Saturday, February 13, 2010
The Made In Nigeria policy by the federal government in the lingering problems of smuggling and products counterfeiting, poor infrastructure and rising price of industrial inputs, especially Automotive Gas Oil (AGO) and Low Pour Fuel Oil (LPFO), among others may not deliver Results, LEADERSHIP Ayodele Samuel take a look at some issues facing the manufacturing industry . Recently the Federal Government through the ministry of Commerce and Industry flag off what should be call aggressive campaign for the use of made in Nigeria products by the citizen. As at today noting is made in Nigeria , when most industry has been force to close down by unending failure of the power sector. Power as the soul boaster of any economy has run many industry to close coy, early this year Manufacturers Association of Nigeria (MAN) president, Alhaji Bashir Borodo lamented that about 820 manufacturing firm have close down. The sector wish has been blame by local industries has leave the country not to have a “made” for the past few years .manufacturers complain of high cost of investment in self generating energy are letter left out with gas shortage beaming them backward in production. "Despite the potentials of the manufacturing sector as the engine of growth, an antidote of unemployment, a creator of wealth and the threshold for sustainable development, it has suffered severe decline in its contribution to national output. The performance of the sector fell from nearly 13 per cent in the early 1980s to about 4.13 per cent in 2008". MAN said: "it is a matter of concern that between 2000 and 2008 about 820 manufacturing companies have closed down or temporarily suspended production. Indeed, over 600,000 Nigerians are said to have lost their jobs owing to this pitiable plight of the industrial sector, with attendant socio-economic implications. Ordinarily therefore what was expected from government are "desperate measures to tackle a desperate situation, there are no indications of government sensitivity to the negative manifestations in the industrial sector. Also from the period of deregulation to date, industrial consumers have witnessed three price hikes, especially in Automotive Gas Oil (AGO) and Low Pour Fuel Oil (LPFO). "This was foreseen by us and about 18 months ago we made passionate pleas for the reduction in the price of AGO, and permission to partner with NNPC to import LPFO directly. Promise was given that evaporated promises. MAN had protested these shocking price increases and drew the attention of the government to the imminent dangers of the collapse of industries which depends on AGO and LPFO to power their generators or boilers. MAN reacting to banks' lending profile from 2003 to 2009 obtained from the Central Bank of Nigeria (CBN), which indicated that the manufacturing sector received N3.9 trillion during the seven-year period as loans. Comparatively, Communications got N4.974 trillion while Oil and Gas received N6.943 trillion, according to the CBN. "Even the figure given by the CBN as loan to the manufacturing sector was lumped with imports and other things which would really bring down the figure that could be categorized as direct loan to manufacturers", MAN said. "The banks are giving us a pittance. Yet, the CBN claimed that we receive more loans than our contribution to Gross Domestic Product. The truth is, banks consider us as a risk. And the reason is not far-fetched. They can see the poor infrastructure, which hinders our operation. However, our big brothers in the manufacturing sector still get adequate funding from the banks, partly because of their history". Unfortunately, Borodo stated that the Bank of Industry (BoI) which should provide ready support to the industrial sector was not able to do so because of poor capitalisation. According to Borodo: "BOI was promised N50 billion as capitalisation. But, all we were told they received is just N5 billion". Also, the Chairman of MAN's Economic Committee, Mr Clement Olowokande, said the manufacturing sector was not getting enough funding support from banks. Olowokande, who is also the Chairman of Berger Paints Plc, remarked: "We asked the former CBN Governor to give us a breakdown of the manufacturers who got the allocation, which was not provided. And we also said to them that funding assistance to the manufacturing sector should not be based on its contribution to the GDP as is being stressed by the CBN but on need. The sector should be given what is desirable, what is required to survive rather than being based on a given percentage. Secondly, you need to know the amount of local products we are producing in this country. We need funding assistance to satisfy local needs. If not, people will resort to importation and still pay FOREX, to the nation's detriment. The textile industry had also suffer similar lose, before 1997, the Nigerian textile industry was the second largest in Africa after Egypt with over 250 vibrant factories and running above 50 per cent capacity utilization. As at today about 60 out of existing 100 textile firms is shut, Record have it that, International Textile Industry (ITI) closed down its Isolo and Ikorodu factories both in Lagos, with about 800 people out of job, First Spinner Limited, Ikorodu, Lagos, closed down with about 500, Bhojr Textile Industry closed down with about 700 people out of job, Reliance Textile Ikeja, Lagos, closed down with about 500 people out of job. Fahibdayekh and Company Limited in Kano , closed down with more people sent to the labour market; Atlantic Textile Mill in Lagos was finally closed down in 2008 with about 800 people out of job after a partial closure in 2007. In 2007, job loss in the sector was about 10,000 when the largest textile company in the country, the United Textile Mill in Kaduna State closed down with about 5,000 people sent to labour market. Atlantic Textile Mill in Lagos also partially closed down It should be noted that the local textile market has a share of about 20 per cent of Nigerian textile products with the balance of 80 per cent being controlled by assorted imported fabrics. Smugglers move in and out of the country with goods (only comes in with good and leave with cash) these whish pose a great treat to FG made in Nigeria Campaign Custom effort to eradicate smuggling activities which have eaten deep into the economy and also cripple local industries has not been felt, as the market is over taken by smuggled goods. Nigeria imports everything including labour since the university produce half bakes graduates yet the government embarks on Made in Nigeria Policy. The British High commission said there is noting to export from Nigeria apart from crude oil, yet the government dreams of becoming one of the world economic countries in 2020. Nigeria likes other developing countries like China, Brazil, India export en-mass to enrich there economy while the green land spend about 3 billion Us dollars annually on foods importation. Agricultural products which our economy was based on in time past has been neglected, coco, timber, groundnut, palm Oil are no longer exported. The level of decay in infrastructure will jeopardize the proposed made in Nigeria policy. With the poor infrastructure, local manufacturers have the problem of competitiveness. Our product can not compete with international standard due it standard, Nigeria producers dish out best of sub standard to the teaming Nigeria buyers whom patriotic zeal to purchase made in Nigeria detorate their health or send them to early grave. Last week over 40 people were diagnosed of Gastro-enteritis after they were reportedly hit with severe stomach pains from consuming contaminated groundnut oil produce by a local company in Kano But with all this challenges face the manufacturing sector of the country, Minister of Commerce and Industry , Chief Achike Udenwa maintained that Nigeria products are of high quality compared to products from other countries, He called on citizen’s to imbibe the virtues of consumer patriotism to Nigeria made product like the developed nations have done in order to have a strong industrial base.