The protectionist policy for local firms

THE recent policy of the Federal Government to enrich two aspects of the manufacturing sector, though belated judging by the canons of national planning, is commendable. Notwithstanding the case that, at face value, it is a step in the right direction, these policies could, however, be improved upon for proper integration into other aspects of Nigeria’s national life. 

    President Goodluck Jonathan, while commissioning the EMV Certified Smart card manufacturing plant of SecureID Limited in Lagos, unveiled a protectionist policy for local firms, whereby the government planned to continually review tariffs and waivers to encourage local content development and improve capacity utilization of manufacturing companies in the country. At about the same time, the Minister of Industry, Trade and Investment, Olusegun Aganga, was said to have disclosed government’s approval of a new funding mechanism that would ensure cotton, textile and garment (CTG) companies have access to long-term, low interest loans to finance their operations. The government further encouraged military, paramilitary and government institutions to patronise Nigeria-made fabrics.

   Whatever the intention of the government at this time, these policies, especially the latter, are worthy of encouragement for their propensity to build local capacity, revamp comatose manufacturing industries, improve local patronage and grow the economy. They are a fitting reminder of the long-eroding values of nationalism and patriotism. For too long, Nigerian manufacturers have witnessed how indiscriminate granting of import tariffs and waivers has privileged imported goods, some of them sub-standard, to the disadvantage and destruction of local manufacturing initiatives. In this age of sharp competitiveness in the global economy, any review of import tariffs and waivers that would encourage local content development should be embraced, in the same manner as the approval of low interest funding plan for CTG companies. 

    But as salutary as the policies seem, they are devoid of link to any form of development plan. In the 1970s and 1980s, the policy of government was anchored on the development plans, until the military came to replace them with rolling plans. In recent times, governments have saddled themselves with slogans rather than well thought-out development plans. Nigeria has an expected level it desires to attain but has there been any process deliberately followed and actions taken to drive our economic outcomes to that level? Are other sub-sectors tied to a sector fitted in the national plan? Or is it the case that a sub-sector is isolated as a national agenda? 

   There must be a target for the country at any point in time. That is the reason for national planning. Government’s policies must be interpreted into other sectors – education, cultural orientation, information, etc. There must be capacity building in every part, and the same could be done for the CTG companies. The real sector, which is the bedrock of industrialisation of any country, has totally collapsed because of lack of raw materials support. Obnoxious policies and prebendal privileges fostered by corruption have turned statutory and essential government activities into strenuous tasks, as the nation wallows as a typically consumerist economy. 

   It would be recalled that before the years of the locusts in this country, the job-creation potential of the CTG companies was legendary. If the intention of the government is to harness this job-creation potential, it must evolve a holistic approach that gives primacy to agriculture. To return to that glorious period of orientation towards industrialisation, the prioritisation of the CTG companies should include the overhauling of the agricultural sector. Many countries are far ahead of Nigeria because of their integration of their agriculture to their needs. 

   What this means is that, in lauding these revamping policies, the government is being reminded of policies that should have kicked off decades earlier, or better still that should have been driven by a national development plan. 

   Policies must go beyond the sprinkling of largesse in the name of low interest loans, with its attendant bottlenecks. For the manufacturing sector to make economic sense to the nation, the government must operate a national plan that is built on an enlarged vision of development. It must set up the enabling infrastructure and amenities that can sustain whatever industry it has been able to set up. It is of no use setting up an industry that would depend on the contractor mentality of power generation through the purchase or leasing of generators rather than constructing power stations.

   There must be a clear vision both at the microscopic level of everyday living and at the level of futuristic plans; or else the country cannot meet up in the global industrialisation race. Reviews of import tariffs and waivers and the approval of low interest funding are good, yet not enough. These steps have not targeted the problem in the sector; it is rather a relief; an ad hoc measure that is merely reactionary. Nigeria needs a pro-active, national development agenda for the manufacturing sector; one that integrates other sectors and percolates other areas of national life.