By Oluwaseun Adesida
THERE is no doubt that in the last two decades, the real sector of the Nigerian economy, against what ought to be an upward swing, has instead maintained a shameful slide, even amid an inherent abundant natural and human endowments.
I have met quite a few of the local manufacturers, but yet, I cannot point at one who gave out a broad smile and a handshake as a sign that he or she was enjoying a sail that was smooth and heading towards a destination prosperous and fulfilling. Considering that only a vibrant manufacturing sector can actually resuscitate the ailing economy of any country, the state of Nigeria’s manufacturing sector, is one that should worry all patriotic Nigerians,
From the early 90s, as each year closes and another one opens, it is a continuous tale of woes, misfortunes, complaints, and talks of challenges by the majority of investors in Nigeria’s manufacturing sector.
And when you get data from the industry revealing that only one of five manufacturing firms that set out, even with the brightest of prospects, is likely to celebrate its first anniversary, it sends a clear signal of a state that offers nothing but hopelessness. And you share in that feeling of depression with the manufacturers if you get a chance to engage any in a deep conversation. Now, could it be that the successive governments deliberately formulated policies to undermine the real sector? Not exactly: that is my guess! No government really wants to sabotage its own people.
But from poor power supply, high lending rates, poor transport network or infrastructure, absence of raw materials that could be sourced locally, multiple taxation from government agencies, exorbitant duties paid on imported raw materials, and then a government policy that appears to be encouraging the importation and even dumping of sub-standard goods, the fate of local manufacturers has been like that of a courageous midget struggling endlessly with all his energy to wrestle out of the grip of a Goliath.
To me therefore, the recent CBN forex restriction policy on some items, has come as a real lifeline to local manufacturers, no matter the criticisms (which I suspect could only come from importers). Those consumers, who constantly look for the savior offshore, are now made to look inward by the CBN policy. There is a boost, no matter how minimal in the production capacity of local manufacturers to meet a growing demand for goods. That was clearly depicted in several media reports last week, as local manufacturers based in Ota, Ogun State, affirmed in songs of excitement (rather than the usual dirge) of how production capacity, demand and sales for locally made goods have suddenly gone up by about 50 – 70 per cent.
Messrs Nassos Sidirofagis, a Greek, and Managing Director of Tempo Food, Paper Pulp and Packaging Limited and Oluwasesan Taiwo-Tijani, a Nigerian, who is Managing Directors of Sren Chemicals Limited and Polymer Packaging Limited who spoke at that media meeting held at the Obasanjo Farms Otta summarized the impact of the CBN policy this way: “The new CBN policy has been the game changer for the fortunes of local manufacturers as Nigerian consumers who can no longer import the items that are consumed or utilised locally are now compelled to patronise what we are manufacturing locally.”
“In the last three years, it was really so difficult for us to operate at our full capacity and to make profit. In fact, the new policy has made Nigerians to even realise that the quality of our local goods are far higher or richer than the imported ones. Demand and sales have gone up. And our production capacity has also gone up by about 50-70 per cent and we now have to employ more,” said Sidirofagis. Let me also reproduce this quotation from Taiwo-Tijani, at that same event: “Now we can smile a little because what we made in sales in my company for three months is what we now make for one month because most companies that import nylon bags and inks which we manufacture are no longer able to do so.”
“They have no option than to buy from us. The CBN policy has given us the bright prospects to expand and to export. And we want the CBN to do everything to sustain the policy. Now more Nigerians are thinking of going into manufacturing and if the policy is sustained, I am fully convinced that we will have a country where we will be producing about 70 per cent of what we consume in the nearest future,” he added.
But it is even more instructive to note how Sidirofagis, who is of Greek descent, had to warn at that meeting that Nigeria may go the way of Greece if the apex bank does not resist blackmail attempts to rescind the policy.
I have no doubt that the benefits in the months ahead would be far more tremendous for the local manufacturers if Godwin Emefiele, the CBN boss, continues to hold his ground and keep the official foreign exchange window shut against importers of items that can easily be produced in Nigeria. That is what I want to see happen.
Indeed, there is certainly no way local manufacturers can grow if continuously made to compete with imported goods, sometimes of even substandard and poor quality. There is also no way the government’s move to create jobs would be realized under a clime where the bulk of goods consumed in the country are manufactured abroad and imported into the country. Such import dependency can only end up creating jobs offshore, in China and India, from where these goods usually come into Nigeria.
The CBN and other regulators of the various sectors of the economy should, however, follow up the forex restriction policy with a thorough check that ends smuggling through Nigeria’s porous borders, and also work towards a reduction in the interest rates charged by banks, while some form of waivers should be granted on duties on raw materials not found in Nigeria but required as feedstocks for local manufacturers, just as Nigeria’s power generation and supply situation needs to be improved from its current state.I am so optimistic that what appears to the majority of local manufacturers as an endless struggle by a courageous midget to wrestle out of the grip of a Goliath would be over – even faster than envisaged – should all these other highlighted challenges be also resolved.
•Adesida, a Public Relations Strategists, writes from Lagos.