The Association of Meter Manufacturers of Nigeria has said that the ongoing plans to empower foreign companies to import meters into Nigeria will cripple the investments of local meter manufacturers.
The Association said the criteria to partake in the $155 million World Bank loan for metering favoured foreign companies ahead of the local meter manufacturing industries.
Addressing journalists on Thursday in Abuja, the Secretary of the Association, Engr Durosola Omogbenigun said the World Bank programme is inimical to the meter manufacturing industries and the progress that has been made in the local content policy.
“There are matters of urgent national importance which we think we need to bring to the attention of the new government and the issues emanet from the structures of the World Bank bid for 1.25 million meters in the Nigerian space.
“We estimate that there is a short fall of between 8 to 10 million meters and there are various programs that have been instituted over the years to close the metering gap and the importance of closing the metering gap include improving the liquidity in the value chain and improving the transparency as well.
“Our interest today is to state that this World Bank project we believe is inimical to the growth of the manufacturing sector, it is inimical to the progress that has been made in the local content policy, also, it negate the gains that have been made in backward integration, technology transfer and employment of staff within the industry.
“Sometime in 2020 the government decided to accelerate metering, they created phase zero, phase one and phase two.
“Phase zero would be a programme whereby the Central Bank pays for all meters that are currently in the country and get it distributed in a manner that is free. There is the distribution enhancement programme of the World Bank which also said that they would make interventions and investments in the various parts of the value chains of the electricity sector.
“So, for phase zero, the government bought about one million meters and it was distributed and the government said there is going to be phase two which was going to be funded by the World Bank.
“We started phase zero, we finished it, about a million meters was distributed and then we got into the bids for phase one and it was scoped to be the provision and distribution of 4 million meters and in achieving this the Central Bank said the 4 million meters will not be imported and they will support local manufacturers to build capacity.
“At the time we finished phase one which covered 4 million meters and the investment that went into the bid process by our members were substantial”, he explained.
Omogbenigun said by the time they finished the bid process, the Central Bank said it was no longer in the position to fund phase one. He said efforts were made by the Nigeria Electricity Regulatory Commission (NERC) to get alternative funding but all to no avail.
“AS this dragged on, we then heard about phase two and in phase one we already got our award letters, we had already replied and accepted this award and we were making additional investment for progress, then we heard that the World Bank phase two project is coming on and this was exciting news for us.
“However, Transmission Company of Nigeria (TCN) who had managed the Project Management Unit of the bid process for phase one, they were also to manage the bid process for phase two and it is not a grant, it is loan of $155 million being given by the World Bank to Nigeria.
“What then surprised our members was when the conditions of the bid came out and it was clear that the performance bond, the evaluation criteria by way of cash flow, by way of turnover seem to be designed to eliminate the local companies.
“For example, you needed to have a five years experience, now our industry is a nascent industry, probably 3 years, we require a turnover between $16 million to $26 million for each of five years”, he noted.
He said none of the companies can qualify for that, and they also observed that the package was such that the foreign companies were to bring in fully built meters.
Omogbenigun further explained that these foreign companies that would qualify are allowed to bring in fully built meters and the package also said that each of these companies and the winning companies will be given the Import Duty Exemption Certificate.
He said the Certificate is a programme that has been designed to facilitate the importation of equipment in various sectors for the local companies for equipment and not for products, but the World Bank 1.2 million units of meters programme were going to be imported on duty free.
“This will definitely kill the local industries, it will take away all the progress that have been made in local production capacity and local content policy of the government in the meter manufacturing sector, our backward integration programme will definitely suffer a serious setback.
“The bid is due for submission and opening on the 11th of July, so we decided we have to raise up our advocacy to make sure that this bid are not submitted under the existing structure, that the government should look at it, call us to a table, let us be included to the programme, the evaluation criteria should be restructured so that local companies can participate either as joint ventures or individually”, he submitted.
Mr Ifeanyi Okeke, the Treasurer of the Association further stated that “we are not against world Bank funded programme, we understand the impact of funding to a developing economy like ours, so we need the money, but what we are saying is that what we need to do is to direct this funding in a way that will catalyse job creation and economic growth, development and industrial revolution”.
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