By Milcah Tanimu
A $155 million smart meter project in Nigeria, backed by the World Bank, is facing a significant threat due to policy inconsistencies. The project’s primary objective is to procure and distribute smart electricity meters to 11 electricity distribution companies (DisCos) in the country.
Under the previous administration of former President Muhammadu Buhari, the nation’s metering program was deliberately focused on promoting local production, enhancing domestic capacity, conserving foreign exchange, and creating jobs. This was achieved by granting import duty waivers and other incentives to support local manufacturers.
However, the current Phase 2 of the National Mass Metering Programme (NMMP), approved by the Federal Executive Council (FEC), appears to show a preference for foreign companies over the 35 local manufacturers of smart meters in Nigeria.
The bid requirements for the project include high annual turnover, cash flow, and security bids in dollars, potentially creating obstacles for local manufacturers. Bidders must demonstrate their financial capability by providing audited financial statements for the last five years, including balance sheets, profit and loss statements, cash flow statements, and auditor’s reports. The bid also specifies substantial cash flow amounts for different lots. For turnover, bidders are required to have a minimum average annual sales revenue over the last three years, with different figures set for each lot.
Additionally, bidders must show they have successfully completed at least two similar contracts within the last five years, with values meeting the specified requirements for each lot. Experience and technical capacity must also be demonstrated, including a history of manufacturing or supplying electricity meters and the supply of a Head End System (HES) over the last five years. The bidder should also have experience in the installation and commissioning of smart meters and HES.
These stringent bid requirements seem to disproportionately favor foreign companies, raising concerns about the government’s commitment to promoting local industry and achieving the program’s initial objectives. This policy inconsistency poses a threat to the project’s original goals and could hinder the development of the domestic meter manufacturing sector.