Thursday, January 5, 2012

2011: Industrial sector still comatose as more firms close shop

From Ayodele Samuel, Lagos The 2011 is gradually ticking its way to history, but bruises it afflicts on corporate organizations, especially the manufacturing sector can’t be wished way. Worthy of note of course is the ever present unfavorable business climate which 2011 calendar year inherited from 2010. The dilapidating infrastructures, a harsh business environment; unstable power, absence of security and host of other obstacles continually beset 2011 without succor. The Federal government under President Goodluck Jonathan had raised hope of infusing fresh air that would jump-start the comatose manufacturing sector mid-year when he was sworn in for his fresh mandate having successfully, completed his joint ticket with late Umaru Shehu Musa Yar’adua. The re-christening of former Ministry of commerce and Industry as Trade and Investment Ministry man by former Minister of Finance, Olusegun Aganga raised positive expectation but it turned out the usual dashed hope with virtually no significant improvement recorded. The view of Chairman, Manufacturers Association of Nigeria MAN, Ikeja branch Isaac Agoye captures it all. He lamented that the 2011 like years before it, never give expected impetus to manufacturing sector. 2011, as MAN scribe further lamented leaves the sector in throes of bad shape as many struggling businesses got wiped out. “The capacity utilisation has nosedived from 70 per cent in the 1980s to 45 percent in 2010. The ever busy industrial estates have now become shadows of their past glories and what government at all levels keep saying indirectly is that they need more funds and the manufacturing sector must provide it without a commensurate provision of the required enabling environment,” Agoye added. Nigeria has lost what used to be industrial estates. In 2011, the remnants of what used to industries at once thriving Ikeja industrial estate in Lagos have closed shop and in their ashes, spring up churches, event centers and relaxation spots. They closed shops not because the plot housing them has vanished, but primarily due to unbearable hostile, very challenging business atmosphere. The key being absence of power and secondly lack of security. Though government managed to unveiled power sector road map to resuscitate and rejuvenate the sector, the reforms is yet to impact positively as PHCN staff have given conditions that must be met if power reforms must be carried out. However, a novel idea of Public Private Partnerships (PPP) was given considerable vent during the year. The government realising that it can’t do it all alone is partnering with private sector to execute some key projects in a form of partnership. The construction sector was virtually in comatose as its key ingredient component, cement witnessed price tumbling severally. Beginning January 2011, cement price had risen from 2,600 to N3, 000 with disastrous effect on the quality of blocks and prices of other building materials leading to unprecedented rise in accommodation cost. It took President Jonathan intervention to get a firm commitment from cement manufacturers to peg the price at N2, 000. Nigeria is virtually a dumping ground for import items without a corresponding export making Nigeria to maintain export deficit. A report obtained from the National Bureau of Statistics (NBS) showed imports in the second quarter of the year were also 175.5 percent higher than the N1.22 trillion recorded in the corresponding period in 2010. According to the Executive Director of the Nigerian Export Promotion Council (NEPC), Mr. David Adulugba, the agency disbursed a whopping N45 billion in the second quarter of 2011 under the Export Expansion Grant (EEG) scheme designed to induce performance of non oil exporters in the country. The initiative certainly paid off as many local manufacturers attested to the fact that they were part of the grant which definitely saw their business kicking off to another new level but not including the Leather and Allied Products Manufacturers Association of Nigeria (LAPAN) kicked against the total implementation of the Scheme. LAPAN President Alhaji Mustapha Nabegu, said the EEG scheme has weakened the capacity of the nation’s manufacturing sector to create jobs and drive economic growth. On the battle for standard, The Standards Organisation of Nigeria (SON) seems to be the most active government agency in the sector. It set up in mid-year, a consumer compliant desks in major markets across the country to check substandard products. The agency decided to take proactive steps to drastically reduce the influx of substandard products into the country, by destroying several containers loaded with substandard products worth millions naira. Another highlight of the agency that attracted divergent views include a claim by the agency to have spent about N20 million to destroy more than three million fake and sub-standard tyres nationwide. Experts say hope for active industrial sector may not totally be lost after all. The government, they say just have to rise to the occasion and be sincere in implementing experts’ recommendations. The government will have to genuinely tackle the poor electricity issue, it will have to create tax holiday and abolishing multiple taxes; it has to wake up to contain the security challenges that has make investment elusive and finally show sign of commitment to tackle corruption. The Nigerian textile industry was the second largest in Africa after Egypt’s in 1997, with over 250 vibrant factories operating above 50 per cent capacity utilization. Then, the local textile market had a share of about 20 per cent of Nigeria’s textile products with the balance of 80 per cent being imported. As at 1980, the textile industry in the country could boast of over 175 textile factories, but today only about 25 are still producing, as most of them have closed shop. For instance, Afprint, once a household name in Nigeria had since diverted to other businesses. The company is now selling cars and edible oil. Undoubtedly, the textile industry had its unfair share of the country’s penchant for foreign goods, smuggling, faking and counterfeiting. The recent spate of closure in the industry was driven largely by smuggling at the borders, failed government policies, high operating cost arising from prohibitive raw materials, energy cost and sheer lack of political commitment to industrialisation by Nigerian politicians. At its prime, textile factories in Kaduna and other cities were the second largest employer of labour after the government . But for over a decade now, the closure of these factories and the low capacity utilization of existing ones have become a very disturbing feature in the Northern states and the succeeding governments could not do much to redress. The workers that were laid off had since joined the unemployment market,while taxes in billions derived by governments from these factories had become a thing of the past. In his mission to industrialise the North, the late Sardauna of Sokoto and Premier of the defunct Northern Region, Sir Ahmadu Bello started by establishing textile factories to use the large quantity of cotton grown by farmers in the North. Thus, the Kano Textile factory in Gwammaja and the Kaduna Textile Mill (KTL) were established , transforming the two cities into textile marketing cities with other related factories such as weaving and spinning springing up.

Press Statement on Wednesday attack Daily Trust in Kano

The Young Journalists Forum has strongly condemn Wednesday’s attack on the Kano regional office of Media Trust Limited, the publisher of Daily Trust and Weekend Trust title, by armed thugs over a report that the Kano State government has supported the removal of petroleum subsidy. In a press statement signed by its president, Ayodele Samuel and Secretary, Zacheaus Somorin, the attack purportedly sponsored by the Kano state government is described as irresponsible of a democratic government and infringement on the freedom of the Press. “No sane government in this democratic era would clampdown on the media for carrying out its function to inform the public of government policy, but the action of the state government is not only condemnable but rejected by the media,” the statement said. In what it described as first attack and gaddafian strategic crackdown, the young journalists forum argued that bourgeois ideologues of the state government shows that Nigerian cannot see the truth about the fuel subsidy facade. The group therefore demanded for immediate apology from the state government while calling on president Goodluck Jonathan to reverse fuel subsidy removal which it described as a '' nauseating economic haven for upper class banditry of the nation's resources." The journalists’ group again questioned president Jonathan on why the citizens cannot enjoy subsidy, which they said is the only benefit they derive from the government since they provide other basic things themselves – water, education, electricity, health, clothing, food and shelter. YJF posited that the capitalistic tendency of President Jonathan is becoming unbearable saying his excuse of cabal, the esoteric clique, blamed for the hindrance to the possibility of building a local refinery is stomach-turning. The forum also declares its total support to the organized labor in its fight against the anti-people government of President Goodluck Jonathan. “We are in support of all actions to force the government to reverse the removal of petroleum subsidy which is presently causing untold hardship to Nigerians. The forum however urged all young reporters regardless of their beat to give prompt and effective coverage to all Labour activities during the strike which begins Monday until the will of the majority of Nigerians is done. Ayodele Samuel, Lagos 2348074420617,

Cashless economy: Lagos banks, depositors shun CBN directive

As business activities fully kicked-off in Lagos on Tuesday, banks and depositors shunned Central Bank of Nigeria (CBN) policy on cash-less economy as cash deposits above the stipulated N150,000 was being lodged in banks across the state. Some commercial banks monitored by Peoples Daily in Lagos, observed through banks’ lodgment books showed that customers still conduct their usual transactions at GT Bank, First Bank and Oceanic bank in Ogba. However, only few banks in the metropolis have started debiting service charges on transaction above N150,000 while customers argued that the policy will not succeed in the state as no facility has been put in place to ease the mode of payment. A depositor at Ogba branch of Oceanic bank who spoke to our reporter confirmed lodging about N300,000 to his account but only after a serious argument with the cashier. “I threatened to close my account; Imagine, I am into selling tyres, which involve about N500,000 daily; Will I keep the money in my house and later lose it to robbers or tell a mechanic, who can hardly operate his phone to do e-payment, without losing the customer to another competitor in the business?” he queried. Another trader, Mr. Sunday James, who spoke to Peoples Daily correspondent in Lagos yesterday said the CBN should put a lot of things into consideration before coming up with such policy. “Although it is helping some people doing business but its not helping the informal sector where heavy cash exchange hands daily. The CBN should look for another alternative that will benefit we traders in the state. If I need N500,000 to buy goods in the market and its impossible to cash it once then business will not flow”. Customers however expressed the fear that all extra charges associated with e-payment channels would be transferred to customers at the end of the day, thereby making banking service expensive in the country. With the commencement of the e-payment policy the large crowd within some banking halls in Lagos are expected to reduce as customers are expected to engage in mobile banking and electronic funds transfer without going to the banks. Lagos traders not prepared for cashless economy Thursday, 29 December 2011 18:11 administrator From Ayodele Samuel, Lagos As the Central Bank of Nigeria (CBN) prepares to on Sunday, 1st of January 2012, traders in the Computer Village, Ikeja; Balogun Market in Idumota among other places visited by People’s Daily in showed low preparation to go cashless. The trades lamented poor information about the policy while a few others claimed complete ignorance on the envisaged policy introduction. Samuel Akitu, who deals in of computers in Ikeja, said many Nigerians are not adequately informed by the CBN on how the policy operates. “Many of our customers who buy up to 300,000 to one million worth of goods daily are not inform we don’t have enough POS machine so how do we go cash less” he queried. Also, the leader of New Computer Traders Association, Mr. Eze Nbueze said its members handle more than N100 million worth of transactions daily. “All together, we handle more than N100 million here daily; the CBN does not make provision for we the traders but we will encourage our members to embrace it”. Also at Balogun market, some traders said the policy is dead on arrival. “I am not aware that I will not be able to deposit or withdrawal N150,000 but if government wants it like that, we will go back to our traditional method of saving money,” Mrs. Akin Olaosebikan told People’s Daily. The African Renaissance Party (ARP) Lagos state chapter argued that the CBN cashless policy is a new year economic disaster package to Lagosians, the policy is doomed to become a colossal failure right from the point of commencement and indeed have exposed the CBN governor as incompetent and inexperienced. The state chairman of the party, Udoka Udeogaranya in a statement said, “Lagos state, chosen by CBN to experiment their cashless policy, is not ripe for a programme that has to be effective right from the word go. The effectual implementation of an all encompassing cashless policy has no chance in a state that struggles with poor electricity supply, poor information technology services, poor ICT maintenance units and poor ICT literacy. “We dare the CBN governor to visit a merchant city like Guangzhou in China and see how the Chinese government, which is austere with its economy, yet allow merchants to have their way there, while industrial cities like Ningbo, Yiwu and Xiemen can thrive with over regulatory financial policies. In the livelihoods of merchants it is cash first and prices varies, therefore regulations are minimized. “This cashless policy will see retrenchment of bank staffs as many of the work will now be piled up for information technology gadgets to do and which will culminate into high rate of unemployment that is already a threat to the nations security”. Cash deposit or withdrawals exceeding the stipulated of N150, 000 (for individuals) and N1 million (for corporate bodies) would not attract the punitive processing charge on the commencement of the pilot scheme in Lagos on Sunday, January 1, 2012.

Labour begins strike, protests Monday

The Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) have threatened to shut down the country with indefinite strike action and mass protests should the Federal Government fail to revert back to the old price of fuel by Monday, January 9. This is coming as the Joint Action Front (JAF), a coalition of civil society groups, foreclosed the possibility of dialogue with the government before the commencement of the strike. The National Executive Councils (NEC) of both the NLC and TUC had yesterday met simultaneously in Abuja and Lagos respectively, with the two labour groups issuing a joint communiqué which slammed President Goodluck Jonathan’s administration for jerking up the pump price of fuel last Sunday even while government claimed to be consulting with Nigerians. The communiqué read by the NLC President, Comrade Abdulwaheed Omar, stated in part that: “Due to this upward review of prices, the pump price for petrol is now selling for between N141 and N200 per litre nation-wide rather than N65. This prohibitive increase in price of PMS once again confirms the position of Labour that deregulation to this government means incessant price increase of a strategic product (petrol) that impact on cost of living, cost of production and the general well-being of increasingly impoverished Nigerians.” “The immediate generalised negative impact of this price increase on transport cost, food, drugs, school fees, rents, indicate that government is totally wrong to underestimate the impact assessment of the so-called deregulation policy,” the communiqué stated. Omar stated further that: “In view of the untoward hardship workers and other Nigerians are experiencing based on excessive increase in petrol prices, there have been sporadic protests by Nigerians in at least 10 cities.” These peaceful protests, he noted, have witnessed the use of unprecedented force by the police, leading to harassment, intimidation, arrests and the murder of a protester in Ilorin. The NLC boss disclosed that there was a subsisting understanding between the Congress and the Federal Government in 2009 that removal of subsidy will not commence until certain conditions were met. The conditions, according to him, include the fixing of all the nation’s four existing refineries and building of new ones, regular power supply, and provision of other social infrastructure such as railways and repairs of roads as well as elimination of the corruption associated with supply and distribution of petroleum products in the downstream sector. He decried that these conditions were not fulfilled before the latest surreptitious subsidy removal by the Jonathan administration. Against this backdrop, he said: “After exhaustive deliberations and consultations with all sections of the populace, the NLC, TUC and their pro-people allies demand that the Presidency immediately reverses fuel prices to N65. If the government fails to do so, they direct that indefinite general strikes, mass rallies and street protests be held across the country with effect from Monday 9th January, 2012”. Beginning from Monday, 9th January 2012, all offices, oil production centres, air and sea ports, fuel stations, markets, banks, amongst others would be shut down, he said. He advised Nigerians to stockpile basic needs especially food and water and called on them to participate actively in the entire efforts to make government rescind its decision. “The emphasis is on peaceful protests, rallies and strikes while refusing to be intimidated. Labour calls on the police, armed forces and other security agencies to reject orders that they turn their weapons on fellow Nigerians. We warn that anybody who does so will be individually brought to justice”. “The primary objective of this patriotic call and movement is to revert PMS price to N65, restore normalcy and reclaim Nigeria for Nigerians,” he stressed. Meanwhile, the Joint Action Front (JAF) after an emergency in Lagos yesterday, insisted on nationwide protests and mass rallies, saying the was no need for dialogue with the Federal Government. TUC President, Comrade Peter Esele, who briefed newsmen at the end of the group's meeting at the PENGASSAN office in Lagos, said that the organised Labour would not dialogue with the Federal Government on the removal of fuel subsidy, insisting that the price of fuel must be reverted to N65 per litre. Also present at the meeting was Human Rights lawyer, Mr. Femi Falana, who stressed that the battle is "a fight to finish", saying that if court wants to stop them, they have also organised their own lawyers to fight the cause. He announced that Lagos lawyers would join the protests today.