For industry operators and stakeholders, one sure way to grow the economy, create jobs and boost the manufacturing sector’s contribution to government revenue is to ensure strict compliance with Executive Orders 003 and 005, which seek to grow domestic production through patronage of locally produced goods and services. Sadly, however, the implementation of the executive orders is being observed in the breach by government and its agencies. This has prompted renewed agitation by real sector operators. They are now calling for more punitive measures to force compliance in order to boost the economy’s competitiveness in the emerging continental market, Assistant Editor CHIKODI OKEREOCHA reports
If anything will add fillip to the persistent push by real sector operators, particularly manufacturers, for increased competitiveness in local and global market, it will most likely be a drastic cut down on Nigerians’ insatiable appetite for imported goods and services at the detriment of locally produced ones.
This is so because the consensus of industry operators and stakeholders including development experts is that greater patronage of made-in-Nigeria products and services is the tonic to boosting the industrial sector’s competitiveness, resulting in increased revenue to government through taxes, job creation and reduction in capital flight, among other obvious benefits.
The connection between increased patronage of local products and services and boosting the performance of Nigerian manufacturing companies and other businesses for increased contribution to national output and increased employment opportunities was obviously not lost on the government.
Accordingly, the Federal Government, via Executive Order 003, mandated all government establishments to make Nigerian manufactured goods first choice in public procurement processes. The Order, which was issued on May 18, 2017, was signed by Vice President, Prof. Yemi Osinbajo, then acting president, to promote patronage of local products.
The Order compelled Ministries, Departments and Agencies (MDAs) to channel at least 40 per cent of their procurement to locally-made goods and services. “All Ministries, Departments and Agencies (MDAs) of the Federal Government of Nigeria (FGN) shall grant preference to local manufacturers of goods and service providers in their procurement of goods and services,” it said.
It added: “Any document issued by any MDA for the solicitation of offers, bids, proposals or quotations for the supply or provision of goods and services (Solicitation Document), in accordance with (1) above, shall expressly indicate the preference to be granted to domestic manufacturers, contractors and service providers and the information required to establish the eligibility of a bid for such preference.”
The Executive Order 003 also said “All Solicitation Documents shall require bidders or potential manufacturers, suppliers, contractors and consultants to provide a verifiable statement on the local content of the goods or services to be provided. Made-in-Nigeria products shall be given preference in the procurement of the following items and at least 40 per cent of the procurement expenditure on these items in all MDAs of the Federal Government of Nigeria (FGN) shall be locally manufactured goods or local service providers.”
The items included uniforms and footwear; food and beverages; furniture & fittings; stationery; motor vehicles; pharmaceuticals; construction materials; and Information and Communication Technology (ICT).
The policy also stipulated that within 90 days of the date of this Order, the heads of all MDAs shall assess the monitoring, enforcement, implementation, and compliance with this Executive Order and local content stipulations in the Public Procurement Act or any other relevant Act within their agencies.
Heads of MDAs are also to propose policies to ensure that the Federal Government’s procurement of goods and services maximises the use of goods manufactured in Nigeria and services provided by Nigerian citizens doing business as sole proprietors, firms, or companies held wholly by them or in the majority.
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Still determined to push immense possibilities into the hands of local operators, this time, those in the Information and Communications Technology (ICT) space, President Muhammadu Buhari also signed the Executive Order 005 (“EO5”) on Friday, February 2, 2018.
The Order directed MDAs of government to engage indigenous professionals in the planning, design and execution of national security projects and maximise in-country capacity in all contracts and transactions with science, engineering and technology components.
The thrust of the EO5 was the recognition of the vital role of science, technology and innovation in national economic development, particularly in the area of promoting Made in Nigeria Goods and Services (“MNGS”).
Strategically, its main objectives were the harnessing of domestic talents and the development of indigenous capacity in science and engineering for the promotion of technological innovation needed to drive national competitiveness, productivity and economic activities which will invariably enhance the achievement of the nation’s development goals across all sectors of the economy.
The two executive orders set the stage for what promised to significantly boost the nation’s industrial sector’s competitiveness. And this was why the policy intervention enjoyed the overwhelming support of manufacturers and other members of the Organised Private Sector (OPS).
For one, it resonated with their age-long advocacy targeted at ensuring that the buy Nigeria policy was enshrined in the procurement policy and processes of both the Federal and State Governments.
The policy also reinforced real sector operators’ consistent argument that government remained the largest single spender in the economy and could drive industrial development and economic growth by increasing its patronage of locally made products. Besides, the push for increased patronage by government at all levels was seen by not a few manufacturers as being in consideration of the prevailing high cost operating environment in Nigeria and the need to keep local manufacturing companies in production, including the need to retain jobs and create new ones.
However, several years down the line, the envisaged benefits of the two executive orders are yet to manifest. Shoddy implementation and lack of political will to force compliance by government agencies have continued to mar the policy, much to the chagrin of local operators.
The patronage of Nigerian manufactured products has failed to improve on the back of the implementation of the executive orders especially Executive Order 003, as government agencies still maintain penchant for foreign products even when local substitutes of similar quality are readily available.
Already, the enthusiasm that greeted the issuance of the executive orders has now been replaced by anger and frustration by manufacturers. This is hardly unexpected considering that manufacturers have over the years been contending with bloated inventory of unsold goods said to have been partly caused by the poor patronage of locally produced goods by Nigerians, especially government agencies, and of course, the weak purchasing power of consumers.
The President of Dangote Group, Alhaji Aliko Dangote, personified the anger of real sector operators especially manufacturers aver the lax enforcement of the executive orders to encourage the patronage of local produced goods when he recently called on the National Assembly to pass a law that would penalise the sale of banned textile materials by imprisoning culprits without any option of fine.
Dangote made the call in Lagos, recently, when he presented a paper titled, “Agenda Setting for Industrializing Nigeria in the Next Decade,” at the Second Adeola Odutola Lecture in commemoration of the 50th Annual General Meeting (AGM) of the Manufacturers Association of Nigeria (MAN).
The visibly angry industrialist, who launched a personal crusade against foreign textile dealers in Nigeria, said unauthorized foreign textile traders should be jailed, insisting that such practices are not tolerated elsewhere and as such should not be tolerated in Nigeria.
While noting that unbridled importation harms the economy, Dangote called on the Federal Government to be more hard-handed with foreigners who trade textile materials in Nigeria.
“For the textile industry, I think the government needs to formulate a law by the National Assembly that will say that anybody selling banned foreign textile must go to prison without an option of fine, even if it is just for two years,” he said.
According to Dangote, who is Africa’s richest man, “The real problem in the textile industry is not basically lack of cheaper power. If you give them cheaper power but allow the smuggling to continue, the textile will not last. What is happening is that foreign companies are using us (Nigeria) as a dumping ground. That is why I do not like to import. Anytime you import, you will be importing poverty and exporting prosperity and job opportunities outside.”
The renowned industrialist said government should apply the same force it mustered to enforce the ban on rice importation in the bid to end smuggling of textiles into Nigeria, adding that, “few decades ago, textiles used to be the largest employer of labour after the Federal Government of Nigeria.”
He also tasked the Federal Government on the conscientious implementation of its policies meant to protect the country’s industrial sector, especially textile manufacturing, without caring who would be offended.
The immediate past President of MAN, Engr. Mansur Ahmed, re-enforced the argument further when he said that for the economy to grow, create jobs and increase contribution to government revenue, the manufacturing sector must be supported to scale production through increased capacity utilisation and adequate patronage.
He, therefore, called on the Federal Government through the Presidential Committee on the Monitoring of the Implementation of Executive Order 005, which seeks to grow domestic production through the patronage of locally produced goods, to rise to the occasion and ensure strict compliance with the order.
Mansur, while noting that the Executive Orders 003 and 005 exemplified the Federal Government’s commitment to grow domestic production through the patronage of locally produced goods, said MDAs that fail to comply with the Executive Orders should be sanctioned.
“It is in this regard that the Presidential Committee on the Monitoring of the Implementation of Executive Order 005 chaired by the President and anchored by the Federal Ministry of Science and Technology should be mandated to ensure strict compliance with the order,” Mansur stated.
The former MAN president, who noted that President Muhamadu Buhari has consistently maintained that Nigerians should consume what they produce and produce what they consume, said the made in Nigeria exhibition organized by MAN in the past four years was, therefore, a demonstration of the Nigerian manufacturing sector’s capacity to produce what they consume.
He, however, said what is left is for government and Nigerians to consume what manufacturers produce. He also assured that manufacturers, on their part, will rise to the occasion and ensure that they build on the existing capacities and continue to improve on the quality and competitiveness of locally produced goods.
Mansur urged members of MAN to take advantage of the opportunities created by the policies of the current administration and the emerging continental market to expand their investments, improve their manufacturing operations and the standard of their products. “This will guarantee our competitiveness and market penetration in Africa and beyond,” he emphasized.