Govt should make policies to discourage population explosion – Kolawole Balogun

Kolawole Balogun is the Chairman/Chief Executive Officer of Momas Electricity Meters Manufacturing Company Limited. He tells BABATUNDE TUGBOBO about his business, life and other issues

What informed your decision to venture into the manufacturing of prepaid meters?

The company is the first indigenous prepaid energy meter manufacturing company. If one does not find out what caused the failure of yesterday, one cannot sustain the tomorrow one wants to build. During the old days of the power sector, it was a post-paid system that was in place. It was meant to create responsibility in the sense that when one uses power, one will have to pay after the billing circle. But, because the system was not functioning properly as there were no responsibilities on the part of the state to the citizens, it made the citizens to have apathy towards paying for services, especially when it concerned the government. The refusal by the people to pay for electricity led to loss of revenue in the operations of the then National Electricity Power Authority, as they were not collecting revenue sufficiently. Therefore, cost recovery was not guaranteed for investment in the upstream sector, which were the generation and transmission companies. Also, the services then were not enhanced in a way that would give comfort to the consumers to pay. It was a situation where officials would go into people’s houses, give them estimated billings, and compel them to pay; or a situation where power officials would refuse to connect consumers until they paid reconnection fees. All these challenges were the reasons that made the prepayment system inevitable to save the sector from imminent collapse. I am proud to say that I brought this prepayment solution to the downstream of the power sector out of genuine concern and commitment to contribute to the development of the power sector. This system has really helped in giving confidence to the consumers, as well as improve the revenue of the distribution companies.

What were the early days of the company like?

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We started this business of prepaid metering around 1995. Back then, we were importing the prepaid energy meters from South Africa. They were happy with us because orders were coming, and we were opening so many letters of credit. I was also making good profit, but I was not fulfilled because it had always been my desire to add value to my area of specialization, which is electrical electronics. I then asked myself an important question, which was, ‘How do we continue to import meters for a population that is growing astronomically’? Then, I thought that there was a need for the energy meters to be made locally, and I took a shot at it. However, it was not an easy decision because as of that time, there was no incentive in place to encourage the manufacturing of energy meters locally. Also, the company we were buying meters from in South Africa was faced with major hindrances, such as a lack of stability on the policy line. So, we decided to take the bull by the horns and take the risk of establishing the manufacturing facility here in Nigeria.

Designing a meter is not a classroom exercise, so we needed to go outside the scope of the normalcy of engineering to learn how a meter is designed, which led to us into a customised school of learning, manufacturing facility, tests, and standards involved in meter manufacturing. We needed to first bridge the knowledge gap because the people who had the technology were not even ready to share it with us. We had to prove to them that we could acquire it, even if we were not given. That was how we started the manufacturing journey.

To what extent has the privatisation in the power sector met the expectations of meter manufacturers?

Privatisation, as an ideology, is what is good for the country. Whether it is done rightly or wrongly is what we need to discuss. If one looks down the line, one will discover that privatisation has not solved all the challenges we had been facing in the sector, such as the lack of sufficient investment in the deployment of metering, insufficient infrastructure such as transformers, feeder pillars, and undersized conductors. Also, there is no enhancement in the face of dilapidated infrastructure in the downstream sector to enhance the delivery of power to the consumer. These and many more were the factors affecting the sector, and we expected privatisation to address them. But sadly, we are still where we were before the privatization; other than the fact that we have some documents that are limiting our functionality. The answer in a short form is that it has not met expectations.

How do you source materials for producing prepaid meters?

In the sector today, there are different categories of manufacturers— original equipment manufacturers, complete knockdown manufacturers, and semi-knockdown manufacturers.

However, we are the only original equipment manufacturer in the downstream of the power sector; others are CKD and SKD assemblers. The difference between us and others is that we design from scratch to finish. What we procure essentially are components such as transistors, resistors, integrated circuits, and diodes. These are smaller components that we buy in line with our design. We often get them from China or Japan, because there are certain parameters that supervise components, in terms of integrity, tolerance level, and what they are to be used for. That gives us authority over meters that we design, because we can choose to do it in any way, since we are the owners of the intellectual property.

What are some of the challenges you face in the course of sourcing your materials?

There is a big difference between the policy frameworks in understanding what OEM, CKD and SKD structures are. OEM is a major component of development for any nation because of the knowledge capability which can be extended to so many other areas of the economy. Today, the only available government incentive in place for us, as an OEM, is the import duty exemption certificate, which entitles us to zero per cent duty; though value added tax and other port charges are payable on each of the component necessary to manufacture the meters. Meanwhile, these components are sourced from different manufacturers across the world. In recent times, the government reviewed the IDEC policy to mandate manufacturers to remit five per cent of the duty amount waived to the Federal Government. With this development, it means the duty is not completely waived.

The implication of this is that the government has chosen to encourage assemblers more than OEM manufacturers because when one considers what is payable on each of the components by the manufacturer as against the one-off payment on already assembled meters by the assemblers, one will realise that OEM manufacturers have been put at a disadvantaged position. Because of that, we cannot compete favourably in the sector, especially because the price of electricity meters is fixed by the government; hence, we are practically running the business at a loss, and our growth is stalled.

It is sad that despite the huge investments we have put in place in terms of technology transfer, plants and machinery, human capital development through training and retraining, and research and development as an OEM manufacturer, there are no enabling policies in place to further enhance our development and growth. Meanwhile, all these investments are for local capacity building, which should be seen as part of nation building; to not only develop the power sector but to bring about technological advancement in the country.

It is because of the above that no assembler would desire to be an OEM. They would prefer to remain importers, and we cannot develop the sector that way, talk more of the country’s economy.

In what ways can the government intervene to help the industry surmount these problems?

It is important for the tariff committee to invite (stakeholders) and listen without biases and sentiments. They must appoint a knowledge-based team to oversee the people who are creating the tariff structure in the Federal Ministry of Finance, so that they will be able to put the right framework to encourage OEMs.

In terms of government policies, there is a lot of non-alignment in understanding what OEM, CKD and SKDs are. There is a need to know the difference between component designers and people who bring in semi-designed devices into the country. The knowledge gap needs to be bridged, so that we can have a functional, efficient and vibrant power sector. If the knowledge base is extended widely enough, the person who designed energy meters can design other devices such as computers, and cable TV decoders.

Another problem with the sector is the different types of energy meters in the country, and that is seriously affecting manufacturing. The only way by which development can be achieved in the sector is for the Federal Government to enforce the adoption of a single specification of electricity meter in the country. If that is done, it will help with backward integration in a way that the different players in the sector will be able to choose the convenient areas of specialisation on any of the components. In the long run, some of the components that are produced in the sector will also be useful in other sectors of the economy, and that will ultimately lead to the creation of more jobs.

Lastly, there is a need for the government to liberalise meter supply by removing the statutory control of the government on meter supply and prices, with a view to opening up the sector for easier accessibility. It will also enable the forces of demand and supply to determine the prices of meters. This will help manufacturers to have freedom to sell their products at competitive prices. It will also create a lot of jobs for Nigerians through dealerships and retailing of electricity meters; as well as guarantee cost recovery in the sector, as more Nigerians will have energy meters, and the distribution companies will have more revenue to sustain the entire value chain in the power sector.

How can the challenge of incessantly faulty meters and delay in the distribution of meters be surmounted?

Generally, when one is developing, there has to be funding support for those who are doing research and manufacturing. That way, they will be able to provide continuous enhancement of knowledge to ensure that faulty meters are repaired adequately. Some other developed countries have made Africa a dumping ground for their substandard products, and when these products are defective, it is usually impossible to return them to the suppliers. It is quite normal for us to pass through this phase, but the government must be consistent in ensuring that they give adequate support, so that whatever needs to be repaired will be fixed.

The Nigerian Electricity Regulatory Commission said in March 2022 that it would take one to two years to close the about 8.1 million metering gap in the electricity sector. How would you assess them, judging by their promises?

The 8.1 million metering gap cannot be done with small financing. The financing must be adequate and consistent enough, but those funds are not readily available. We have not been able to close the metering gap, but the commission seems committed to it and is trying to raise more funds to continue the deployment of meters in the country. The initial intention serves the purpose it is meant for, but the funding is not adequate as there is still a huge gap, bearing in mind that as the population increases, there will be an increase in the metering gap.

That is why I am advocating for a license structure that will protect manufacturers. I suggest that the government should select two or four manufacturers who have the resources, knowledge and infrastructure to provide metering on a constant basis and give them licenses, so that consumers on their own volition, will buy and take it to the distribution companies. If meter manufacturers are licensed and are always available, there will be competition which will bring about the production of even better meters.

What are the challenges in the power sector affecting effective metering in the country?

The major one is funding and lack of capacity on the part of the people driving the sector.

Some critics believe that most discos prefer estimated billing, particularly in rural areas, which is why prepaid meters have not gone round. What do you have to say to this?

In rural areas, there are insufficient communication facilities for them to be able to have vending infrastructure. Most vending systems are remote, so they need very strong network to be able to recharge their meters, since we are advocating for smart meters. To have strong network, there will be a need for telecommunications companies to expand their base stations in remote areas; and, there must be enough population to justify that investment.

Also, insecurity is another factor affecting the deployment of energy meters to some rural areas, hence there is need for a better security architecture. However, there are synergies we can build. That is why I still appreciate some of the efforts made during the tenure of Babatunde Fashola as the Lagos State Governor, when he used to hold meetings with stakeholders to discuss the way forward on a monthly basis.

In what ways has your metering school been able to solve the deficit in meter installations?

What necessitated the metering school was the porosity in the quality of meter installations. If one installs an energy meter wrongly in a consumer’s premises, it is as good as there being no meter in the premises. In that case, both the consumer and the distribution companies will not value from the installed meter, which is tantamount to money been wasted. The idea of the metering school is to first reduce the inefficiency in meter installation techniques, so that we can train enough Nigerians to be able to meet the standard of installation.

Secondly, we have a tremendous number of unemployed youths that can be trained and engaged immediately. They will be kitted, given the right certification, and monitored. In line with the doctrine of the school, we also give moral education against energy theft, because it is when there is sufficient revenue from the power sector that one can sustain the delivery of power to consumers.

What are your views on the local content policy, and its impact on indigenous firms in Nigeria?

As far as I am concerned, the local content policy is still on paper. The deployment, enforcement and engagement of it in the real sense of it are still not there.

Aside from the manufacturing of meters, you also produce safety and security products. What informed your decision to venture into that line of business?

We wanted to enhance our capability, and optimise the knowledge, equipment, and infrastructure we had.

What can the government do to reduce the rising spate of insecurity in the country?

The government must have the willingness and boldness to tackle the issue. One cannot have one’s cake and eat it. One cannot keep pampering miscreants. If people are not held accountable for their misdeeds, these things won’t stop. We are pampering inadequacies. We need to be firm in addressing certain issues, to save the country from becoming extinct.

If a person commits a crime and they are not punished, but are rehabilitated back into society, it will be difficult for people to stop committing crimes. The government is not bold enough. If one wants to effect change, one must be bold enough to do that.

The government has often accused western countries of not selling ammunition to them in the fight against insecurity. What advice do you have for the government as regards overcoming that challenge?

The way out of that is to develop local capabilities. No serious nation will their weapons to go into another country without monitoring them. It is left for one to develop one’s capability if one has an issue with one’s internal security. One must invest in local weapons and develop one’s defense structure. If we compare our defense structures with that of others that were set up at the same time, we would see that other countries have gone far ahead of us in terms of development. We have to produce what we will use to protect ourselves.

What are some of the challenges your company faces in trying to manufacture safety and security products?

The major challenge is that we do not have access to procure foreign exchange through the regulated market for some of our raw materials which we get from outside the country. Foreign exchange scarcity is at an alarming rate, and manufacturers are not given any priority, though we are key to the development of any economy. If we are given priority, we can begin to locally manufacture those things we import. There must be a department, other than trade, to midwife the development of both raw materials and equipment.

Most nations of the world place importance on science, technology, engineering and mathematics in school curricula. Is Nigeria doing enough in that regard?

That is part of the dilemma in our education system. We need to review the entire curriculum.

What is your take on using local languages to teach in schools?

That is what is happening in many other parts of the world. But, we cannot start that immediately because time is against us. To start drafting the curricula in our local languages will take time. We should continue using English to teach, but we should also find a way to embrace local languages.

What’s your advice to youths who want to travel out of the country in search of greener pastures?

In my opinion, they are mortgaging their future because no matter how long one stays abroad, one will always be a secondary citizen and cannot be treated as a child of the soil. Mentally, one would know that one does not belong there.

We (Nigerians) all have to come together, look inward and believe in our country. The ‘japa’ syndrome should be for one to travel overseas; learn and come back home to put the experience and knowledge to use in developing one’s country. However, the government also needs to live up to its responsibilities to create an enabling environment for people to live comfortably. I wonder why it is so difficult for the government to address the issue? We need to put our house in order, and allow true federalism to work.

Unemployment is another problem. How can the government create more jobs?

First, there must be population control. I am a Muslim, but we are not being fair to the religion. The rate at which our population is growing is alarming because we don’t plan for it. Whatever we can do to control the population at any point should be done, while we contain those already available. There are jobs that can be created, but we cannot continue growing at this rate. If there must be policies that will discourage population growth, we should enforce it.

Our population is growing no doubt, but not up to that of China, and that country is doing reasonably well. Is there anything they are doing that we are not getting right?

They are planning. There was a time that the Chinese government had a birth control policy of one child per family.

What are the key qualities that have brought you this far?

They include doggedness, passion, and belief in myself. Also, when I see a problem; I confront it, rather than running away from it.

As a child, did you envisage that you will get to this level?

No; I was born into a state of hopelessness. My father was an Islamic cleric who did not have money, and he did not believe in western education. So, he did not enroll me in school, as his desire was for me to become a mechanic. There was a day I read the Quran for him from a computer, and he was surprised. He asked me where I learnt it, and I told him it was knowledge through education. That way, I was able to make him see the importance of education before he passed on.

What are your educational qualifications?

 I attended Mushin Modern School in Lagos. I also went to Olalomi Comprehensive School, in Offa, Kwara State. I later got admission into the University of Ilorin but I did not have money to pay the fees, and I wanted to work too. So, I decided to attend the Kwara College of Technology where I studied Electrical Electronics; and I was able to work too because I had to sponsor myself through school. I later attended the University of Florida, United States of America, for more courses on meter design and regulatory framework on electricity.

How do you unwind?

I hardly unwind because when I look around me and see a lot of inadequacies; I don’t feel excited. There are a lot of people depending on me. In the quest to keep progressing, there are risks that require wisdom to manage. There is no way one will be surmount every challenge and still unwind.

Other than the fact that as a human being, one needs to slow down and rest for the sake of one’s health, I hardly unwind.

Who are your role models?

The late Nelson Mandela, Wole Soyinka and Barack Obama are some of the people I look up to.

What is your favourite food?

Pounded yam and egusi soup.

Are there still feats you wish to achieve that you haven’t?

I don’t want my name to die. I want the school I’m building to endure. The school is not a physical school, but an ideological one of doing things right. It is about being fair and kind to all; and creating hope out of hopelessness.