Meter manufacturers task central bank on single digit interest rate

The Electricity Meter Manufacturers Association of Nigeria has tasked the Central Bank of Nigeria to establish an intervention fund at single digit interest rate for members to enable them to compete with manufacturers in other countries.

Executive Secretary of the association, Muyideen Ibrahim, made the appeal in an interview with the News Agency of Nigeria in Lagos on Tuesday.

He said the appeal was against the backdrop of the challenges faced by EMMAN members to access loan at single digit rate.

Ibrahim said that local meter manufacturers were encouraged by the huge metering gap in the country to increase their capacity.

He said financing still remained a big challenge to the manufacturers because they could not continue to borrow from banks at double-digit interest rates.

According to him, borrowing at double digit interest rate will automatically increase the price of the meter, particularly because Nigerians and distribution companies were already struggling to buy them.

Ibrahim said: “We wrote recently to CBN on the need to give us loan on single digit interest rate under a special intervention fund. We are optimistic because this is what is obtainable in China and other countries.
“This will allow Nigerian meter manufacturers to compete favorably with their counterparts in other countries in the world.

“It will also be competitive; manufacturers can even export to neighboring countries which will also contribute to Nigeria’s GDP. We are in conformity with international best practices.”
Ibrahim, however, said the optimism was dampened as many of the members’ businesses were on the brink of collapse due to acute shortage of foreign exchange in the country.

He said: “The manufacturers, who rely on importation for some of the components required for the production of meters, complained that it had become very difficult to access foreign exchange for the importation of those inputs.

“The recent benchmark interest rate hike by the Monetary Policy Committee of the Central Bank of Nigeria from 12 per cent to 14 per cent would further increase the rate at which commercial banks lend to them.

“One of our critical issues at the moment is accessing loan at single digit interest rate and lack of access to foreign exchange.”
He urged government to liberalise electricity meter market to curb ‘crazy billing’ and make the product available to consumers.

Ibrahim said that liberalising the market would boost the activities, increase production and curb high electricity billing.

He said: “The only way to ensure effective distribution of meters to electricity consumers is when meter manufacturers are allowed to sell meters to government institutions, private estates, barracks and other consumers.

“Local meter manufacturers should be allowed to sell directly to individuals and corporate organisations through vendors approved by the Nigerian Electricity Regulatory Commission.
“If the market is liberalised, more electricity customers will be metered and it will go a long way in addressing “crazy’’ bills and estimated billing system.”
Ibrahim urged the Federal Government to create a window for forex for smart meter manufacturers, as done in the oil and gas, aviation and real estate sectors.