Lights Out, Addressing the Fundamentals?

ThursdayNovember 25, 2021 / 01:48 PM / by CSL Research / Header ImageCredit: Guardian Nigeria

As part of President Muhammadu Buhari'sadministrations move to bridge the wide gap of unmetered population in Nigeria,efforts are ongoing to commence the second phase of the National Mass Meteringprogram (NMMP). According to the Godwin Emefiele, the Governor at the CentralBank of Nigeria, the apex bank has so far disbursed N47.66bn to DistributionCompanies (DisCos), acquiring 858,026 meters in the process, stating that theprevious phase made 750,000 units of Meters available to Discos in the country.A NERC report at the end of August showed that a total of 508,812 meters weredeployed through the MAPs scheme, while a Punch news report at the end ofAugust, quoting the Ministry of Power, stated that the number of metersdeployed through the NMMP was 750,000, showing that both schemes havesuccessfully deployed c.1.26m meters as of August 2021.

Despite the privatization of the power sector, theprovision of meters to customers remains a key challenge. Clearly, this impliesthat there are many customers on estimated billing, which gives room forillegal connection to the networks and, in turn, corrupt practices. The MeterAsset Provider (MAP) Regulation, which became effective on April 3, 2018,introduced meter asset providers as a new set of service providers in theNigerian Electricity Supply Industry. However, the request for payment beforethe provision and installation of Meters was a disincentive for the massadoption of prepaid meters despite the known benefits, giving rise to the CBNsponsored mass metering plan.

The Federal Government launched the National MassMetering Programme (NMMP) last year and the CBN, in October 2020, issued theFramework for its financing. The initiative is geared towards mass metering ofNigerians by providing loan facilities to (i) the DisCos (for the procurementof meters for its customers), and (ii) the local meter Manufacturers (for themanufacturing and assembling of meters). The schemes were launched to bridgethe metering gap in the industry. The NMMP, according to a report from ESIAfrica, led to the provision of 750,000 meters to DisCos in the first eightmonths, which fares significantly better compared with the Meter Asset Provider(MAP) program.

Ineffective metering remains a major clog to theprogress of power sector reforms in the country. In our view, the provision ofmeters to all end users will go a long way in ameliorating the liquiditysqueeze in the power sector whilst also providing cash flows to the Discos forinvestment in equipment. That said, there is the need for a holistic approachand concerted efforts by all players in the power sector in profferinglong-lasting solutions to the myriad of issues hindering the entire value chainand commercial viability of the Nigerian power sector. There is no gainsayingthat the erratic and epileptic power supply across the country has been a majorobstacle to the growth and development of the nation over the years.