Nigerians, over the years have been waiting for a time when constant power supply would be enjoyed. Although, the government has embarked on several measures to address the hydra-headed challenges confronting the power industry. Mr Kola Balogun, Chairman/ CEO , MOMAS Electricity Meter Manufacturing Company (MEMMCOL) speaks with TBI Africa team on what can be done to address some of the challenges identified in the industry.
Question: There are so many issues in the power sector and these have really have not made the sector to move as expected. As a stakeholder, what do you think the challenges facing the sector are?
Answer: The power sector is faced with lots of various challenges, that have to do with lack of ownership of the entire power sector value chain. In taking ownership, somebody must defined a proper roadmap. So, to define what are the goals of the power sector reform and to my own observation, it is to ensure that power are made available to the general populace of Nigeria at a reasonable tariff but today what we have is inter-agencies rivalries, arrogance within the sectors stakeholders. One sector would want to make itself over others and it is important that one of the supervising ministries to take ownership of the entire power value chain.
The problems with the power sector is more than class-room exercise, it is meant for the people who are on ground and who know where the shoe pitches. We are promoting a technology that does not belong to us, we are supposed to promote a technology that is created in the country to promote Nigerian conditionality. Every nation encourages its peculiarities and then domesticate the technology capability, our technology has the capability to address the power sector issues.
Thank God that the Federal Government, recently, increased the tariff on imported meters, I am telling you today that none of the Meter Assets Providers (MAPs) has ever contacted me for the 30 per cent local content meter manufacturing involvement, they go ahead to pay Chinese company 70 per cent of meter importation order but to pay for local company to supply meter is a problem and they don’t come for contracts. So , how would you encourage employment in the country and also address the deficiencies in the sector. How are we going to develop our technology capability?
“We don’t want a miss-merged, let explain some of the things that can improve power sector. Today, we need to enhance our infrastructure on the distribution value chain, power generation is increasing tremendously, Federal government is trying to spend more money on transmission, the distribution network needs to be improved and we are providing a way forward to be able to improve distribution infrastructures. We are doing so by ensuring that all the substations and all technical and commercial losses are reduced significantly to barest minimum in order to deliver power to the consumers. If you have meter in all customers’ premises and the network/ infrastructures cannot support to deliver power to them, it is a wasteful investment.
Let me also tell you what is happening in the metering sector, we are promoting a technology that does not belong to us, whereas we have our own developed technology, purely designed and made in Nigeria and that can solve all our problems but they don’t listened. There are some ideological frameworks being imposed on us but which is not supposed to be so. They are supposed to listen to us all and know our technical capability. They should promote local content in order to pass the massage to domestic need and that power sector need to grow, the ministry needs to do more by callling all the stakeholders to define new road maps in achieving the optimization of delivering stable electricity to consumers at a fairly minimum tariff.
I’m not against tariff review but then the power must be available to consumers and the meters must also be available. If you install1one per cent of smart meters in a substation that has 90 per cent, you can’t do energy reconciliation with them. What we are saying under MAPs is that we want to install smart meters where the rest are not smart, how do you do energy reconciliation? That’s why we are saying that the most important value chain in the distribution sector, is to do infrastructural and substations enhancement so that our substations will be stable and be devoid of technical and commercial losses, so that power can be made available to consumers premises.
We have some many ideals that can improve the up grid and mini grid system that we make available areas in Nigeria to have 24/7 power supply by proving some local design infrastructural improvement that we have done. We have done the P.O.C that will prove that to the system. What government needs to do is to call all stakeholders and look at the new road map of achieving optimization in our power sector dream.
We cannot solve the problem of Nigeria power sector by academy exercise, it is important that all the stakeholders has one thing in mind – i.e our power sector must work, we must have reference cases where we can boast of success story. We need to start create success stories by ensuring uninterrupted power supply. That should be the new next level agenda for government
There is need for government to jail somebody for contravening of Local Content Act, people need to be punished for contriving the local content act. It is when the violators of local content act are punished that they we know the important of creating the local content in power sector. If people contravened the Executive Order 5 of the local content, such should be punished because until some people are punished, everyone will not sit up and embrace the act.
There is need for us to create an employment and the opportunity in the power sector can take jobless people on the street because there are some many items coming into the country but which can be produced locally. So, until government insist on local content enhancement in power sector, we need to take our destiny on our hands,
It is in the collaboration agencies and ministries that can address the challenges in the power sector, enough of deceit in the sector. We should not depend on outside to clean our power sector. We can do it ourselves, the power sector degradation is as a result of we, Nigerians and we can fix it ourselves.
Question: The MAPS that was launched since May doesn’t seems to be working. Also it was alleged that some power equipment imported into the country are still pending at the port due to high custom tariff. How do you see this?
Answer; I am of the opinion that meter imported in to the country is a total contravention of the Local Content Act, if regulation said you must patronized 30 per cent local content, you did not fulfilled it, you are now fulfilling 70 per cent foreign importation of meters. What do you cLl that? I am confirming to you that none of the MAP licensee has approached me to buy meter of 30 per cent provided by regulation despite singing an MOU. So, the 35 per cent level by Federal government is a welcome development to increase local capability, it is a serious issue which is a contravention of local content for them to even import meter without fulfilling the 30 per cent initial order from the local factory, and I’m telling you that local manufactured meters havepassed all the tests required, validated and confirmed for consumption by all agencies responsible for the testing. That is mandated by metering code, they should pay for their negligence for importing meter without patronizing locally, the local content act must be respected.
“I don’t have problem with importing component and raw materials which I still pay five per cent. Why would someone go and import meters without patronizing 30 per cent local mandatory specification by government?
I can table my capacity if I’m encouraged and same goes to other local meter manufacturers. So, we need to sit down and find out on how to address the anomalies in the syste. We need to develop our technological capability to address our power problem. Everybody should come and manufacture in Nigeria, we have what it takes in Nigeria to produce locally.
The regulation says that when you are to import 1,000 meter into the country, 300 must be purchased locally while 700 be imported but on the condition that if local factories cannot meet up the 300 meters. Fortunately, we have the supply. Then, you must keep patronizing local company but our MAPs licensee would rather prefer to send money to China and neglect the local manufacturers. Meanwhile, if they want to deal with local company, they will be asking for credit. I have never seen this kind of people in my life. I have never seen where people will disrespect your local company at the expense of foreign companies, it is absurd.
Question: How do you think government can enhance the local content in power sector just as it has been done in the oil and gas industry?
Answer: That is the responsibility of all the power sector agencies, the ministries of power and it should endeavor to call all the agencies including the manufacturers, Discos and sound it emphatically the importance of local content. The ministry also needs to chart a new road map in the sector on what we need to achieve on a timely bases, the improvement is required in the sector.
How do you ensure that each Discos has a feeder that we can say yes this feeder has a cost reflective, uninterrupted power supply and also ensure that feeder by feeder keeps improving themselves. tThat’s should be the new target.
They should ensure each disco within a quarter, they should ensure feeders are totally cleans. It is better we solve a problem out of a thousand than solving half problem out of a thousand or ignoring it because it is from the feeder their meter consumers.
So, if one feeder is cost recovery, it means the disco will pay market operators their money and consumers we also pay bills. The minister should order that each Disco should improve its feeders and give quarterly reports on their performance.
There must be a centralized data based system by the regulators to know the exactly volume of consumers we have. It’s not by request but as one stock point where they can see all consumers of power sector, not just what the Disco gives. They should have supervisory council that will supervise the entire discos anr if course, which we have the technology to do.The world is a global community which is growing significantly in IT compliance and this means we should trend with them because we have all the intellectual that can do it.
We need one single spot data base to monitor the entire discos effectively with their performance and it should be pluggable and done locally because we have the strength and manpower. We should not trade ourselves off by bringing foreigners to our local company fo what IT can instrument.
The ministry should champion new road map of where to go, the road map should be target driven, this what will change the power sector. This is what we should be taking, defaulters should be punished and local content should be respected and target to all the discos performance should be defined.
The Nigerian Electricity Management Services Agency (MEMSA) would have to effectively play its role especially on how many network they supervise. Also, the regulator, how often are they checking their regulation compliance? These are things that every agencies need to do.
And Disco should ensure their improvement on quality bases i.e how many feeders were they able to clean, how many consumers have stable supply which by end of the administration to have a stable and working administration.
Question: Meter manufacturers are lamenting of low patronage, which negate the agenda of government in setting up MAP, in your own views, how would you assess the patronage level?
Answer: It’s part of my earlier submission that our people do not respect local content, that is why the emphasis on defaulters of local content should be made to face the rot of the law, they should not allow anybody who contravene the Executive 4 Order 5 of the local content to go scot free.
Often time, people contravene the law without facing the consequences which affects the implementation but such should not be encouraged. We need to define the slogan, that anybody who contravenes local content act should be punished because if all the MAP licensee respected the local content act, the factory will be busy and perhaps there will be more expansion. Now that there is levies towards imported meters, that can force any other Chinese companies to come and set up their factory. If these kind of levies are imposed in virtually all houses and equipment, we would have built up other factories that produce television, decoder and other in Nigeria. If we don’t address the failure of the past, we cannot sustain the tomorrow we want to build. It is very important that we address what makes the oil factories failed and be able to manage and maintain the new one we plan to build.
We need to ensure local content remains and to improve on the power sector, everybody should respect local content, everything produce in Nigeria must be consumed herein and anybody who default must be punished until somebody is jailed for contravening local content nobody will see Nigeria being serious for us to meet forward
Question: Does the local meter manufacturers have the capacity to meet the market demand ?
Answer; The same question was what some foreign investors who want to set up factories in Nigeria asked me, they say that the few factories set up in Nigeria has not been optimized to full capacity. First and foremost, we must prove that these people are not fulfilling the local requirements. Let me tell you the procedure of ordering a meter, if you want to order a meter from China today, you will be asked to pay 30 per cent, before the shipments, you will be asked to make the balance of 70 per cent and that period will take minimum of three months but if they want to buy from the local companies, they will not give notice. What you have is that they want to pay money and collect immediately, as we speak, I have over 20, 000 meters manufactured in my factory which is over five million naira.
To borrow five million from bank was not easy, I cannot continue to produce when am not sure of patronage or noting from the Map licensee, these are the issue we need to address. We must ensure everybody respect the sanity of local content because we have the capacity to produce more than what we have presently and we can grow it but the capacity has not been stated.
The ministry of power needs to investigate if truly we cannot set the target just as they are doing to foreign factory. We are under-utilized, we need the intervention of all the agencies in ensuring they drive local content because that’s the only way to solve the problem of power sector. The solutions are here, we need to be given the opportunity to implement it
Question: Do we assume that the importation of foreign meter is affecting local meter manufacturer
Answer: Absolutely, the importation of foreign made meters is destroying local factory development or sustainability in Nigeria. Therefore, we should commend the effort of government for increasing the tariff of imported meters, the effect of closing the boarder is yielding good results in the country. How it has increased the production of rice farmers is the same thing we need in the power sector. We need to take a bold step to show that that tariff on imported meters remains, it does not change and we have one of the best facility to produce electrical meters in entire West Africa which anybody can attest to.
I can boldly attest to you that the meter can solve energy theft in Nigeria, be it bye-pass, revenue leakages, technical losses, the meter is enrich and designed locally to solve the problem.
