Promotion of ‘Made-in-Nigeria’ products way out of recession
Felix Aighobahi, is the Director of Sales, Euro Global Foods and Distilleries. He spoke with BENJAMIN ALADE on the survival of manufacturing sector in the face of recession, forex and logistics challenges.
How do we get out of recession?
Recession is not a new slogan to Nigeria. I can recall when we used to queue for products like sugar, matches and so on in not-too-distant-past. It should not be a death sentence for the economy. The present administration, if it can vigorously pursue its diversification slogan could turn the pains into gains.
The noise is growing louder that the present economic downturn would be reversed if Nigerians produce, patronise, sell and consume locally made goods. It is high time Nigerians embraced buying of made-in-Nigeria products and services with a national pride that “this is our own.” The craze for foreign goods and the manner majority of Nigerians go about indulging themselves with foreign-made cum imported goods had been at the expense of the economy and has left local industries completely prostrate.
Nigeria has great entrepreneurs that can compete with those we patronise abroad. I can list the Dangote Group, Eleganza, Innoson, Sona Group, to mention a few. This is the area of campaign that government should work on. Government must devise a campaign, which could change the thirst of Nigerians for foreign products, that Nigerians should embrace made-in Nigeria products. Nigerian products can compete in quality with all these foreign products that we yearn for. This country boasts of competent manufacturers that produce quality goods.
The Local Content Act policy, which was expected to boost the capacity of local producers, has been left to gather dust.
Raw materials for which there are local substitutes should also be banned. Can government divert 35 per cent of foreign exchange spent on fuel importation to give a lifeline to the manufacturing sector? This kind of thinking should be considered.
What should be the role of government in tackling recession?
The Federal Government should enlist all its media organisations, agencies and parastatals to push this campaign. It should preach ‘operation feed yourself,’ where emphasis would be on each family farming from a small scale, which can feed a family unit; to those medium and large scale farmers, who in turn would be feeding the agro allied industries.
Apart from the National Assembly enacting a bill to enforce patronage of made-in-Nigeria products, at this economic emergency period, President Muhammadu Buhari should in fact create a ministry of local content or local products to push this agenda. The rate at which importers thirst for foreign exchange now, which has become a drain on the economy has shown that we cannot continue that way. Nigeria is where the solution to our recession lies.
The Federal Government should lead the crusade to change the mentality of Nigerians that we have to look inwards now. We are the country with the largest population in Africa, and therefore the biggest market. For example, look at a foreign company like the MTN, for example. It came here, took over the telecommunications market, made a success of it, boosted their profile, and they became bigger than their rivals, like Vodacom Group, Telkom, Cell C et c, in their home country, South Africa. A deeply and well-thought-out campaign, like that can change our orientation as a nation and discourage our large appetite for imported goods, which continued to distort monetary policies.
Those countries (like India, China and others) that we run to get all these imported products applied the same principles to build their economy.
If the Federal Government is really serious about the diversification of the economy, one vital approach would be to revive local industries. This is also another sure way of exiting recession.
According to the Manufacturers Association of Nigeria (MAN), at least 222 small-scale businesses have closed shops, leading to 180,000 job losses in the last one year alone as a result of Nigerians’ apathy to local products.
The result is that almost all the major businesses done locally from oil and gas to road construction, engineering, security, real estate, aviation, hospitality, among others are barely managing to survive as they can hardly compete with their foreign counterparts whether here or abroad because of little or no patronage from Nigerians.
Our over-reliance on crude oil as the primary export commodity and foreign exchange earner has worsened our situation.
The CBN said it has pumped about N1.36 trillion into the real sector. The facility, he said, would support large enterprises for start-ups and expansion of the financing needs of N500 million up to a maximum of N10 billion. The facility is also expected to improve access to finance by small and medium enterprises (SMEs) to fast track the development of the manufacturing, agricultural value chain and services sub-sectors. Well, the question is: how many have had access to this and many funds. Your guess is as good as mine. Government should move beyond mere rhetoric and slogans into real action.
This is the secret behind the rising profiles of the now prosperous Asian Tigers. Our ability to achieve similar feat will depend on President Buhari’s capacity to harness human and material resources towards the promotion of made-in-Nigeria goods that can compete in both local and international markets.
What is the constraint in achieving ‘Made in Nigeria’ products?
Every facet of the society with its attendant institution has contributed to the production of poor quality graduates from our universities. It is easy to trace the entire causative factors to graft. It has eaten deep into the fabrics of the Nigerian society. The problem we see today in our educational sector, particularly the university system, is due to corruption. The university lecturers are altogether deep in greedy pursuit of vanity of material possession. They subvert the system, which they were called to guarantee, and use it in pursuit of immoral, illicit and contradictory personal goals, which are in conflict with the ideals and fundamental values of the tertiary education.
No wonder graduates now come out and when you interview them for work, they are more interested in fat or high remuneration, rather that the joy in getting engaged in the vocation for which they were trained for years. The youths of nowadays are not ready to start bottom to up. They want to begin on the high. They are not imbued with reward for honesty and hard work. Therefore, many business concerns want to keep their existing workers, train and retrain them because there are no better or fresh quality ‘outside there.’ I don’t quite know whether the responsibility of re-orientating the teeming unemployed youths is that of government or the society at large. It is such a huge task for us all.Most of the highways across the country have gradually metamorphosed into death traps.
The countless potholes that dot the roads are the architects of countless accidents. This has posed great challenges to manufacturing companies that need to ferry their products to their various wholesale and retail customers. We are now faced with regular breakdowns and quick dilapidation of our vehicles. Another challenge is insecurity as our salesmen almost in every zones of the country are attacked at will either by bandits, militants, robbers or herdsmen. The twin factors of insecurity and the bad road infrastructure are big problems for a business concern like ours.
Tackling funding constraints
The relationship between the financial system and real sector development remains very critical for any economy to realise its potential. No economy can grow and improve the living standards of its population in the absence of credit to the real sector. That is why the real sector depends on the flow of funds from the banking system.
The foreign exchange (forex) crisis has made us realise that we (at Sona Group) have been proactive to look inwards for solutions to our raw material supply chain. Our business plan from the beginning was therefore to run the in a manner that we would need to get our raw materials from Nigeria. As we speak, 90 per cent of our raw materials are from this country. However, there are still some difficulties in getting forex for the remaining 10 per cent of our raw materials. The same obtains for many other companies too, who are groaning under the same difficulties of getting forex to import their raw materials abroad. This is where government intervention becomes necessary. Government can make the companies it grants concession over forex to account for it, so as to prevent them from engaging in sharp practices like round tripping
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