Category: Industry

DOES the Federal Government have the political will to enforce its decision to increase tariff on imported wheat flour?

Some stakeholders are not convinced that the government has the will to execute the policy because it may be detriental to the people’s well-being. To them, the 40 per cent cassava flour input is too high.

When former President Olusegun Obasanjo approved 10 per cent cassava flour inclusion in bread baking, many who took the cassava bread then confessed that it was not delicious.

Later, bakers sought a reduction in the cassava content of the bread. The government yielded to their request, slashed the percentage by half and eventually threw out the policy.

According to the Executive Vice-Chairman, Honeywell Flour Mills Plc, Mr Babatunde Odunayo, despite the goverment’s good intention to use cassava to boost rural development and urban decongestion, its unavailability and lack of technology by local millers to process the volume required could frustrate the effort.

He described the situation as a challenge to flour makers, despite their willingness to use cassava.

Odunayo argued that manufacturers might not have any choice at the end but to maximise the profit with the new import duty, which he said could lead to increased prices in other things, especially bread and wheat.

“Wheat is a major raw material in the production of our products. It actually accounts for over 90 per cent of the total raw material input and it is wholly imported. The price of wheat is influenced by so many factors most of which are beyond us as local users. For example, the Federal Government recently announced an introduction of a 15 per cent levy, in addition to the five per cent import duty for wheat. This necessarily means an increase in the production cost of flour and other wheat based products from millers,” he said.

An economist, Ismail Quadri, said because some of Nigeria’s policies in the past were unplanned and poorly researched, they did not work.

He said: “There is nothing bad in cassava components but the fact remains that necessary research and consultation among stakeholders have not been done and this is dangerous to the market.

“To me, this is another bandage approach that will later expose the wound and create hardship for the masses, who either earn their living or consume the wheat based on products because as it is, it is obvious that price of these commodities would be jacked up”.

Again, despite government’s insistence that the primary goal of the new cassava policy is to cut wheat imports by 40 per cent by 2015 to conserve foreign exchange earnings and increase employment, there are insinuations that its estimation that wheat imports worth N635 billion (about $4.2billion) in 2011 were overstated to demonstrate that wheat imports hurt Nigeria’s foreign exchange earnings and worsen the rate of unemployment.

He said these figures, even if they include cost, freight, insurance and duty, were high, adding that over $1.8 billion is spent on wheat imports annually using the same cost, freight, insurance and duty schedule.

The Lagos State Chairman of the Association of Master Bakers and Confectioneries, Jacob Adejorin, confirmed that the price of bread had increased since September 1, following the increment of price of flour and other ingredients by N1, 000.

He said: “Members of our association have no option but to increase the price of bread because of the N1, 000 addition on the price of flour.”

An industrial expert in Lagos, Dr Ado Ahmed, said: ‘‘The government should review the policy of increasing tariff on wheat and flour because it is a vital policy thrust that could be detrimental to the well-being of the common man on the street because Nigerians eat a loaf of bread depending on the price and size. When the prices of bread and other allied foods skyrockets, it will deny Nigerians the meal they like best; therefore, may lead to protest that will endanger the peace of the country by the importers and master bakers.’’

He said the government should not be in a hurry to go ahead with the proposed increase of wheat and flour tariff.

“The announcement alone may cause panic importation that may be used to increase the prices of bread, biscuits, spaghetti, noodles and others,” he said.

A consumer, Cynthia Abaribe, who feared that the increase on import duty would affect noodles and other products, said the policy would only make life more difficult for the average Nigerian.

“As a student, noodles and bread are my last result whenever I think of taking a quick food that would be affordable, when the sons and daughters of the rich might settled for fast food joints. Now that the prices of these commodities are set to go up, what is the hope? I think the government needs to consider the masses and have a rethink,” she said.

For a long time, bakers have been on the edge over rising costs of ingredients needed for the production of bread and other confectioneries. As a result, many small scale bakers have been compelled to abandon baking.

Although industrial researchers believe that the inclusion of five per cent cassava flour in wheat flour could lead to a drop in the cost of baking flour, not all flour millers have heeded the government’s policy. Hence its impact on the price of flour is not yet felt by bakers.

The Manufacturers Association of Nigeria (MAN), Ogun State chapter, has said excessive charges are hindering its members’ businesses.

According to MAN these as multiple taxes, levies and other charges by various tiers of government are excruciating.

Speaking at its 27th Annual General Meeting, its Chairman, Dr Dapo Oguntuga, said the continuous introduction of taxes and levies by various organs of government, and the mode of their collection were not proper.

“ Their actions pose great challenges to business planning, execution and projections. For instance, the state government recently revised Deed of Lease of Agreement from 10 to five years, while at the same time revising the land charges from N62,000 to N242,000 per annum,” Oguntuga said.

Others are poor infrastructure, especially road network, water supply and electricity in industrial estates.

He said the government should prevail on its officials to stop the molestation of company vehicles’ drivers conveying raw materials and finished products, most of which are unauthorised, as well as various organs of government personnel who visit factories at various times demanding similar payments and gratifications, saying all these are affecting manufacturers’ operation in the state.

Oguntuga assured that manufacturers would continue to play their role in developing the state.

His words: ”Manufactures will do everything possible to support the vision of the state government. Despite the harsh economic climate, manufacturing activities are on the increase with the branch recording appreciable growth in membership.

“ Among the major factors that have stunted the growth of the manufacturing sector is the dearth of long-term funding for manufacturing industries”.

The National President, Mr Kola Jamodu, said successive governments acknowledge the existence of the funding challenge facing the sector, especially the high cost of funds and consistently tried to address this challenge through various policy initiatives.

He said the inadequacy of funds at the disposal of some financial institutions, dearth of basic infrastructure, harsh business environment, changes in the structure and economic fortunes of the nation, as well as policy inconsistency, have frustrated governments’ efforts at effectively meeting the funding needs of the manufacturing sector.

The National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has advised the Federal Government to channel about 50 per cent of excess crude oil sale to the Sovereign Wealth Fund (SWF).

The President of the association, Mr Herbert Ajayi, made the call in Lagos .

He advocated that excess crude oil sales revenue be lodged in the Excess Crude Account (ECA). He welcomed the introduction of Medium Term Expenditure Framework-MTEF (2013-2015), Performance Agreement Contracts signed by President Jonathan with ministers as well as the gender empowerment as worthy innovations, which could be replicated by other tiers of governments and all their agencies with modification where necessary.

“These innovations could bring both the public and private sectors together on the same page.

“On gender empowerment, we counsel that the pilot programme should prioritise education and enlightenment, as well as access to entrepreneurship finance for women,” the association said.

NACCIMA lamented that the cost of providing physical infrastructure has become prohibitive for the government to bear. He advised that concessioning or privatising the infrastructure was advisable.

This, the association said, would replace the “do-it-alone syndrome” by the government, stressing that each tier of government should consider embracing Public-Private Partnership (PPP),which has been successfully done on some heavy projects.

The chamber while commending the presentation of budget 2013, urged that the machinery at government’s disposal are used to ensure high level performance of the 2013 budget.

The chamber noted that that despite the government’s zero-tolerance for bribery and corruption and the activities of the anti-corruption agencies, not much appears to have changed as indiscipline, bribery and corruption have continued to thrive.

NACCIMA argued that the government needs to review and devise new strategies to tackle this dilemma, which it feared could affect the performance of the budget and service delivery in 2013.

NIGERIA accounts for about 30 per cent of sub-Sahara African (SSA) countries exports.

The international financial advisory firm, Renaissance Capital (Rencap), which made this known, said the volume of Nigeria’s exports makes it vulnerable to the global economic downturn.

Rencap, in its report entitled: Sub-Saharan Africa: Export patterns: How trade dependencies have changed, said Nigeria is SSA’s biggest exporter.

According to the reports, “Almost 30 per cent of SSA’s exports outside the region originate in Nigeria, and three countries – Nigeria, SA and Angola – dominate extra-regional exports, accounting for 70 per cent of the total, implying that SSA’s exposure to a global downturn through trade is concentrated in these three countries. We believe the impact on Nigeria and Angola is mitigated by their limited exposure to the EU”.

Nigeria is said to have exported non-oil products worth over $1.40 billion this year. The figure represents about 11 per cent decline from the over $1.43 billion recorded over the same period last year.

Value of exported goods for January was put at $161.6 million compared to $307.2 million realised a year ago.

The Executive Director, Nigerian Export Promotion Council (NEPC), David Adulugba, had put the value of non-oil exports for the first and second quarters of the year at $660.1million and $686.2 million as against $818.8 million and $676.2 million recorded in the same period in 2011.

According to him, Nigeria exported non-oil products worth $242.9 million in February, this year compared to $273.6 million recorded in the same period last year, adding that Nigeria exported non-oil products worth $255.7 million and $220.6 million in March and April, this year, as against $237.9 million and $250.6 million recorded for 2011.

Meanwhile, the nation’s growth was said to have softened in 2012 to less than seven per cent on the back of a slowdown in the non-oil sector’s activity, particularly Agriculture and wholesale and retail trade, owing to insecurity in North.

Rencap explained that floods have also threatened to further undermine growth in 2012. “We project growth of 6.3 per cent in 2012, down from 7.4 per cent in 2011.

Floods also increased the risks associated with inflation, such that it might return to the low double digits and the policy rate likely to remain flat at 12 per cent in the short term.

Rencap maintained that SSA economies that trade with the United States, which is facing the challenges in its fiscal policy, may experience slower demand in 2013, whereas the region experiencing the worst downturn – the EU (such as Southern Africa) – and/or have high export/GDP ratios (such as the Republic of Congo), are most exposed to the slowdown in global growth we expect in 2012 and 2013

INDUSTRIALISTS have picked holes in the monetary policy of the Central Bank of Nigeria (CBN), condemning what they call the decline in aggregate credit to the economy, especially the private sector.

Aggregate credit is the amount of loan available or given to industries.

In a report made available to The Nation, the CBN said the aggregate net credit by banks to the domestic economy fell by 0.1 per cent and 2.7 per cent in the first and second quarters of the year.

In a statement, Director-General of Lagos Chamber of Commerceand Industry (LCCI), Muda Yusuf, attributed the decline to CBN’s sustained monetary tightening, significant rise in government’s domestic borrowing and attractive yield of government’s bonds and treasury bills.

It said the tight monetary policy is keeping funds out of the reach of the private sector, adding that with the planned issuance of Treasury Bills to absorb all maturing instruments in the fourth quarter, liquidity is expected to remain tighter with the private sector at the receiving end.

“Over the last nine months, we have seen a steady decline in discretionary spending by households and firms, weaker uptake from suppliers and distributors and softer operating performance among consumer goods companies.

“While we hope that our concerns do not degenerate before the next MPC meeting scheduled to hold in November, it is important for the monetary authority to commence an adjustment of monetary policy course, towards boosting private sector credit, domestic demand, employment and growth,” Muda said.

He said contrary to industrialists’ yearnings for a relaxed monetary regime, the MPC kept all the key monetary policy variables unchanged at its last meeting in September.

He said the committee affirmed that its decision at its meeting in July, had the desired effects on inflation, stability of short-term interest rates, build-up of the external reserves and the stability of the exchange rate.

“MPC held MPR unchanged at 12 per cent, sustained the symmetric corridor at 200 basis points, retain Cash Reserve Ratio (CRR) at 12 per cent and minimum liquidity ratio is retained at 30 per cent. Since July 2010, the MPC has adjusted the MPR by 100 per cent, from six per cent to 12 per cent currently,” Muda said.

Advertising Practitioners Council of Nigeria(APCON) has threatened to withdraw the certificates of unregistered practitioners to stem quackery.

Speaking at the inauguration of new members in Lagos, APCON Chairman Mr Lolu Akinwunmi said most advertising agencies had been operating illegally, adding that it is a criminal offence to practice without registration by APCON.

He said there was need to bring all stakeholders together so that the industry could come up with a workable and strategic road map.

The body, he said, would continue to review the practice and regulation of outdoor advertising in order to identify grey areas.

On integrity, Akinwunmi said APCON wants to be seen as fair.

“APCON encourages quality and versatile of information because with every approval given by the Advertising Standards Panel (ASP), APCON must be able to substantiate it,” he said.

He urges the new members to ensure that all adverts abide by the code of advertising practice.

New members committee include ADPC Chairman Mr Funmi Onabolu, APIP Chairman, Mr Gabriel Abah, Practitioners Devepment and Training Chairman, Mr jimi Awosika.

Delta State Government has been asked to improve the business environment, tackle unemployment and enhance industrialisation.

To realise this, the government is expected to work with the Organised Private Sector (OPS) and other professionals to set up microfinance banks to close the financing gaps that hinder enterprise development.

This is contained in a communiqué issued at the end of a symposium organised by Delta North Think Tank, in Asaba, the state capital.

The communiqué, signed by the Chairman/Vice-Chairperson, Executive Committee, Delta North Think Tank (DeNoTT), Prof Eric Eboh and Prof Josephine Alumanah, said there was need to improve entrepreneurship training and technical assistance to enterprises and disseminate simple and affordable enterprise models, involving youth groups as training avenues for their members.

The group urged the government to consider setting up microfinance banks to close the financing gaps that hinder enterprise development. The group called for stock taking of oil and gas resources and potentials in Delta North to guide and facilitate exploitation.

DeNoTT noted that relevant agencies of government at the federal and state levels should be engaged to undertake comprehensive inventory and update of the assessments of the oil and gas resources in the constituent communities and local communities should co-operate assist to make these inventories successful.

It said: “Delta North communities have relative comparative advantages in many agricultural commodities/enterprises including arable crops (cassava, yam), tree crops (rubber, oil palm), and vegetable crops (tomato, pineapple), livestock (goat), aquaculture and fish farming, among others. But, these commodities are poorly developed and currently underperforming in terms of productivity, profitability and competitiveness.”

“The agricultural post-harvest subsector, particularly processing, storage, distribution and marketing are very weak, thereby subduing the agricultural commodity value chains. As a result, the full benefits of value addition to raw agricultural produce are not realised by the farmers, agribusiness operators and local communities.

“The development orientation should shift away from driving agriculture from the production (supply) side, to triggering change from the processing, market and industry sides. Using the market-side approaches to accelerate agricultural production is the key to unleashing the value chains and ensuring sustainable increases in production efficiency and farm output.”

On how to develop commodity processing corridors (CPCs) in the zone, the group charged the community (town) unions, cooperative societies and farmer groups to identify possible processing and marketing hubs and engage local government and state government authorities for partnering.

MINISTER of Agriculture Dr Akinwumi Adesina has unveiled plans by the Federal Government to double cocoa production from 250,000metric tonnes by 2015.

Adesina, who delivered a keynote address in Ibadan at the 1st International Cocoa Conference, said 3.6 million hybrid cocoa pods would be distributed free to cocoa farmers to meet the target.

The minister, represented by Dr Talabi Odeyemi, a director in the ministry, said this would lead to the cultivation of 114,000 hectares of cocoa.

Adesina said it was gladdening that the new hybrid cocoa pods were developed by researchers for local farmers.

He, however, called on the private sector to partner with the government in exploring the opportunities in cocoa production.

Adesina called for intensification of efforts toward adding value to cocoa for the country to be a global player in international arena.

In his welcome address, the President, Cocoa Association of Nigeria (CAN), Mr Sayina Riman, announced plans to create a data base for the industry and farmers.

Riman said CAN’s vision was to initiate a robust “bean-to-bar database of the cocoa economy.’’

“In a networked and global economy, where traceability has become a major determinant for service delivery provision, policy making and customer experience, we cannot and must not continue to operate in the dark.

“It is, indeed, an embarrassment that we have different accounts or sources of the cocoa output in Nigeria; embarrassing the even more that we do not know for sure how many producers are actively involved in production, indeed, how many are sharecroppers, lien croppers, tenants etc and indeed how many farmlands are under active cultivation and by what farmer,“ he said.

The Federal Institute of Industrial Research (FIIRO), Oshodi, Lagos, has called on industries manufacturing fortification for sugar, salt, flour and vegetable oil to consider their food processing methods to avoid losing Vitamin A nutrients during production.

FIIRO’s Director-General/Chief Executive Officer, Dr. Gloria Elemo, gave this advice at a lecture entitled: Consumer acceptance of foods containing carotenoids, in Lagos.

She said despite Vitamin A fortification of some products, the country is still regarded as Vitamin A deficient, adding that the status of the mineral should be monitored to know where things went wrong.

She added that it was high time people changed their attitude towards some foods and drinks and endeavoured to accept and consume functional foods developed for their health benefits, such as foods that contain carotenoids.

She said: “We need to also go back to our vanishing foods because we have virtually lost most of our core foods. These foods are nutraceutical that is they are both nutritional and medicinal duplication. We should recall them back and do more work. This will build new product development and upgrade indigenous technology that has been used previously and to set up consumer acceptance and sensory properties to get people into buying the goods”.

The Chairman of the occasion, who is also the Head of Department, Biochemistry, University of Lagos, Prof. Albert Ebuehi, said one of the biggest challenges in creating a new food product is predicting how it would be accepted by consumers, adding that price and packaging are factors that determine acceptance.

He said some consumers should accept foods that contain carotenoids despite their tastes since their health benefits are important to the body.