Nigeria hikes electricity meter price

Nigeria is set to experience a significant increase in the prices of single-phase and three-phase pre-paid electricity meters. The Nigerian Electricity Regulatory Commission (NERC) has announced that this move is crucial to ensure fair and reasonable pricing of meters for both Meter Asset Providers and end-user customers. Emmanuel Onasami, Lead Partner at Cardinal Professional Services, joined CNBC Africa to delve into the complexities of electricity tariffs and meter production dynamics within Nigeria. Onasami acknowledged the discontent among Nigerians regarding the 40 percent hike in pre-paid meters. He highlighted the importance of considering the prevailing economic conditions to sustain the profitability of Meter Asset Providers. As the exchange rates fluctuate, the cost of doing business in the energy sector sees a notable shift, prompting the need for adjustments in service fees. The increase in meter prices, coupled with tariff rate hikes in July, poses challenges for businesses in Nigeria. The rising cost of energy, in conjunction with escalating fuel prices, directly impacts production costs, potentially hindering economic growth. Onasami emphasized the significance of affordable power in boosting production levels, drawing comparisons with countries like China and India where inexpensive power and labor facilitate widespread productivity among households. The discussion extended to the distribution of meters through the national meter asset program. Reaching out to unmet Nigerians remains a priority to phase out the estimated billing system. While some distribution companies adopt partial upfront payment methods, ownership concerns post-acquisition persist. Resolving these issues is vital to ensuring a smooth metering process for all individuals. Addressing broader power sector challenges, Onasami highlighted the need for robust policies to revamp Nigeria's energy landscape. The recent introduction of the Electricity Act 2023 presents opportunities for fresh investments, particularly at the state and local government levels. Decentralizing power generation and exploring renewable energy sources are avenues to enhance power availability and attract investors. As states navigate the process of formulating frameworks for power generation, urgency is paramount. Accelerating the development of renewable options and expanding grid capacity are critical to supporting small-scale businesses and driving economic growth. Government intervention is essential to provide immediate power solutions while long-term strategies are put in place to address Nigeria's power sector limitations. In conclusion, Onasami emphasized the need for swift action in the power sector to stimulate economic activities and enhance production capacities. The government must prioritize sustainable energy solutions to propel Nigeria towards a more robust and efficient power infrastructure.