Import Prohibition: Indigenous Printers Groan As Outsourcing Of Printing Jobs Abroad Booms
Professional Printers in Nigeria are raising fresh concerns over a disturbing phenomenon. They allege that print and retail packaging and labeling jobs, which Nigerian firms have capacity to handle, are being discreetly outsourced to foreign companies and shipped back into the country in different guise through the various entry ports. This is in spite of the products being on the import prohibition list of the Nigeria Customs Service. The manifest effects are in huge loss of revenue for local printers and foreign exchange earnings for the nation. OLAWUNMI OJO looks into the printers’ complaints, reasons adduced by the contractors, the alleged complicity of officials at entry ports and implications for the economy.
IN 2013, the Federal Government launched a National Industrial Revolution Plan (NIRP) to create an enabling environment to support and encourage local enterprise as well as stimulate local production of goods and services. The plan, which also sought to promote local patronage of indigenous services, was part of broad actions to grow the economy to become one of the top economies in the world. At the time, it was envisaged that the initiative will save the nation millions of hard-earned foreign exchange.
It was in furtherance of the aforementioned goal that past administrations, over the years, put in place and upheld policies and legislations to discourage patronage of foreign goods and services, including the indiscriminate dumping of products, especially those that the country has expertise and potentials to produce or offer.
This explains why from the mid-1970s up until recent years, Nigeria’s main trade policy instruments shifted markedly from tariffs to quantitative import restrictions, particularly import prohibition and import licensing.
To reflect this shift, Nigeria’s customs legislation established an import prohibition list. The pervasive use of import prohibition as an instrument of trade policy in Nigeria derives from a long-standing import policy regime, which was designed to promote industry, employment and balance-of-payments objectives in the context of an import substitution-industrialization strategy.
Key elements of this regime include protecting existing domestic industries and reducing the country’s perceived dependence on imports, the major goal being to increase the local content of Nigerian industrial output.
One of such industries penciled to benefit from the resultant patronage of indigenous services is the print and packaging industry. This is because printing and packaging materials of any sort, except religious materials such as the Bible, Quran and the like, feature on the prohibition list.
Rightfully, the policy of partial or outright ban on the importation or patronage of certain products and services have always drawn plaudits from manufacturers, service providers, employees and other stakeholders in the nation’s small and medium enterprise (SMEs) sector. This is due to the attendant effects the policy is meant to have in terms of value and job creation, income generation and of course, the ultimate contribution to the GDP and economy.
In the wake of government’s ban on outsourcing of printing jobs to other countries and the importation of such other print and packaging paraphernalia, major printers and other service providers in the industry expressed joy at the progress the policy would engender in the industry.
As anticipated, it took no long a time before the industry began to witness a flurry of activities and patronage. Printing jobs, which hitherto were the exclusive preserve of foreign print companies, owing to the false belief that the quality of their work was superior to those obtainable on the home-front, flooded their workplaces and workshops. The consequence was an upward surge in productivity, employment and income.
Consequently, some of them took the challenge by investing heavily in equipment upgrade to increase their capacity to handle some of these jobs in terms of volume and quality.
However, if recent words coming from stakeholders in the print business community are anything to go by, that initial flurry in business appears to be quieting fast. Among other reasons perceived to be responsible for the lull, concerns are now being raised about a disturbing phenomenon whereby publishing and allied firms are returning to the old way of outsourcing to firms in other climes, printing jobs for which Nigerian companies have expertise and capacity to deliver.
Specifically, allegations are now rife that big publishing firms win contracts worth billions of Naira from government to print and supply textbooks and exercise books and then take them to Asia to be done and shipped back into the country. The same is said to apply to companies that need one form of printing or the other to be done on their retail packaging films.
There are also insinuations that a lot companies owned by some expatriates, mostly Asians, would, rather than patronize indigenous printers, take their print and packaging material jobs for printing in their native countries, in most cases India and China, before shipping them back through the nation’s ports.
A Managing Director of a food and drugs packaging firm in Onitsha, who preferred anonymity, however gave insight into what is responsible for the re-emerging trend.
According to him, his company prefers to take the jobs outside the country because of a couple of reasons ranging from low quality standard, expensive price quotations from Nigerian printers compared to what obtains outside and inability to deliver on schedule.
But Stanley Chikezie, a veteran whose printing concern has been around for over two decades, said the reasons adduced by most of the companies and contracting firms are flimsy and baseless. For him, though the challenges of power and lack of support from government is peculiar for every stakeholder, a lot of printing firms yet go out of their ways to deliver jobs on schedule and with the best standards obtainable anywhere.
According to industry stakeholders, the situation is quite disheartening considering the fact that the print materials being brought in through the ports fall within the framework of items on the import prohibition list.
A studied look at the Nigeria Customs Service Import Prohibition list reveal that retail packs used in packing soaps and other forms of detergents, corrugated paper and paper boards (H.S. Code 4808.1000); cartons, boxes and cases made from corrugated paper and paper boards (H.S. Code 4819.1000); exercise books (H.S. Code 4820.2000); toilet paper, cleaning or facial tissue (H.S. Code 4818.1000 – 4818.9000), product packaging and labeling for pharmaceutical products, soap, bottling companies, cereals, among other items, are not permitted under law to be brought into the country. But that is allegedly not the case.
Mr. Solomon Titilola, a professional printer who has been in the industry for several years, bemoans the situation, describing it as an anomaly. “The situation is so bad that items like dairies, calendars, air-freshener packs, toothpaste packs, paracetamol packs and even packs of facial tissue used in vehicles are mostly outsourced for production abroad. I think this is just another way of perpetrating capital flight.
“Take for instance, if you give me a job of N10 million. I would get hands to work in my factory, a lot of people would benefit. But these guys take the job out and part with some money at the Customs point to allow shipment into the country. Aside violating the import ban on the products, they are also evading duties because those products are classified wrongly to get into the country.
“Meanwhile, since these things have been banned, we want those at the top to ask questions. These are not security jobs that you could even say we do not have expertise to print here. Besides, there are some of our members, Nigerians who have even gone ahead to acquire high-tech printing machines to handle any kind of printing jobs and deliver the highest standard regardless of the volume. Why would government or its agencies allow these outsourcing to Asians, especially Indians and Chinese who would not even do it better?” Titilola said.
Titilola is particularly saddened by the alleged involvement of men of the Nigeria Customs Service in the untoward acts playing out at the ports.
However, the Public Relations Officer of the Nigeria Customs Service, Mr. Wale Adeniyi debunked allegations of complicity being leveled against its men.
According to him, published and printed works are not under any form of prohibition. “If you have a contract job, where you print it does not matter to us, once you fulfill the obligations of import. As regards some packaging and retail packs, which the printers allude to, they do not fall within the category of banned items. They are articles on Chapter 48 so they could be imported into Nigeria once they fulfill all importation and extant rules guiding importation. These are clear issues: books, printed or packaging materials are not under import prohibition,” he said.
It would be recalled that while sharing the same concern, former President Olusegun Obasanjo, in 2004, accused the Nigerian Customs Service of “making nonsense of government’s import prohibition policy.” In frustration, he was reported to have said, ‘we just have to beg them. I think, other than begging, I don’t know what else I can do. If it is possible to run a nation without customs, I will do it.”
The same concern is re-echoed by Titilola: “The phenomenon we are complaining about has always been there. But it took a turn for the worse in recent times. Suddenly, jobs for which we have expertise are now taken to countries like India and Malaysia. The sharp practices going on at the various ports are causing huge revenue losses for printers and other stakeholders in the industry. And I strongly feel government needs to do something about this. It is not enough to just put up policies, there should framework to ensure their implementation to letter,” he said.
Goddy Okobi, a printer and a sub-committee chair of Chartered Institute of Professional Printers of Nigeria (CIPPON), and another stakeholder in the industry, Mr. Samson U. Samson, the Managing Director of Hotrock Concept, a Lagos-based printing firm, also concur with Titilola’s standpoint. They both called on the government to wade into the situation.
Samson complained bitterly of how indigenous printers are being deprived of services by both Nigerian and foreign-owned companies. Citing instances, he mentioned a Nigerian owned-soap manufacturing company located on Acme road in Ogba area of Lagos but whose Nigerian owner has given a standing order to its staff never to contract their jobs to any indigenous printing company.
The story is the same with a mosquito coil producing company in Ota, Ogun state, whose Indian owner vowed never to patronize indigenous printers. According to him, he is satisfied with making his orders of coil packs from China twice yearly.
“When some of them bring those labels back, they stuff them discretely in containers and cover them with other approved products such that it may be difficult to fish out at the port. I think our Customs and Immigration personnel need to be more detailed when doing clearances of goods at the ports,” he said.
In a rather pathetic case, Samson made specific reference to how a Nigerian Printing firm based in Shomolu, Lagos was made to procure printing equipment worth several millions of Naira on the strength of an initial understanding with a Lagos-based company, owned by Lebanese, in the believe that it would provide label print services to them. The said Lebanese firm would later backtrack, choosing instead to outsource the labels to another company in their native land.
“Those labels are now produced in Lebanon and shipped back into Nigeria by the same firm who made this particular member of ours to approach a bank for a loan of several millions of Naira just to enable him procure the sophisticated equipment required to do their jobs.
“I must tell you that the man in question is now in pains because he simply has no means of recouping his huge investment in the machinery acquired. Meanwhile, the bank that granted the loan is also on his neck for loan servicing,” he said.
Lending its voice to the issue, the National Association of Cottage Industrialists of Nigeria (NACIN) also urged the government to “ensure strict implementation of the ban on imported products as a means of guaranteeing the survival of small and medium-scale enterprises and to create employment for the nation’s teeming graduates.”
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