In Nigeria, the absence of prepaid meters has become a pervasive issue, impacting the lives of many citizens.
Techeconomy sheds light on the challenges Nigerians face due to the lack of prepaid meters, examining the economic burden, social implications, and the potential for positive change.
On Prepaid Meter struggles
A recent public opinion poll conducted by NOIPolls has revealed ownership of fixed pre-paid metering is limited to only 37 per cent of the electricity customers in Nigeria.
As of November 2023, the Nigerian Electricity Regulatory Commission (NERC) reported around 5.79 million customers of eleven electricity distribution companies (DisCos) in Nigeria were metered. In the same period, the total registered electricity customers reached 13.1 million.
This meant that the vast majority of the registered clients had no meters to measure their usage of electrical energy, and thus remained on estimated billing.
Ibadan and Ikeja reported the highest number of metered electricity customers in Nigeria, while metering was lowest in Kaduna and Yola.
The rest of the customers are divided among those who use post-paid meters and those who do not have a meter, but simply pay fixed amounts of money for electricity.
Being the most efficient way to distribute electricity, usage of pre-paid meters is highest in the North-East zone and lowest in the South-East zone.
Further findings revealed that among all respondents, those paying amounts within the band of ₦1,000 – ₦5,000 per month represent the largest group of users (44 per cent).
More findings showed that on average, most electricity customers around the country (68 per cent) have a power supply for less than 9 hours per day including 5 per cent that have no electricity supply at all.
In addition, when respondents were asked if they are willing to pay more to get 24 hours of electricity, findings revealed that most of the respondents (67 per cent) expressed willingness to pay more for a steady electricity supply in their respective households.
Therefore, while further reforms of the electricity sector are imminent, it is essential to further develop the private energy market and improve accountability in the sector.
Also, given that 43 per cent of the respondents disclosed that they do not have pre-paid meters, it is therefore pertinent that stakeholders responsible for the distribution and installation ensure that all electricity users have pre-paid meters in their households.
These are some of the key findings from the Electricity Poll conducted in the week commencing May 1st, 2023.
The Nigerian government introduced both the National Mass Metering Programme (NMMP) and the meter assets providers (MAPs) programme to increase meter distribution around the country. As of 2022, the programme has reached over a million households.
So, why is the number of estimated billed consumers higher than metered consumers?
Electricity lawyer, Ivie Ehanmo was speaking the other day that the capital expenditure (CAPEX) requirements for metering by distribution companies (discos) is high, hence, it will take a longer time to close the metering gap, despite the ongoing government initiatives such as MAP/NMMP.
However, some power consumers have expressed eagerness to collect prepaid meters, but have been unable to.
What Nigerians Spend on Generator
Some Ministries, Departments and Agencies (MDAs) of government in Nigeria spent an estimated N22 billion on generator maintenance in 2023, a PREMIUM TIMES analysis has shown.
The N22 billion will be spent on maintenance and fueling generators due to Nigeria’s unstable power supply.
The amount, spread across over 200 MDAs, may be higher because some agencies did not indicate their generator expenses.
You can image the amount the rest of household spent on powering their generators per annum.
National Grid Collapses
Another menace is the national power grid collapses. Businesses and homes were again left without power supply for several hours yesterday after the nation’s national grid collapsed twice in less than six hours, dropping power generation by 93.5 per cent to 273MW.
The latest collapse came barely two weeks after the controversial celebration of 400 days of stable or incident-free operations by the Transmission Company of Nigeria, TCN.
In 2022 alone, the national grid collapsed eight times, and so far; two times this year, 2024.
The incidents which has now become a source of growing worry for electricity consumers, poses unending questions as to why the Transmission Company of Nigeria has not been able to stabilise the grid despite the Federal Government’s multi-billion dollar investments in the sector.
One of the primary hardships faced by Nigerians without prepaid meters is the financial burden imposed by estimated billing.
Without accurate measurements of electricity consumption, households and businesses often receive inflated bills, leading to strained budgets and financial instability.
The unpredictability of these bills makes it challenging for individuals to plan and allocate resources effectively.
The lack of prepaid meters also contributes to social disparities. Low-income households are disproportionately affected as they struggle to cope with the rising cost of electricity. This creates a divide where those with prepaid meters have more control over their consumption and expenditure, while others are trapped in a cycle of uncertainty and financial stress.
Unreliable Power Supply:
Additionally, the absence of prepaid meters exacerbates the issue of unreliable power supply in Nigeria. The inefficiencies in the billing system discourage investments in the power sector, hindering its growth and perpetuating the cycle of inadequate electricity provision. This unreliable power supply further affects businesses, hindering productivity and economic development.
Impact on Small Businesses:
Small businesses, which are the backbone of many economies, bear a significant brunt of the metering crisis. Without prepaid meters, these enterprises face challenges in managing operational costs, often resorting to inefficient energy use to avoid high bills.
This compromises their competitiveness and impedes their ability to contribute meaningfully to the national economy.
Addressing the lack of prepaid meters in Nigeria requires a multi-faceted approach. Government intervention to accelerate meter deployment programs, partnerships with private entities to invest in meter manufacturing, and public awareness campaigns to educate citizens about the benefits of prepaid meters are crucial steps.
Additionally, we recommend that Chief Adebayo Adelabu, minister of Power, should pursue comprehensive regulatory reforms that promote a transparent and accountable electricity billing system will play a vital role in resolving this issue.
The suffering of Nigerians due to the absence of prepaid meters is a pressing issue that requires urgent attention.
Beyond the economic strain and social disparities, the lack of reliable power supply further hampers the nation’s growth. Implementing effective solutions, such as government initiatives, private sector involvement, and regulatory reforms, can pave the way for a brighter and more equitable future for all Nigerians.