FOREX: MANUFACTURERS OF METERS FACED WITH DEMAND TO CONTINUE SUPPLY

Because of the ongoing lack of foreign exchange, meter manufacturers are under pressure to maintain supplies, and their operations are being adversely affected by price swings.

Even with the government's efforts to reduce the difference between the official and unofficial rates of its currency and put foreign exchange trading back into the public eye, the naira is still under pressure.

At the same time, the Nigerian Central Bank (CBN) disbursed $500 million to several industries. This occurs just one week after the bank settled outstanding obligations in the manufacturing, aviation, and petroleum industries for almost $2.0 billion.

Mrs. Hakama Ali, the acting director of the CBN's corporate communications department, stated that the move was consistent with the organization's resolve to clear the backlog of confirmed foreign exchange transactions, which the management of the CBN was dedicated to resolving as soon as possible.

Ali restated the governor of the CBN, Olayemi Cardoso,'s guarantees, stating that the CBN has started putting a comprehensive plan into action to increase short-, medium-, and long-term liquidity in the Nigerian foreign exchange markets.

She continued, “The CBN's focus is on addressing fundamental issues that have hindered the Nigerian FX markets' effective operation over the years, as the governor said.”

Sidi Ali expressed confidence that a stable currency rate would increase investor confidence and draw in foreign investment, even though he noted that the reforms to the forex market were intended to streamline and unify numerous exchange rates, create transparency, and decrease arbitrage opportunities.

She called on all market players to follow the regulations, emphasizing that market openness would allow for the equitable setting of currency rates and, consequently, ensure stability for both individuals and enterprises.

Recall that the CBN has been disbursing varying amounts over the past few months in an effort to settle the accrued foreign exchange liabilities.

Dissatisfied with fluctuations in foreign exchange rates, the manufacturers have voiced their opinions through the Association of Meter Manufacturers of Nigeria (AMMON). Nigeria's need for foreign funding has increased due to the country's declining oil production, which is its primary export.

As a result, the group representing energy meter manufacturers urged President Bola Tinubu's administration to find a solution to the problems caused by fluctuations in foreign currencies in the metering sector.

This comes as the group hailed the recent establishment of the Presidential Committee on Mass Metering, led by Minister of Power Chief Adebayo Adelabu, hailing it as a gallant attempt to confront the pressing problems confronting the metering sector.

AMMON indicated that foreign exchange fluctuations have had a negative impact on the sector's activities and emphasized its desire to collaborate with the committee.

According to the statement, the concern about the challenges brought about by changes in FX rates, which impact the electricity meters to the Nigerian Electricity Supply Industry (NESI). The group emphasizes how urgently legislative action is needed to address the issue of a fixed meter price when rising inflation and affect all input costs, especially given the steadily increasing demand for meters. This attention is to ensure the flawless deployment of meters across the nation.

This calculated action end customers have access to dependable and reasonably priced electricity meters in addition to supporting the industry's sustainability in the meter manufacturing sector. In light of this, AMMON urges regulatory bodies to take into account liberalizing meter prices, which would enable producers to adjust to changing market conditions and guarantee a consistent supply of meters.

AMMON cautions that during the next 14 days, there will be a serious scarcity of meters available for installation if urgent action is not done. Delays in intervening could make the NESI's current problems worse and impede efforts to provide universal access to power meters.

According to our estimations, there is a three-month supply chain gap that is causing the approaching scarcity. AMMON therefore urgently calls on regulatory bodies and stakeholders to prioritize and speed actions to remedy this. With the exception of the brief gap previously realized, if this measure is performed, it will guarantee the continuous and uninterrupted supply of meters to meet the country's growing demand for dependable power services.

To provide affordable meter specifications that meet NESI standards, AMMON further promotes cooperation between regulatory agencies and the Nigerian Electricity Management Services Agency, or NEMSA. The association thinks it can help design standards that support affordability without sacrificing quality and reliability by collaborating closely with NEMSA.

“AMMON is still dedicated to assisting the country's power industry and thinks that these suggested actions will contribute to a more robust and resilient electricity metering ecosystem,” the statement continued. In order to put these suggestions into practice and solve the issues the Nigerian meter manufacturing sector is now facing, AMMON looks forward to speaking with the pertinent parties.