higher tariff for the more expensive backup power supply, so as to give their residents uninterrupted power supply.
What is the outlook for the nation’s electricity sector?
Generally, the power sector has a lot of potential and it is capable of turning the country into the industrial and investment hub for the entire Africa. But government needs to be serious and committed to provide enabling environment, infrastructures and policies for businesses to thrive.