Meter Manufacturers Urge Buhari to Rescind Deferment of 35% Import Levy
The Electricity Meter Manufacturers Association of Nigeria (EMMAN) has appealed to the Nigerian government to review its decision to promote full local content in the manufacture of pre-paid meters.
The plea followed President Muhammadu Buhari’s approval of one year deferment of the 35% import levy on electricity meters to help improve Nigeria’s electricity meter deficit.
The association says the directive to defer 35% import duties on importation of pre-paid meters is an incentive for mass importation of pre-paid meters by business men who would have ordinarily driven the local manufacturing of meters in Nigeria.
The group complained that local manufacturers are not being 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 in Nigeria.
“Allowing such decision to run for a year would jeopardise government efforts at industrialising the country,” the group said in a statement issued yesterday in Abuja.
They 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.
EMMAN explained further that 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.
Last week, the federal government approved a one-year deferment of the 35% 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.
Minister of Finance, Budget and National Planning had requested for roll out of 3million electricity meters under the Meter Asset Provider (MAP) framework roll out 3million electricity meters under the Meter Asset Provider (MAP) framework to support the Nigerian Electricity Regulatory Commission (NERC).
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.
Chairman of Momas Electricity Meters Manufacturing Limited (MEMMCOL), and member of the Original Equipment Manufacturer (OEM) in the downstream of the power sector, Mr. Kola Balogun, said the 35% levy is the only protection that is available to them in the sector and it is not peculiar to the sector alone.
He said the Association sees the removal as an indication that the government is more disposed to favour importation to the detriment of our local industry.
“The implication of this is that over $600 million would be exported to China to import the approved 3million meters.
“It 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,” he said.
By Chibisi Ohakah, Abuja