One year after, manufacturers ‘hopeful’ of reforms to salvage sector

One year after Dr Doris Uzoka-Anite was sworn in as the Minister of Industry, Trade and Investments, manufacturers and industrialists are yet to feel any improvement in the real sector as their situation has become even more dire, TOBI AWODIPE writes.

Twelve months ago, when Dr Doris Uzoka-Anite, the Minister of Trade and Investment took charge at the ministry, she made some promises and goals she was going to work on, including attracting more foreign investments into the country, promoting a business-friendly environment for indigenous businesses to thrive and working towards creating more jobs.

She also said the administration would lift people above poverty and ensure that small and medium enterprises and industries that are already existing become more flourishing, expand the growth of non-mineral resources, optimise the country’s human resource capital, improve and rebrand the country’s image as investment-friendly as well as revitalise, innovate and modernise industries to encourage productivity and competitiveness among others.

Today, local manufacturers and industry stakeholders say most of their expectations have not been met, promises remained unfulfilled and their situation has gone from bad to worse. They lamented that more investments, both local and foreign, rather than coming in, have hurriedly left the country in the last one year than in the past five years combined. They pointed out that thousands of businesses have packed up in the 12 months and the ministry doesn’t seem overly concerned with their struggles or rapid failure of businesses.

Director-General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Sola Obadimu, argued that while the minister is trying her best, the powers to stabilise the business operating environment are, to some extent, out of her hands and external to her Ministry.

He said businesses continued to be endangered because of the continuing instability in the operating environment as the economic operating indices remain unstable, fluctuating too rapidly including FX rates, interest rates, headline inflation, custom duties, unstable energy tariffs and fuel prices and so on.

“Additionally, infrastructure (roads among others), security and ports’ operational efficiency could be better both for exports and imports. These are the factors endangering businesses. The earlier we can stabilise the fluctuating rates/tariffs and improve infrastructure, businesses would be able to operate more predictably and plan better,” he said.

President, Association of Small Business Owners of Nigeria (ASBON), Femi Egbesola, lamented that neither the minister nor the ministry has lived up to their expectations. He said rather than getting fresh investments into the country, conglomerates are leaving in droves monthly and rather than improving ease of doing business, it has become even harder to do business.

“This is why many local businesses are closing up. We have fallen badly in the global ease of doing business ranking this year, which shows the true state of things. Unemployment and poverty have skyrocketed, and business activities and productivity, which are supposed to create employment and fight poverty, have been negatively affected. About 63 per cent of Nigerians live below the poverty line, an indication that businesses and productivity are suffering. The naira is dropping daily because we import far more than we export, showing that the real sector is struggling.”

Lamenting that the sector and economy in general are retrogressing, he said, “According to the NBS, from last year till date, over two million businesses have collapsed and with the way things are going, if care is not taken, by the end of this year, we would have double of that figure. The economy is in the worst shape ever, the cost of doing business is extremely high, there is no business confidence or incentive for anyone to invest in Nigeria, investors are wary of our fiscal policies and there is heavy capital flight. People are moving financial and human resources out of Nigeria, a sign that the economy is shrinking with no reprieve in sight.”

Speaking on the promised palliatives for the sector, Egbesola said they have been largely unproductive and unimpactful. “They said they gave out N50,000 each to 100,000 nano businesses. Aside from the fact that the money does nothing to improve businesses, 100, 000 businesses compared to roughly 40 million nano businesses is a drop in the ocean. If they truly reached 100,000 businesses as they claim, that is less than one per cent. What impact are they expecting to see really? Of the N75 million that was promised to larger businesses, we know of just 10 that have been approved. Worse, the process is not transparent such that we cannot verify their claim of reaching 100,000 businesses. Many of these businesses don’t even exist, it is ‘political’ business owners getting the scarce funds rather than the real business owners.”

He further added that giving people stipends without creating a thriving environment will do no good. He said rather than giving stipends and handouts, critical infrastructure needed for businesses to thrive should be fixed to help them grow. “These so-called interventions are a waste. We have had them in former administrations, from Yar’Adua to Jonathan to Buhari and now again, and they have never worked, these won’t work either because the ministry is doing the same thing that was done in the past, which failed. We need fresh innovations to save the sector,” he said.

Supporting Egbesola, the National Vice President, Nigerian Association of Small-Scale Industrialists (NASSI), Segun Kuti-George, said the ministry has failed them in all areas. “None of the promises made to us have been fulfilled. Businesses are laying off and closing down because of the many problems in the sector. I have just sent my staffers on a compulsory one-week leave because there is no raw material to work with. At this point, we need affordable funding. The N50,000 and other small promised funds cannot do anything to revitalise businesses. The process to access the larger funds is the most cumbersome I have ever seen and they don’t want to change it.”

He argued that the funds should be channeled through known Business Member Organisations (BMO) to give out to members as they know the real business owners. “They asked us to fill out online forms and we got no results after filling the numerous forms. Looking at the conditions they set out, it is clear that people in the ministry have never done any form of business, I doubt they even know where the businesses or BMOs are. To my knowledge, not a single NASSI member has gotten any of these funds the ministry has been talking about in the last one year. They put some money in development banks and place all manner of conditions on the funds that most of us cannot fulfill. At the end of the day, they give the funds to their friends and say they funded so and so number of businesses and we wonder why the sector is collapsing. The Chinese companies that come here get funds at two per cent at most, with a conducive business environment, that is why they can produce massively at reduced costs,” he said.

Chief Executive Officer (CEO), Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, pointed out that most of the critical variables affecting the real sector are not within the remit of the Ministry of Trade. “The average industrialist’s problems are FX, energy costs, port problems and high tariff on import duties, transportation, funding, high interest rates and so on but none of these issues are directly under the purview of the ministry.”

He regretted the ministry’s limited power over the numerous problems businesses and industries are facing, adding that it currently does more advocacy but must go beyond that to be effective.

“Currently, the ministry does more supervision. When it comes to the core issues affecting industries, it is clear that it lacks the power to do much. When those 41 items were placed under import prohibition a few years ago, some were raw materials for industries and they naturally kicked against it. When the Ministry of Trade and Industry was approached to intervene, they said they were not consulted and were unaware. Many critical decisions are taken that the industry is not aware of or consulted with,” he said.

Adding that the current structure doesn’t empower the ministry, he said, “Ask industrialists their five top problems, none of them are under the ministry’s purview. There is a major issue with the value proposition of the industry itself; how much authority do they have in promoting industrialisation? When we talk of funding, do they have the capacity to deliver funds? Can they manage funds? What structure does the ministry have to manage the promised funds they said they would disburse to ensure it doesn’t go the way of others? We all saw what happened with the Anchors Borrowers’ Programme, the same will happen here because there is no structure within the ministry. There is a major lacuna between the mandate and the authority the ministry has as far as the revival of industrialisation is concerned.

“Industries are complaining about lack of infrastructure, what power do they have to fix the roads? Or fix the power situation, help with the high duty on importation of raw materials, or improve access to funding? There is a big question mark on the value of the ministry itself, maybe we need to go back to the drawing board.”

He added that in the meantime, the ministry can do more on advocacy and working with other ministries as problems affecting manufacturers cut across different ministries. “They should regularly interface with other ministries and key agencies; the ministry of works, customs, ports, ministry of power and so on. They should get creative to strengthen their relevance and work on solving the problems industries are facing. The Ministry of Trade should be the one carrying the problems of manufacturers to FEC meetings, which all ministers and the president himself attend and look for solutions on their behalf. The ministry must innovate and go beyond what they are doing now, which is next to nothing. Too many multinationals have left the country, businesses are failing daily, and who is taking up their case and looking for solutions?” he queried.

He asked about all the numerous foreign investments that the minister said had come into the country in the last one year, adding that the economy should have begun to feel the impacts of the said investments by now.

According to the Executive Secretary, Nigerian Association of Small and Medium Enterprises (NASME), Eke Ubiji, he said the ministry has not impacted businesses in any significant way but wouldn’t blame the ministry too much as much of the country’s problems, which is negatively impacting businesses, is beyond it. “Fuel subsidy removal and the FX crisis have worsened the situation badly. The minister cannot make all those promises in isolation, she’s not operating in a different environment. She might have made all these promises in good faith, but the economic realities have made these impossible to achieve. I am not blaming her but at the same time, she’s a member of the Federal Executive Council (FEC) and should realise, alongside the president that things are not going well for industries or Nigerians as a whole.”

On the exit of several multinationals in the last one year, Ubiji said while neither the minister nor ministry have full control to stop the companies from leaving, he said the businesses left because of the hardship businesses are facing.