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FG should incentivize local meter manufacturers, create zero interest loans

FG should incentivize local meter manufacturers, create zero interest loans

Momas Electricity Meter Manufacturing Company Limited (MEMMCOL) has been one of the pillars of the Nigerian Power Industry and has contributed immensely to the industry through the provision of meters and allied accessories. In this interview, Chairman  Momas Electricity Meters  Manufacturing  Company Limited (MEMMCOL), Engr (Dr. ) Moshood Kola Balogun, speaks on issues facing the industry such as cost of doing business in the country, multiple taxations, the company’s huge contributions including introduction of new technology to propel growth in the Nigerian energy sector. Excerpts:

What are the achievements of MEMMCOL within the last 10 years of post-privatisation of the power sector?

 Momas Electricity Meter Manufacturing Company Limited (MEMMCOL) is the leading manufacturer in the downstream Power sector. We are duly recognized and certified as an Original Equipment Manufacturer (OEM) in the power sector where we have demonstrated passion, commitment, patriotism, and professionalism through innovations that are at par with best-known global practices; with notable inventions like the prepaid energy meters, vending/billing management applications and support services, Meter boxes of all kinds, single and three phase Din Rail smart electricity meters, dual tariff electricity meters, Distribution Substation Enhancement Concept for both 11kva and 33kva power sub-stations and establishment of the Momas Metering School (MMS), the first of its kind in Nigeria and sub-Saharan Africa. So far Momas has achieved 250,000 meter deployment under CAPMI, 120,000 meters deployment under MAP and 160,000 meter deployment under the National Mass Metering Programme.  

How has your organisation contributed to job creation?

Momas is a pacesetter in the downstream of the Power sector. We are responsible for some of the notable inventions in the sector ranging from the invention of a software billing application system for the DisCos, the invention of a management application system, the invention of a Dual tariff energy meter, the invention of the Distribution Substation Enhancement Concept for both 11 kva and 33 kva, respectively. We also invented energy meter enclosures and three-phase Din Rail meters. All these innovative products came with a lot of research and development, training, and re-training. We have also invested so much in manpower development and a lot of jobs were created for young Nigerians.

Our staff strength within the period was 127 workers.

Can you explain how private sector-driven meter manufacturers in Nigeria have benefited from Nigerian banks in terms of long-term, single-digit credit facilities or patient capital? Is it possible for manufacturers to obtain financial support from development finance institutions to expand their production capacity and capability in the country?

It is a known fact that bank loans are run on double-digit interest rates which makes it difficult for manufacturers to really break even when they access bank loans. Aside from this, the distribution end of the Power sector value chain is highly regulated and off-take and prices are determined by the government. The major scheme put in place by the regulatory agency which is the MAP scheme is a retail model and it is not suitable for manufacturing thereby affecting energy meter manufacturing growth. On the energy meters price fixing, this is also not appropriate considering the increasing exchange rate and the fact that most of the meter components are sourced from overseas. This is making the business not viable anymore. This is also not allowing for competitiveness. Equally, control of meter off-take is affecting the commercial viability of energy meters, sadly Nigerians are craving energy meters but the system in place, is making it difficult for people to have access to energy meters. So, with all these bottlenecks, accessing bank loans is not really useful in the sector because you cannot obtain bank facilities to produce energy meters without off-take.

Over the past decade, what difficulties have arisen in accessing funds, particularly foreign exchange-dominated funds necessary for importing raw materials, critical industrial equipment, plants, and machinery? Also, what challenges have you faced regarding foreign exchange?

Unfortunately, we have been buying forex from the parallel market for the last 12 years because the successive governments in the country have not been concerned about the need to prioritise the provision of forex through the official window for the manufacturers. They seem to have forgotten that the real sector is key to the development of the economy through job creation. We buy forex from the black market to procure our raw materials from abroad and after the production we are compelled to sell at a fixed price. The meter prices were reviewed in October 2021 before the recent review that was done in September 2023.

Can you explain the importance of taxation, such as VAT, at the point of import, VAT at the point of transaction, and VAT on sales and purchases of pre-paid meters? How has VAT affected the importation of raw materials, the production process and the final cost of producing pre-paid meters?

Well, VAT and other tax elements are huge burdens on manufacturers especially in the Power sector because the cost of doing business in the country is extremely too high because of multiple taxations from the state, local, and federal governments, coupled with the high cost of energy production which are affecting businesses profitability and this is why compliance has not been effective. The government needs to look into all these issues, create an enabling business environment, identify genuine manufacturers, and put policies in place to support the manufacturers.

Taxes, port charges, import charges, and multiple layers of charges are a burden that negatively affects manufacturing businesses and trading in the metering value chain. What changes would you like to see in the tax system, particularly in regards to multiple charges and taxation, as well as fiscal and non-fiscal incentives in the metering and manufacturing subsectors, under the Tinubu Administration?

Governments needs to, first of all, streamline the tax structure in such a way that it will be minimal, then look into the infrastructural challenges across the country that are affecting business and address the challenge, prioritize forex availability for manufacturers at the official window, put policies in place to incentivize local manufacturers, create zero percent interest loans for manufacturers to enable production to thrive and make import duty and port charges free for the importation of raw materials and pieces of machinery to encourage production. This will to a great extent bring about local production, boost the economy through job creation, increase exports, and strengthen our currency. Also, the government needs to take very seriously the distribution end of the value chain in the Power sector because it is responsible for revenue generation which guarantees cost recovery and this can only be achieved through metering and power infrastructure. So, the government needs to support local meter manufacturers by addressing some of the challenges affecting the growth of the sector.

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Another problem with the sector is the different types of energy meters in the country which is seriously affecting manufacturing and the only way through which development can be achieved in the sector which will further impact positively on the economy and other sectors of the economy is for the Federal Government to enforce the adoption of a single specification of electricity meter in the country. This, if done, will give direction to production and it will give effect to backward integration because by doing so, the different players in the sector can then choose the convenient area of specialisation on any of the components and this will make production complimentary. In the long run, some of the components that are produced in the sector would as well be useful in other sectors of the economy and a lot of industries and jobs will be created.

On the last note, there is a need for the Government to liberalize metering supply in the country by removing the statutory control by the government on meter supply and meter prices with a view to opening up the sector for easier accessibility to electricity meters by Nigerians and to give effect to the forces of demand and supply to determine the prices of meters. This will enable manufacturers to have the freedom to sell their products at competitive prices. It will also create a lot of jobs for Nigerians through dealership and retailing of electricity meters and guarantee cost recovery in the sector as more Nigerians will have energy meters, and distribution companies too will have improved revenue to sustain the entire value chain in the Power sector.

How has electricity contributed to the growth of the Meters Manufacturing Industry? Has it been a fair deal? Has power to the manufacturing industrial clusters been stable, reliable, and affordable?

Since we commissioned our factory 13 years ago in Ogun State, we have been running generators because power around the Lagos/Ibadan Expressway is not too good for sensitive industrial activities like our factory. This is because, in our production processes, there must not be fluctuation or power outage during the production processes. Today, the cost of diesel per litre is N1300 and we use 33,000 litres in a month. The implication of this is that the bulk of our revenues goes into energy supply, leaving us with nothing in terms of profit.

What, in your own opinion, should the government do to improve grid stability and reliability, safe delivery of electricity and safe use of electricity in Nigeria?

Since the old NEPA was unbundled and privatised, it has not really lived up to expectations as the power situation in the country has not really improved. As a stakeholder in the sector with over 40years of experience and having been responsible for some of the notable inventions in the sector,  I am bold to say that that sector needs the government’s urgent intervention by way of setting up a committee comprising eminent and experienced experts who are knowledgeable about the sector to appraise and review the performances of power generating companies, transmission companies and the distribution companies with a view to having a proper overview of the sector and review the existing policy framework in order to reposition the sector for better performance.

According to the Federal Government report, the energy meter needs in the country as at 2020 was put at 10 million and this was what informed the first notable intervention in the sector by the FG, tagged the National Metering Programme where CBN is mandated to provide fund for energy meter off-take from the established and recognized local energy meter manufacturer in the country. This scheme is intended to meter Nigerians to bridge the metering gap, improve the revenue generation of the DisCos, and guarantee cost recovery to be able to sustain the entire value chain in the sector, and to stimulate economic growth through job creation for Nigerians, especially the youths. This is one of the landmark achievements of President Muhammadu Buhari, and this must be sustained. Phase zero of the scheme has been concluded since 2021 with one million energy meters freely given to Nigerians. Phase one of the scheme is stalled because of the unrealistic fixed prices for a contract that is expected to be completed in one year considering the increasing inflation, unstable foreign exchange, and foreign exchange accessibility to the manufacturers to be able to procure raw materials from overseas and technical specification review.

The challenges recorded on the intervention have made it necessary for all the fundamental issues militating against the development of the downstream of the sector to be addressed and below are some of the valid suggestions for the country to achieve unprecedented development in the sector. First, it is sad that it is only in the power sector that manufacturers are compelled to sell their products at regulated prices and we have been advocating for the liberalisation of the sector by removing the statutory control on meter supply and meter prices with a view to opening up the sector for easier accessibility to electricity meters by Nigerians and to give effect to the forces of demand and supply to determine the prices of meters. This will enable manufacturers to have the freedom to sell their products at competitive prices and it will create a lot of jobs for Nigerians through dealerships and retailing of electricity meters.

There is a need for the government to adopt a single specification for energy meters in the country as against the so many types of electricity meters we have in the country today and this is the only way development can be achieved in the sector as well as other sectors of the economy. This, if done, will give direction to production and will give effect to backward integration because by doing so, the different players in the sector can then choose the convenient area of specialisation on any of the components and this will make production complimentary. In the long run, some of the components that are produced in the sector would as well be useful in other sectors of the economy and a lot of industries and jobs will be created.

It is unfortunate that despite the huge amount of investments that manufacturers have put in place in terms of technology transfer, plants, and machinery, human capital development through training and retraining, and research and development in the power sector, there are no enabling policies in place to further enhance their development and growth, and all these investments are for local capacity building which should be seen as part of nation building to not only develop the power sector but to bring about technological advancement of the country’s economy. This is why no Assembler would desire to be an original equipment manufacturer (OEM) in the sector; rather they would prefer to remain importers and by this, there is no way the sector or the country’s economy can develop.

The new Electricity Act is a welcome development as it will help in decentralising the control over the Power sector and also improve power generation and supply by the IPPs owned by private individuals and governments at other levels thereby augmenting the energy needs of Nigerians. However, the government needs to review the licences of the distribution companies by appraising their performances in the last 10 years of being licensed because ideally, metering is the asset of the distribution companies as such they are mandated by their licence to provide energy meters to Nigerians but today, the responsibility has been shifted to Nigerians to pay for energy meters. Also, the DisCos are expected to bring liquidity into the sector to improve the Power infrastructure but unfortunately, there is no such fund injection and this is one of the reasons there are commercial and technical losses in the sector as well as arbitrary estimated billing of consumers.

How has your organisation contributed to the bridging of the manpower gap in the electricity meters ecosystem in terms of training of the trainers and technology transfer?

We singlehandedly trained 300 graduates on meter installation in 2020 to complement the Federal Government’s intervention in the Power sector tagged the National Mass Metering Programme (NMMP). They were trained at no fee with free accommodation and feeding and after the training we provided them with tool bags and other incentives. The youths were drawn from across 15 states of the country and they were nominated by their respective state governments.

We have also partnered with the North East Development Commission (NEDC) to train 200 youths drawn from across all the states in the North East zone on metering technology, an initiative aimed at resuscitating the economy of the zone. We have also provided free engineering training support to the Association of Professional Women Engineers of Nigeria (APWEN) in order to contribute to the empowerment and encouragement of women engineers.

Can you tell us the objectives of Momas Metering School? 

Part of our core ideology is youth empowerment and this is why we established the first and the only Metering School in Africa in 2018, Momas Metering School. We sponsored the development of the curriculum on metering technology and the National Critique Workshop through the National Board for Technical Education (NBTE) which led to the eventual adoption and approval of the curriculum for tertiary institutions in the country.

In view of the landmark achievements of the Momas Metering School on youth’s empowerment, the school has just won the SIFA grant from the German Government, the grant is to assist in the development of the school’s permanent site. To this end, additional courses have been added to the lists of the courses the school is running and more curriculums have been developed i. e. Welding and Fabrication,

What are Momas Distribution Substation Enhancement Concepts? Is it an innovation by Momas, what does it entail? What are its impact, prospects, and impediments?

The dual power supply enhancement solution is conceptualized to push for the possibility of a 24-hour power supply downstream with migration of substations from the old-fashion fuse-driven to a more intelligent and efficient breaker-driven substation with an inbuilt automatic transfer switch ( ATS) installed with surveillance in line with global trends.

Using Nigeria as a case study, Nigeria has 12,500 MW of installed generation capacity, being largely dependent on hydropower and fossil (gas) thermal power sources; 12.5% and 87.5% respectively. However, it is important to note that currently only 3,500 MW to 5,000 MW is typically available for onward transmission to the final consumer. According to projections by international observers, grid electricity demand in Nigeria is expected to increase to 12,800MW. Also, grid demand will be augmented by off-grid supply to meet consumption needs in rural areas. Off-grid electrification initiatives are gradually emerging with different generation sources and capacities, hence closing consumers’ demand gap for power supply.

Momas,  as a technology-driven company, introduces the dual tariff energy system to manoeuver the challenges of power outage (downtime) in the distribution system thereby supplying  24-hour power supply to consumers at 415V from an alternative power supply (Independent power supply) that is an off-grid system.

Apparently, the country has not maximized its available resources downstream to provide an uninterrupted power supply to consumers. Sixty-four percent (64%) of the power supply in Sweden is sold by individuals and simulated in the power sector of the country. The Momas dual power supply enhancement solution has provided the potential to alleviate many of the problems faced in the Nigerian power sector and also gives revenue assurance to the DisCos and the IPP involved.

Your organisation is said to have applications and software that could enhance customers’ data, customer services, customer call centres, and also interfaces between the critical stakeholders and players in the downstream sub-sector of the Nigerian electricity supply industry including the regulatory institutions.  How has this fared and what is the level of patronage and acceptance by targeted spectrum or end users?

Momas Electricity Meters Manufacturing Company Limited (MEMMCOL) has developed a suite of applications and software designed to enhance customer data management, customer service delivery, customer call centre operations, and the interaction between key stakeholders and players in the downstream sub-sector of the Nigerian Electricity Supply Industry (NESI). These applications address the challenges of data fragmentation, inefficient customer service processes, and poor communication between stakeholders, which have hindered the effective functioning of NESI. MEMMCOL’s applications have been positively received by distribution companies (DisCos), institutions, and real estate in Nigeria. The applications have improved data accuracy and accessibility, streamlined customer service processes, enhanced communication with customers, and facilitated data sharing among stakeholders. This has led to improved customer satisfaction, reduced operational costs, and enhanced overall efficiency in the NESI. Several DisCos have adopted MEMMCOL’s applications, including the Ibadan Electricity Distribution Company (IEDC). The IEDC has reported significant improvements in customer service, reduced operational costs, and enhanced efficiency following the implementation of MEMMCOL’s applications.

MEMMCOL’s applications have proven to be valuable tools for enhancing the efficiency and effectiveness of the NESI. The applications are well-received by stakeholders and have demonstrated positive results in several DisCos. MEMMCOL’s continued innovation and development of cutting-edge applications are expected to further transform the NESI and contribute to improved electricity service delivery for Nigerian consumers.

For instance, MEMMCOL’s applications like the Customer Data Management System (CDMS) provide a centralised platform for managing customer data, including meter readings, billing information, and payment records.

The Customer Relationship Management (CRM) System streamlines customer service interactions, enabling efficient handling of customer inquiries, complaints, and service requests. Similarly, MEMMCOL’s Customer Call Centre Management System (CCMS) is a system that optimizes call centre operations, improving call handling times, reducing wait times, and enhancing customer satisfaction. The Stakeholder Interface Platform facilitates communication and data sharing between DisCos, institutions, real estate, and regulatory institutions.

What kind of applications has MEMMCOL developed to enhance customer data, customer services, call centres and interfaces?

Momas Electricity Meters Manufacturing Company Limited (MEMMCOL) has developed a range of applications and software designed to improve customer data management, customer service delivery, call centre efficiency, and interfacing between various stakeholders in the Nigerian electricity sector, including regulatory institutions. These applications have received positive feedback from various entities, including distribution companies (DisCos), institutions, and real estate companies.

MEMMCOL’s customer data management system (CDMS) provides a central repository for customer information, including meter readings, payment history, and customer service records. This system helps DisCos to better understand their customer base, identify areas for improvement, and target marketing campaigns more effectively.

MEMMCOL’s customer service applications enable DisCos to provide self-service options, such as online bill payment and meter readings. These applications also streamline customer service interactions, improving response times and reducing customer frustration.

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