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EIGHT years after power privatisation in Nigeria, electricity distribution companies (DisCos) have failed as private businesses, leaving millions of Nigerians without meters.
The DisCos have, however, preferred to charge outrageous estimated bills to customers, providing little guidance on households willing to get meters.
In a 2020 report, the Nigerian Electricity Regulatory Commission (NERC) said six million customers had not been metered. Only 3. 918 million households out of the total customer population of 10.374 million, representing merely 37.7 per cent, were metered.
Being a private business, nine DisCos are expected to provide pre-paid and post-paid meters to Nigerians who should now be seen as customers. But they have failed to do so as private businesses, estimating huge bills to struggling consumers.
The impact of this is that many Nigerians, especially those living in middle- and low-brow locations, do not have electricity meters, but pay huge estimated bills monthly to the DisCos.
At Ilamose, Oke-Afa area of Lagos, Ikeja Distribution Company has failed to meter many households. The company has, however, raised its estimated bills at will.
From N8,500 in May 2019 , Ikeja Disco raised its electricity bill to N10,300 in November 2019 at Ilamose, Oke-Afa area. The amount increased to N16,023 in December 2019 and further to N18,279 in May 2020 – in the middle of COVID-19 pandemic when several households were not allowed to run their businesses. It likewise increased to N20,927 in September 2020 and to N21, 443 in November 2020.
“The point is that nobody challenges them. And it does not matter whether you have one room or a flat, everybody pays the same thing. This is not how a private business should run,” one of the residents who preferred anonymity said.
Another customer of Ikeja Disco in Surulere area of Lagos, Jimo Ibrahim, said he was surprised that DisCos were not too different from NEPA and PHCN.
“You have to know someone to get a meter in Lagos,” he said.
Joshua Wagboje, a micro business owner in Ajegunle, Lagos, said he received N80,000 as bill for a month in 2019, lamenting that it resulted in humongous bills of over N150,000 for him.
The case is not different in some parts of Abuja. A power consumer in Kubwa, a satellite town in Bwari Area Council of the Federal Capital Territory Chuka Akalugo, told The ICIR that he had been on estimated billing for so long despite making frantic efforts to access meter through the AEDC.
“I have been on estimated billing for over four years now. When the government spoke of the mass metering programmer, I keyed into it. Till now, I am still on estimated billing which is eating deep into my income,” Akalugo noted.
DisCos fail amid CBN’s billions
The Nigerian Central Bank has so far released over N33bn in a bid to close the millions of metering gap in the country. The apex bank also barred the importation of fully assembled meters and prohibited bringing infrastructure from outside the country already existing within.
The apex bank confirmed to The ICIR, through its spokesman Osita Nwanisobi, in April 2021, that a breakdown of its disbursement to Discos was as follows: Benin Disco, N27.22 million; Eko Disco, N4.69billion; Enugu Disco, N5.06billion; Ibadan Disco, N5.22billion; and Ikeja Disco, N2.41 billion.
Others were Jos Disco, N4.47billion; Kaduna Disco, N2.13billion; Kano Disco, N5.12billion; and Port Harcourt Disco, N4.18billion.
The apex bank also confirmed that there were four phases to the National Mass Metering Programme. Under the phase ‘0’ of the programme, only meters that were in the warehouses of the meter providers would be paid for.
The NERC has validated the quantities and certified the meters before disbursement of funds to the banks by the CBN. However, there are still concerns of meter makers’ capacity to meet with the stipulated meter needs under phase 0.
According to the apex bank, the objectives of the programme was to support Nigeria’s economic recovery by creating jobs in the local meter value chain, reducing collection losses and increasing financial flows to achieve 100 per cent market remittance obligations of the DisCos.
The CBN has since then disbursed more millions to DisCos, but the situation is still the same.
Is it capacity problem?
The Federal Government, as part of the Economic Sustainability Plan geared towards addressing post-Covid economic concerns, came up with the Mass Metering Programme in 2020.
The initiative was targeted at closing metering gap of about 6.5 million household as of then and empowering indigenous local metering manufacturers. However, findings have shown that the local meter manufacturers are grossly lacking in capacity for the daunting task, as some of them cite importation and logistic concerns in meeting up with the demand.
“Logistic reasons and port congestion are still limiting some of the final components that make the meter complete,” an indigenous meter manufacturer and the Chief Executive Officer of Momas Electricity Meter Manufacturing Company Limited (MEMMCOL) Kola Balogun told The ICIR in a telephone conversation.
He, however, advised that despite these concerns hindering the mass metering programme, the government should not explore opportunity of allowing more licences for local meter manufacturing, stressing that opening the door for importation would lead to loss of jobs.
Industry analysts differ
Industry analysts told The ICIR that the speed needed to close the metering gap and shore up liquidity concerns in the power sector was being slowed down by indigenous manufacturers due largely to importation logistics of some metering components which were not currently available in the country.
“With the urgency required to close the metering gap, I do not think it is a well-thought-out policy. We are still paying subsidy of over N50billion monthly by the government to close liquidity gap in the sector. Is it not better to allow importation of meters to address the urgency in liquidity issues and ensure we do not wait endlessly for local manufacturers ?” Energy Lawyer and Power Sector Governance Expert Chuks Nwani told The ICIR.
Findings have shown that there is a minimum target of meter installation of 50, 000 to 100, 000 monthly given by the government to the Discos on the mass metering programme.
At the launch of the National Mass Metering Programme in Gaduwa Estate, outskirts of the FCT in November 2020, the AEDC said it planned to install 101,000 new meters before December. However, The ICIR checks reveal that only 31,954 meters have been installed so far under the mass metering scheme by the company.
Spokesperson of the AEDC Oyebode Fadipe told The ICIR that all customers who had not been metered would get their meter in phases.
Analysts insist that the mass metering scheme has several loopholes in its strategy, a situation that should be revisited to address the lingering concerns of closing the metering gap.
“We tend to commercialise solutions to most of our problems without doing proper homework. This has been the bane of most interventions such as this. We have thrown in money rather than getting the governance structure right and the problems are still very much with us,” former Chairman of the NERC Sam Amadi told The ICIR.
Power is essential for economic development as it increases productivity and productive capacity of a nation, creating more jobs and boosting the gross domestic product (GDP). Nigeria generates around 12,522 megawatts (MW) of electricity but distributes about 4,000MW. This means one megawatt is to 50,000 population. On the other hand, Ghana generates 4,000MW and distributes 2,400MW, according to the USAID. This is one MW to 12,675 population.
Nigeria is world’s poverty capital with 105 million citizens extremely poor. Unemployment is 33.3 per cent, partly because of lack of power across the country.
Public Policy Expert Princewill Okorie told The ICIR that NERC must intensify efforts in its performance in terms of improving plans focusing on consumer enumeration report with the DisCos to properly guide the mass metering programme.
He expressed concern that Discos appeared comfortable with the estimated billing, raising issues on their less emphatic drive on mass metering programme.