Nigeria News

Nigeria Electricity Regulatory Commission: Extortion by another name

Nigeria Electricity Regulatory CommissionLAST week, the Nigeria Electricity Regulatory Commission, NERC, took steps to ensure stricter regulation of the generator-import trade with the publication of the ‘Guidelines for obtaining Clearance Certificate for the importation of generating sets and related matters’.

Among its many highlights, one that perhaps stands out is the new regime of levies imposed on different categories of imported generators. Henceforth, a unit of 100KVA generator would attract a N25,000 levy; those between 25kva and 100kva – N3,500. For the smaller generators with capacities ranging between 5kva and 25kva, theirs is a levy of N1,000; and for those between 2.5kva and 5kva, it is N250; even those between 0.45 Kva and 2.5 Kva are not left out; theirs is a levy of N150.

NERC also set the fee for the renewal of import licenses at 10 per cent of the fee paid on the initial certificate.

The guidelines, according to NERC chairman, Sam Amadi, cover every import from fully assembled generators to knocked-down parts, either for domestic assembly or retail as spares. To qualify for generator-import license, NERC expects importers to submit annual report of generating sets or knocked-down parts imported by them in the last 12 months. The report is expected to cover details about capacity and the number sold.

Considering the lack of regulation in the trade, the new guidelines would seem inevitable. And, to the extent that the country has today become a huge dumping ground for all kinds of generators, with scant considerations for quality and environmental standards, such measures are most welcome to sanitise that sub-sector of our foreign trade.

But the more fundamental question is whether the NERC guidelines are altogether altruistic – borne of concerns for safety, consumer interest or the environment. This is very much in doubt. Indeed, it seems driven more by revenue than anything else. To start with, the much we know is that the responsibility for enforcing quality and environmental standards does not reside with NERC – that responsibility, with due respect, lies with another agency – the Standards Organisation of Nigeria (SON).

What does the measure seek to achieve? To discourage importation of generators? If it is – we consider it flawed – to put it mildly. The point to note here is that generator-trade didn’t become big business in the country because Nigerians love the purring of their generators; or that they hated the inept Power Holding Company of Nigeria (PHCN). Nigeria became the world’s leading importer of generators because the government failed to guarantee public power supply. For the power-starved citizens forced to purchase generators, either for business or pleasure, the levy amounts to double jeopardy –in the event of being forced to pay additional costs without guarantees of improved public power supply. Perhaps, only NERC can afford to revel in the folly of imagining that the levy is a disincentive to the trade without the government seriously addressing the demand-supply gap.

Much as NERC needs funds to run its operations, we do not think that the way to go is the extortionate path that seeks to take from the citizens in return for nothing. The idea that NERC can impose just about any levy because it has the powers to do so – without considerations for what is fair, equitable and just, is wrong. Nigerians didn’t ask to be rid of their corrupt and inept PHCN only to find themselves in the bosom of an inconsiderate regulator. It would be a good idea for NERC to shelve the levy until when electricity consumers are availed the clear choice in public electricity supply. At this time, it is still premature.

Anthony-Claret Onwutalobi
Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC and CEO of Portia Web Solutions. Mr. Claret publishes and manages the content on Codewit Word News website and associated websits. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.

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