The Electricity Meter Manufacturers Association of Nigeria urges the Central Bank of Nigeria to create an intervention fund where its members can borrow money at single digit interest rate to produce meters locally

By Anayo Ezugwu

GIVEN the determination of the the federal government to support indigenous meter manufacturers, the Electricity Meter Manufacturers Association of Nigeria, EMMAN, is urging the Central Bank of Nigeria, CBN, to give its members single digit interest loans. The association also wants the CBN to establish an intervention fund for members to enable them to compete with manufacturers in other countries.

Muyideen Ibrahim, executive secretary of the association, said the appeal was against the backdrop of the challenges faced by EMMAN members to access loan at single digit rate.

He said local meter manufacturers were encouraged by the huge metering gap in the country to increase their production capacity but that financing still remained a big challenge to them because they could not continue to borrow from banks at double-digit interest rates.

According to Ibrahim, borrowing at double digit interest rate will automatically increase the price of the meter, which Nigerians and distribution companies are already struggling to buy.

“We wrote recently to CBN on the need to give us loan on single digit interest rate under a special intervention fund. We are optimistic because this is what is obtainable in China and other countries. This will allow Nigerian meter manufacturers to compete favourably with their counterparts in other countries in the world.

“It will also be competitive; manufacturers can even export to neighboring countries which will also contribute to Nigeria’s GDP. We are in conformity with international best practices,” he said.

Ibrahim, however, said his members’ optimism was dampened because their businesses were on the brink of collapse due to acute shortage of foreign exchange in the country. “The manufacturers, who rely on importation for some of the components required for the production of meters, complained that it had become very difficult to access foreign exchange for the importation of those inputs.

“The recent benchmark interest rate hike by the Monetary Policy Committee of the Central Bank of Nigeria from 12 percent to 14 percent would further increase the rate at which commercial banks lend to them. One of our critical issues at the moment is accessing loan at single digit interest rate and lack of access to foreign exchange.”

He urged government to liberalise electricity meter market to curb ‘crazy billing’ and make the product available to consumers. Ibrahim said that liberalising the market would boost the activities, increase production and curb high electricity billing. “The only way to ensure effective distribution of meters to electricity consumers is when meter manufacturers are allowed to sell meters to government institutions, private estates, barracks and other consumers.

“Local meter manufacturers should be allowed to sell directly to individuals and corporate organisations through vendors approved by the Nigerian Electricity Regulatory Commission. If the market is liberalised, more electricity customers will be metered and it will go a long way in addressing “crazy’’ bills and estimated billing system,” he said.

Ibrahim urged the federal government to create a window for forex for smart meter manufacturers as was done in the oil and gas, aviation and real estate sectors.

It appears the government will heed the demands of the meter manufacturers. Babatunde Fashola, minister of power, works and housing, had earlier in January this year said the government had concluded plans to involve more Nigerians in meter manufacturing. He said the measure would reduce the pressure on electricity distribution companies on meter supply.

“The core business of Discos is to transport energy; their business is not to supply meters. The government will address metering more vigorously this year with regulations which will open up business in metering to more investors.

“This will reduce the pressure on DISCOs so that they can concentrate more on their core business. So, we will open up the business to other people who want to play in the sector once the meter regulations are completed this year,” he said.

It remains to be seen whether the government will get the CBN to create an intervention fund for the sub sector to promote indigenous meter manufacturing in the country.

– Feb.  24, 2018 @ 4:10 GMT |