EMMAN to FG: Review levies on imported finished electricity meters

Posted by News Exrpess | 4 September 2020 | 696 times

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•Electric meters


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

EMMAN said in a statement that the directive to defer 35 per cent import duties on importation of pre-paid meters is an incentive for mass importation of pre-paid meters as against upscaling of production capacity of made in Nigeria.

According to the association, 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.

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

It said allowing such decision to run for a year would jeopardise government efforts at industrialising the country.

The group stressed 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 3 million electricity meters under the Meter Asset Provider (MAP) framework.

MAP regulation is a gradual up scaling 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.

Speaking as a member of the Original Equipment Manufacturer (OEM) in the downstream of the power sector, Mr Kola Balogun, Chairman of Momas Electricity Meters Manufacturing Limited (MEMMCOL), said that the 35 per cent 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 us an indication that the government is more disposed to favor importation to the detriment of our local industry.

He said: “The implication of this is that over $600 million 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. 

“We are bold to emphatically say that we at MEMMCOL, have the local capability to bridge the metering gap if the right policy is put in place.

“This can be by way of financial intervention by the government whereby certain agreed percentage of the cost of meter supply would be advanced to us like the importers do with the Chinese and upon completion of installation balance payment would be made to us.

“We do not even mind to furnish a bank guarantee as our own commitment in such deal.”

According to Balogun, the right thing that would have been done by the government is to identify challenges facing local manufacturers and find a way to proffer solutions.

“For instance,” he said, “there is high tariff rates payable to import raw materials that are not readily available in the country, the duty payable on our raw materials ranges from  five per cent per to 40 per cent plus other port charges.

“These are like the ETLS of 0.5 per cent, CISS of one we cent, VAT of 7.5 per cent and surcharge of 7 per cent whereas it is a one off payment of 10 per cent duty on the finished meters plus other port charges for Importers and we sell at the same regulated prices.

“You will agree with me that this is not fair to the manufacturers given the amount of investments manufacturers put in place in terms of technology transfer, plant and machinery, human capital development through training and retraining, research and development.”

Mr 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, customer 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.”

Source: News Express

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