Earlier this month, the Federal Government launched the ‘Nigeria First’ policy, mandating all federal ministries, departments and agencies (MDAs) to prioritise locally made goods and services in public procurement. Industry experts however express concern that this new policy is not very different from similar policies in the past, aimed at reviving local manufacturing, which they said, did nothing for the sector, TOBI AWODIPE reports.
When the Federal Government announced the Nigeria First Policy initiative, it was greeted with applause and fanfare, especially by manufacturers, members of the Organised Private Sector (OPS) and the larger business community.
This policy is supposed to stimulate local production, reduce import dependency and foster national pride in Nigerian-made products.
However, some industry stakeholders have noted that while this policy shows a lot of promise on paper, it is not the first time this kind of policy will be introduced, pointing out that similar policies have been created in the past and did not have any effect on the sector. Notable is the Buy Nigeria policy and the Executive Orders 001, 003 and 005.
Nigeria’s manufacturing sector is in an endless battle with low productivity and limited contribution to the national economy. The sector’s growth slowed to 1.38 per cent in 2024 owing to worsening macroeconomic challenges amid shrinking consumer spending and high borrowing costs. Its contribution to the country’s gross domestic product growth continued to decline year after year as manufacturers battled infrastructural deficits, unreliable power supply, poor transport logistics and expensive credit; severely impairing their ability to produce competitively.
Reacting, the Executive Director of Universal Luggage Industries Ltd and former chair, Manufacturers Association of Nigeria (MAN), Apapa branch, Frank Ike Onyebu, noted that this is not the first time a policy such as this would come up as the last two administrations created some protectionist policies to boost domestic industries and curb smuggling. He said while the government might have good intentions, the recurring problem remains implementation.
“We’ve seen a lot of good policies come and go with zero implementation as there are always lots of stumbling blocks within the government itself and its agencies. For whatever reason, maybe personal interest, it is almost like they never want these policies to work. We are usually overjoyed when we get these kinds of pronouncements from the government, but we never see them implemented. At the end of the day, they end up just dying quietly till the next government comes up with its own policy.”
He pointed out that everyone, especially the government, must understand that no industrial revolution can happen unless the country creates an environment where manufacturing can thrive. “Manufacturing can drive this economy. Since the 70s, it has been one story after the other, one policy after another. We’ve had many governments saying they want to industrialise but none has done it. If this government, for instance, buys made-in-Nigeria vehicles, more vehicle assembly and vehicle manufacturing plants will take off.
“If the government leads by example, and shows interest in locally manufactured goods, even if the manufacturers don’t get it right 100 per cent at the onset, they will eventually catch up. We were here when China started manufacturing and we used to mock Chinese-made goods but today, they have become the biggest manufacturers in the world,” he said.
He lamented that Nigeria’s manufacturing sector is worsening daily, and they had hoped the government would focus on manufacturers seeing that the oil sector is no longer what it used to be as more countries are transitioning to green energy.
“To the best of my knowledge, no single manufacturer benefitted from the previous Executive Orders or policies. Those who tried to make use of it quickly realised it was useless. We are hoping this will be different, but unless the government does things differently, it will go the way of its predecessors,” he said.
National President, Association of Small Business Owners in Nigeria (ASBON), Dr Femi Egbesola, said while they remain optimistic that this policy would be different and help businesses and industries, he fears it will end up being just a name change. “It is the same policy that has been metamorphosing from one government to the other with different names. The policy stipulates that the government must be the first purchaser of Made-in-Nigeria products and services but if we check their books now, is the government patronising Nigerian products and services?”
He regretted that implementation has been the bane of so many policies and when implementation is not done or not done well, the impact cannot be measured. “We have been stressing that for the government to form any policy, it must be done with the buy-in of critical stakeholders. Many of these policies were created without the contribution of the real sector and when you don’t have that in place, the government itself may not really understand it to the point of implementing it the way it should be, talk less of monitoring and evaluating it.”
He noted that since the policy was announced, there has been no meaningful impact. “We have not seen any meaningful impact in the purchase of products nor any follow-up to that policy regarding implementation, whereby enforcement is being done. Local manufacturers are not being encouraged, and the real sector is dying. Moreso, it is not just telling Nigerians to buy made in Nigeria, it’s also about ensuring that counterfeit and substandard products do not find their way into the country through land and sea borders as they do now. It goes beyond announcing Executive Orders or policy pronouncements. We must be intentional about it and sadly, I am not seeing that energy yet,” he said.
Stressing that no single policy supposedly crafted to stimulate business has been impactful, he said if they were, the country would have seen more SMEs and industries springing up. Rather he said, SMEs and industries are collapsing at an alarming rate. “We are seeing SMEs closing shop and data supports this. Many MSMEs and businesses are dying daily. Executive Orders 001 and 003, the Business Facilitation Act, improvements in ease of doing business and so on, have had zero impact on us. Government needs to begin to look at where the gaps are, identify and address them, else, this would be a waste of time,” he said.
On his part, the Chief Executive Officer (CEO) of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, explained that because ‘Nigeria First’ is a procurement and not a trade policy, it is currently only applicable to the Federal Government and MD,s; but what would make any difference remains effective implementation.
“Executive Orders 001, 003 and 005 were meant to compel MDAs to patronise locally made goods and services but these have not worked and sadly, nobody ensured implementation. For this policy to work, there must be a full commitment to implementation. In terms of procurement, the government is still the biggest spender and one of the best ways to support local production is through procurement. It is not very possible to compel citizens to buy Made-in-Nigeria, the best government can do is advocate or apply ‘moral suasion’. The private sector cannot also be forced to buy Made-in-Nigeria as they buy what will favour them.”
He noted that with a budget of N54 trillion, if the government spends even a quarter of that on local procurement for goods and services, over N10 trillion will be injected into the local economy. “There are so many things that can be purchased locally, vehicles, computers, fabrics and so on which are still being imported even by the government and its agencies. The truth is that if the government spends these funds locally, the capacity and quality of local manufacturers will improve and they will become more competitive overall,” he said.
Noting that while the policy is geared towards procurement, he said not all products have a heavy procurement impact. “Consumer and FMCG goods for instance are largely bought by Nigerians, not the government. If the producers are facing production challenges and costs are high, they will still continue to face these issues, and no amount of policy would help them.
“Businesses that would mostly benefit from this policy are manufacturers of furniture, automobiles, computers, pharmaceutical products, construction, textile producers and so on. Manufacturers in the consumer products sector will largely not benefit. However, even those sectors listed above will only benefit if the policy is implemented and followed through properly. For the others, unless we support and improve our operating environment so they can bring down the cost of goods, they will still continue to suffer as consumers will always go for what is cheaper- even if they are imported goods.”
He said the bigger issue- beyond creating policies- is to help local manufacturers reduce costs to make them more competitive and effectively protect them with trade policy instruments. “If these are not done, the policy alone won’t achieve much because it doesn’t cover all sectors,” he said.
