Business

Manufacturers fault FG’s 35% meter import levy review

Electricity Meter Manufacturers Association of Nigeria (EMMAN) has picked holes in President Muhammadu Buhari’s approval of one year deferment of the 35 per cent import levy on electricity meters.

 

They called on the government to retrace its step in order to promote full local content in the manufacturing of pre-paid meters. The association says the directive to defer 35 per cent import duties on importation of pre-paid meters is an incentive for mass importation of pre-paid meters as against upscaling of production capacity of made in Nigeria.

 

Executive Secretary, EMMAN, Muyideen Ibrahim, who stated this in a statement issued on behalf of the association, noted that the local manufacturers were 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 three million finished electricity meters will have negative effects on the power sector. It says allowing such decision to run for a year would jeopardise government efforts at industrialising the country.

 

The group stresses 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. Itnotedthatasanin-depthmanufacturerin the sector, it takes an average of three months tosetup SKD(Semi KnockDown(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. It would be recalled that President Buhari considered and approved a one-year deferment of the 35 percent 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.

 

The approval for the adjustment followed a request by Zainab Ahmed, Minister of Finance, Budget And National Planning, to support the Nigerian Electricity Regulatory Commission (NERC) roll out three million electricity meters under the Meter Asset Provider (MAP) framework. MAP regulation is a gradual up scaling of the patronage of local manufacturers of electricity meters with an initial minimum local content of 30 per cent with the potential of significant job creation in the area of meter assembly, installation and maintenance.

 

Speaking as a member of the Original Equipment Manufacturer (OEM) in the downstream of the power sector, Mr Kola Balogun, Chairman of Momas Electricity Meters Manufacturing Limited (MEMMCOL), said that the 35 per cent levy was the only protection that is available to them in the sector and it is not peculiar to the sector alone. Balogun described the removal as an indication that the government is more disposed to favor 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 three million meters. This means we would further be developing another country’s economy and continue to increase unemployment, poverty and underdevelopment in our country

 

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