By Obas Esiedesa
As part of the effort to support and increase revenue in the energy sector, the Central Bank of Nigeria, CBN, disclosed last week that it disbursed around N3.6 billion for the acquisition of prepaid meters to stabilize the consumption billing system of electricity in Nigeria as part of its N120.2 billion investments in distribution companies, DisCos, for infrastructure capital expenditures.
With about 55.5 percent of Nigeria’s 8.3 million electricity customers still without meters, CBN’s intervention was described by the consumer group, Electricity Consumers Association, as a game changer.
The group’s chairman, Mr. Usman John, told Energy Vanguard that measurement was a major industry challenge that the Federal Government must urgently face.
John urged the government to completely discard the use of the billing system estimated by DisCos, describing it as “complete fraud”.
He explained: “Measurement is a major challenge in the sector. Consumers should be able to determine how much they pay for electricity through controlled consumption.
“No matter what the government does if the meters are not supplied, it will go nowhere because the supply of meters is fundamental to the growth of the sector.
“Many consumers are suffering from the weight of estimated revenue, which is nothing more than criminality. People are given bills for what they have not consumed and that should stop. That is why what CBN is doing is commendable.
“We want the bank to go beyond just providing the meters with money and to ensure that these meters are purchased and delivered to consumers at no cost,” he added.
Speaking about the intervention, the Associate Director of PwC, Energy, Utilities and Resources, Habeeb Jaiyeola, said it remained the right step given the fact that the current installed capacity for generation companies in Nigeria, the inability of DisCos to fully distribute and collect payment would continue to hamper the country’s ability to fully leverage its installed capacity.
According to him, “the government’s continued support for DisCos will have a general impact on the sector to facilitate the necessary progress, adding that the federal government also has a stake in DisCos’ needs to see its successes.
“Previous intervention funds have been used to solve the collection challenges. The plan to use this intervention for infrastructure development is a step in the right direction, ”he said.
Jaiyeola urged the government to clearly outline and monitor the intervention to ensure that it achieved the projected objectives, adding that the National Mass Measurement Program may need to be verified against some of its defined objectives in terms of coverage, availability and completion time .
In turn, energy expert Michael Faniran also noted that the measurement remained critical for the energy sector, as it would allow the sector to generate enough revenue to fill the sector’s liquidity gap.
Faniran explained that without government intervention to bridge the measurement gap, DisCos may not show a willingness to end arbitrary consumer billing.
He explained that there is a critical need for the government to support infrastructure development in the sector, as well as being an investor in the distribution link, adding that without the infrastructure that would reduce collection challenges, the sector would not be able to finance gas and other links in the sector.