‘Nigeria, others need to produce goods in high demand for economic integration’
• Manufacturers in Amuwo-Odogin, Kirikiri zones lose N20b yearly to parlous infrastructure
A Professor of Economics, University of Ibadan, Prof. Ademola Oyejide, stated that lack of product diversification in Nigeria and other African countries is the major factor for the low level of intra-African trade.
According to him, for regional integration to deepen on the continent, African countries must produce goods that have high demand from neighbouring and other countries across the continent.
Besides, with access to their factories becoming challenging as a result of parlous infrastructure and parking of trailers along their industrial corridor, manufacturers in the Amuwo Odofin and Kirikiri Industrial Zones have decried a yearly loss of over N20 billion in revenue.
According to the operators, the invasion of trailers and other articulated vehicles to their industrial areas has restricted access to factories, and also led to high inventory in the sector.
The Don at the 10th edition of a business luncheon organised by Manufacturers Association of Nigeria (MAN) Apapa Branch, in Lagos, said the situation could also pose a challenge to activities of the African Continental Free Trade Agreement (AfCFTA).
“If you want to sell something to somebody, it must be something they want to buy. When you have complementary goods between the buyer and the seller, trade can take place, whether there is tariff or no tariff; trade will take place if the goods complement the needs. We have a lot of food products moving across west Africa without any agreement, but if you look at what African countries produce generally, they are not what other countries in Africa want, ” he said.
“This is the reason why when we produce cocoa, it goes to Europe. When we have an increasing diversification of products by African countries, complementarity would increase because at that time you will see many African countries buying goods from each other. It is a matter development in different countries, but that has to happen before you really can have a regional integration,” he added.
Earlier, the Chairman, MAN, Apapa Branch, Frank Onyebu, said a recent research carried out by Centre for Trade and Development Initiative of University of Ibadan states that ‘a three-phase liberalization tariff rates from five per cent, 10 per cent and 20 per cent to zero would likely generate a higher surge of imported manufactured goods to the tune of 159.5 per cent, 183 per cent and 251.4 per cent on the average’ during a 15-year period.
“The report goes on to say that Nigeria, being one of the least in terms of import penetration from African countries, makes the country an export target for many African countries under AfCFTA.
“According to the report, import is expected to surge in all the manufacturing sectoral groups and by extension the 77 subsectors in the third phase of the liberalization. I daresay this is really frightening and a food for thought for Nigerian manufacturers going forward,” he said.
Onyebu, who was represented by the vice chairman, Apapa branch, Raphael Damilola, said: “Manufacturers within our areas of operation are beset with a lot of challenges. These include dilapidated roads, poor power supply, multiple taxation, security challenges, among others.
“However, beyond these obvious challenges, manufacturers, especially those within the Amuwo Odofin and Kirikiri Industrial areas are faced with additional challenges with regards to access to their factories. This is because of the invasion of trailers and other articulated vehicles into the industrial areas. With little/no regard to the harm they are causing to the economy, the drivers of these vehicles often take up every inch of the access roads thereby making access to factories often impossible”.
He noted that this situation has led to most factories accumulating large stock of unsold inventories since customers no longer have access to the affected factories.
Some members, according to him, have, in desperation, turned to using barges/pontoons to ferry customers’ trucks in order to sell their inventories, adding that, overall it is estimated that over N20 billion is lost yearly by manufacturers within the Amuwo Odofin and Kirikiri Industrial zones as a result of dilapidated infrastructure.
“We do not need a soothsayer to tell us that things are not all rosy for the manufacturing sector in Nigeria, especially as the implementation of the African Continental Free Trade Agreement approaches. Adequate structures, therefore, must be put in place if manufacturing in Nigeria is to survive. First of all, the infrastructural challenges should be tackled aggressively. The roads, especially roads to the industrial areas, must be fixed without further delay. Power supply to industries should also be tackled to ensure competitiveness/survival of local industries.
“The menace of trailers and other articulated vehicles must be given the urgent attention it deserves. The government should find a way of clearing access roads to the Ports as well as the industrial areas. The government should also work with manufacturers and other stakeholders to improve the ease of doing business”, he added.
The Governor of Lagos State, Babatunde Sanwo-Olu, said AFCFTA is embedded with the opportunities of creating a unique continental market for goods and services, tapping into regional export destination by the Small and Medium sized enterprises, create employment for Africa’s bulging youth population, and expedite the regional and continental integration process.
Sanwo-Olu, who was represented by the Permanent Secretary, Ministry of Commerce, Industry and Cooperatives, Dr. Bola Balogun, said on the part of the state government, they shall continue to improve the social and economic environment through the holistic implementation of the themes development agenda that lays emphasis on traffic and transportation, health and environment, education and technology, making Lagos a 21st century economy, entertainment and tourism as well as security and governance, as a means of achieving the aims of the administration.
“As a responsive government, we are open to collaboration and dialogue that would drive sustainable development in line with the developmental goals of this administration,” he stated.
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