BREAKING NEWS, Power
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The federal government says it will not compel electricity distribution companies to patronise local meter manufacturing companies
| By Anayo Ezugwu | Aug 22, 2016 @ 01:00 GMT |
BABATUNDE Fashola, minister of power, works and housing, has said that the federal government will not compel the electricity distribution companies, Discos, to patronise local manufacturers of prepaid meters. His statement is coming in the wake of the growing need for prepaid meters in the country and call by experts that the Discos should patronise local meter manufacturers.
During a courtesy visit to Mojec International, a meter manufacturing plant in Lagos, Fashola insisted that commercial transactions could not be done by compulsion but by persuasion, reasoning and dynamics of the economy. The minister was, however, optimistic that the local manufacturers would be patronised by the Discos, stressing that it is high time indigenous stakeholders in the energy sectors were embraced.
Fashola added that with Mojec’s capacity to produce one million meters per year, the metering gap in the power sector would be bridged. “Look at the number of telephones that we have in Nigeria, most of them were produced in China. Imagine if we have the plants for their production here. With what we have seen in the factory, this may not happen in the power sector. I think that commercial things should be done by persuasion, reason and the dynamics of the economy,” Fashola said.
Explaining the reason why the distribution companies and the meter manufacturers should embrace persuasion and dynamic of the economy, Fashola said the strategy would make the power sector more competitive in terms of pricing and also competitive in terms of quality for the local market.
According to him, when the market is competitive in terms of pricing and quality, it will make more business sense to produce and patronise meters locally. He expressed delight that there are Nigerian companies that can meet the metering demand in the country but wondered why there is still a huge meter gap in the power sector.
On the challenges of local meter manufacturers, Chantelle Abdul, managing director, Mojec International, “One of our critical issues at the moment is lack of access to foreign exchange. A lot of our manufacturing inputs rely on goods abroad. As I mentioned during the minister’s visit, that my goal as a manufacturer is to produce much of my manufacturing input locally here in Nigeria so that we go as far as producing our chips and the PCB which is the brain of the meter and all other component that is required. There is nothing that stops us from producing the battery that we need, the capacitors that we need. It is sad to say that we don’t have factories that produced those things here in Nigeria,” Abdul explained.
She called for the support of the federal government both at Central Bank of Nigeria in the area of providing foreign exchange for the manufacturers. “We cannot afford to be borrowing at double digit rate, it will automatically increase the price of the meter,” she said.
Nonetheless, the Discos had last month assured the local manufacturers of meter that it would buy from them. Sunday Oduntan, executive director, Association of Nigeria Electricity Distributors, ANED, umbrella body of the Discos, while denying media reports that they refused to patronise the manufacturers assured them of its members’ readiness to patronise the product to grow local contents.
According to Oduntan, three out of 11 Discos are currently patronising the indigenous meter manufacturers in the country. He added that Discos purchased all the NERC-approved Credited Advance Payment for Metering Implementation, CAPMI, meters from local meter manufacturers. He said the Discos would have wished to patronise local manufacturers from the beginning of the privatisation if their prices were competitive and if they had the ability to do vendor financing.
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