Amidst Scarcity, Millions Of Meters Rot At Lagos Port Over 35% Levy
…NERC increases meter cost to reflect naira devaluation
Millions of electricity customers are being denied meters, and part of the reason is that the Nigerian Customs Service is extending application of a 35 per cent levy introduced by the government on imported meters to components used for meter production.
The enforcement of the levy on both imported components and manu¬factured meters is causing a pile-up of containers loaded with meter parts at the ports, which local assemblers say are in the millions.
Many have criticized a levy on me¬ters in a country where 62 per cent of electricity customers lack access to meters, but the situation could worsen as even parts to manufac¬ture millions of meters have been stranded at the ports for months because local manufacturers con¬sider the levy prohibitive.
“Nigerian Customs are the reason Nigerians are not getting meters today,” Chantel Abdul, managing di¬rector, Mojec International Limited, a local meter assembling outfit, said by phone. Abdul said there are hundreds of cargoes of meter components for production stuck at the ports be¬cause the Nigerian Customs is demanding a 35 per cent levy before they can clear them.
Joseph Attah, spokesman of the Nigerian Customs Service, however, said the agency was mere imple¬menting the directive of the Nige¬rian government. Nigeria’s metering space comprises importers of meters, those who as¬semble Semi Knocked Down (SKD) components to assemble, and those who say they are Original Equip¬ment Manufacturers (OEM) and de¬velop their own software and hard¬ware solutions.
“For us, COVID-19 and the move¬ment restrictions have impacted our operations making it difficult to meet orders, but we are not affected by the levy since we manufacture our own meters,” said Yahaya Ya¬haya, company secretary, Momas Electricity Meters Manufacturing Company Ltd (MEMMCOL).
Electricity customers who will in June begin paying additional 21 per¬cent on the cost of single-phase meters and a 23 per cent price in¬crease for three-phase meters, according to new guidelines released by the Nigerian Electricity Regula¬tory Commission (NERC), will bear the brunt of inadequate meters.
In a letter to the Discos and Meter Asset providers, NERC said the price of single-phase meters is now N44.896.17 rather than the previous N36,991.50, and customers applying for three-phase meters will now pay N82,855 instead of N67,055 due to the naira devaluation in March.
Strict enforcement of the levies on imported components and manu¬factured meter is causing a pile-up of containers loaded with meter parts at the ports while thousands of Nigerians each day express out¬rage on social media over the refusal of power distribution companies (Discos) to meter them.
“If the government was serious about eliminating estimated billing, it would make an emergency proclamation removing duties on meter at least for a period of time,” said Chuks Nwani, an energy lawyer based in Lagos. According to the latest report on the sector published by NERC, the me¬tering gap for end-use customers is still a key challenge in the industry.
“The records of the Commission in¬dicate that, of the 10,374,597 regis¬tered electricity customers, only 3,918,322 (37.77 per cent) have been metered as at the end of the fourth quarter of 2019. Thus, 62.37 per cent of the registered electricity cus¬tomers are still on estimated billing which has contributed to customer apathy towards payment for elec¬tricity,” the commission said.
In 2018, NERC began a Meter Asset Provider programme to allow third-party investors to provide meters for customers at a fee, but the levy and the foreign exchange challenges hamper the project.
Source : Businessday 9th of June 2020