The Nation Newspaper

Category: Industry

  • MAN disputes NACCIMA’s claim on 800 shut firms

    MAN disputes NACCIMA’s claim on 800 shut firms

    ‘Real sector’s contribution to GDP about 4%’

    Did 800 companies close shop in the country between 2009 and last year?

    This puzzle remains unravelled as the Manufacturers Association of Nigeria (MAN) and the Nigerian Association of Chambers of Commerce , Industry, Mines and Agriculture (NACCIMA) are expressing divergent views on the issue.

    At a zonal workshop on economic diversification organised by the Revenue Mobilisation Allocation and Fiscal Commission(RMAFC) in Asaba, Delta State,on September 11, NACCIMA President, Dr Ademola Ajayi said the companies closed shop because of the harsh operating business environment .

    Ajayi said more than half of the surviving firms had been classified as ailing , thereby posing danger to the survival of the manufacturing industry.

    He blamed the continued decline in the manufacturing sector on political and economic factors, citing poor infrastructure and epileptic power supply as impediment to the industry.

    “The manufacturing industry as a whole operates on more than 70 per cent of energy it generates; using generators and operating these generators greatly increases the cost of manufacturing goods,” he said.

    Other problems in the sector , he said, include incessant increase in the price of petroleum products , multiple taxation , smuggling and inadequate access to finance, both local and abroad.

    But MAN President Mr Kola Jamodu said the association was not aware of the closure of the firms.

    Explaining at the presentation of the blueprint for “The accelerated development of manufacturing in Nigeria”, in Lagos, Jamodu said while the business environment could be said to be harsh, the government is supporting the manufacturing sector through reforms including intervention funds.

    According to him, government is committed to good governance and sustainability of the current reforms, which have improved the sector.

    Jamodu said manufacturing contributes a paltry four per cent to the Gross Domestic Product (GDP), adding that in other developed countries the sector’s contribution to the GDP averages 46 per cent.

    Transforming the sector to a dynamic and virile , he said, is part of the strategy of Vision 20:2020, which envisages long-term intensification of the industrialisation process and movement towards a knowledge- driven economy.

    According to MAN’s projection, the sector’s contribution to GDP can leap-frog to between 15 and18 per cent in three years if the recommendations in its blueprint are considered and implemented. The blueprint is based on an integrated approach that addresses sector-specific issues and recognises the important role of manufacturing, particularly Small and Medium Enterprises (SMEs) in employment generation.

    He said: “The articulation of this blueprint is to provide government with proposals on policies that, if implemented, could help to position the manufacturing sector for greater performance and fast-track the realisation of the national vision of becoming one of the top 20 economies by 2020.”

    Jamodu said the sector still faced a number of challenges which had whittled down its productive capacity and hampered its job creation potential.

    Jamodu said although some critical aspects of the agenda had been adopted, the public presentation of the report was aimed at ensuring that the trend of positive activism is sustained in the implementation of all measures needed to restore manufacturing to its rightful position.

    He said actions that would enhance the productive capacity and capacity utilisation of the various sub-sectors of manufacturing needed to be taken to ensure that the sector played its role of job creation, poverty reduction and economic development.

    He said: “The current administration in the country is working on some of the addressed problems. We are all concerned about the fortune of manufacturing because it is the only sector, whose prospect can determine the fortunes of the people and the economy. A healthy manufacturing sector means more jobs for the people, and less poverty in the land.”

    A research economist with MAN, Mr Toyin Durowaye, in a presentation, said the imperative of a research-based analysis of the problems of the sector could not be overemphasised in view of the sector’s importance.

    He said manufacturing, as a critical sector, needed deserved attention because of its central role in economic repositioning.

    “The only way to solve problems in a sustainable way is to encourage manufacturing to thrive. Manufacturing is the only sector that has the capacity to generate the most jobs and ensure economic turnaround,” he said.

  • India to spend $46b on trade to Nigeria, others

    India to spend $46b on trade to Nigeria, others

    About 20 Indian information technology (IT) firms are due in the country to deliberate on further areas of investment at the Information Technology Association of Nigeria (ITAN) summit.

    The development is expected to push bilateral trade between the nations and other African countries to over $46 billion.

    According to the President , ITAN, Mrs Florence Seriki, the objective of the yearly event, which also serves as a statement of need, is to sustain the creation of a platform for local ICT organisations to synergise and collaborate with key international ICT players to bridge the gaps in competitive capacity development of local enterprises.

    It would also create education opportunities, influence policy formulation and promote the Nigerian industry, she added.

    She said the meeting identifies with Federal Government’s transformational agenda for the ICT sector and the association’s stance of building international partnership to grow the industry.

    Mrs Seriki said this year’s theme is Empowering and resuscitating local IT entrepreneurs via local content development and funding.

    She said local IT entrepreneurs deserved private and public sector support in terms of increasing their demand for goods and services, and engendering adequate partnerships to promote local content.”

    Mrs Seriki said India and Nigeria enjoyed healthy diplomatic relations, noting the enhanced economic and trade relationship between the two countries. She said Indian software and several ICT companies have a very strong presence in Nigeria.

    The Minister of Communication Technology, Mrs Omobola Johnson, will be the special guest of honour, while key speakers at the forum include President, National Association of Computer and Software Companies of India (NASSCOM), India, Som Mittal and the Managing Director of the Bank of Industry (BoI), Ms Evelyn Oputu.

    Also to attend the event as special guests are the Indian High Commission in Nigeria, and the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr Ernest Nwapa.

    “The ITAN, NASCOM CEOs forum offers a strong plank for industry leaders of the two countries to explore ways of mutually growing businesses particularly as it concerns the ICT sector,” Mrs Seriki stated.

    NASSCOM is the premier trade body and the “Chamber of Commerce” for the IT – BPO industry in India and ITAN is the premier trade industry group for ICT companies in Nigeria.

  • Chamber to attract FDI at trade fair

    Chamber to attract FDI at trade fair

    The Lagos Chamber of Commerce and Industry is to complement government’s efforts at attracting foreign investment.

    The chamber has concluded arrangements for Business-to-Business (B2B) meetings between indigenous and foreign exhibitors, seeking trade opportunities and partnerships at this year’s Lagos International Trade Fair.

    According to a statement by the Director-General, Mr Muda Yusuf, this is in line with the theme of the 2012 Fair: Promoting trade for sustainable economic transformation, and renewed drive by government and interest groups to showcase and promote the economy’s potential.

    He said the chamber shifted the venue of the fair from the Lagos Trade Fair Complex this year because of ongoing construction on the Lagos-Badagry Expressway. The expansion of the road posed huge challenges to commuters and participants at the fair last year.

    “Already, feedback from registered and potential exhibitors, especially from abroad, indicates satisfaction with the shift of the fair to the Tafawa Balewa Square, which is easily accessible from most parts of Lagos. It is envisaged that this year will witness an increase in participation of exhibitors and visitors.”

    Last year witnessed participation by exhibitors from eleven countries, including Canada, Egypt, Pakistan, Indonesia, China, Taiwan, Singapore and India. Others were Ghana, Republic of Benin and Cameroun. Enquiries have also been received from the United Arab Emirates and Malaysia this year.

  • Mexico invests over N8b in Nigeria’s agro-allied industry

    MEXICO has so far invested about N8 billion in the agro –industrial sector in the economy, with prospects of creating 7,500 direct jobs in the country.

    The Mexican Ambassador to Nigeria, Marco Antonio García Blanco, made this known on the anniversary of the 202 Independence Day celebration of the Central American country, held in Abuja.

    Recalling a Memorandum of Understanding (MoU) signed between Mexico and Nigeria, the envoy disclosed that his Embassy in Nigeria has reduced requirements to issue visas to prospective travelers to his home country to just one day of the application.

    He said: “We already have the opportunity to exchange trade mission and Mexico started to invest in Nigeria $54 million (N8 billion) in the first two projects at the agro-industrial sector that will create 7,500 directs jobs in this country.

    “The Mexican Embassy is fully committed to continue to work together with the Government of Nigeria in the process of building a more active, strong and successful bilateral relationship with benefits to both nations.”

  • SON embarks on e-registration of products

    TO simplify the process of products registration, the Standards Organisation of Nigeria has introduced e-registration on its website.

    This innovation is aimed at ensuring that genuine manufacturers and dealers experience less difficulty in getting their products registered.

    According to the agency, the move is also to ensure the success of its campaign of zero tolerance for substandard products, which the agency has carried to the various sectoral groups and parts of the country since July 2011, when it was launched

    On the e-registration, the Director-General, Dr Joseph Odumodu, in a statement, said the strategy is targeted at arresting the sale and production of unwholesome and substandard products. Besides, he said, it would make registration of consumer products compulsory for manufacturers before such could be displayed on shelves.

    Explaining the import of the initiative, he said the process would involve the launch of product identification marks on products within the category under review, stressing that any product without proper identification marks would not be allowed to be sold in the country.

    He said: “This is something we believe would help the manufacturers, the dealers and SON. It is all in the bid to ensure safer products, safer Nigerians and a healthier economy.”

    Odumodu said the agency was leveraging opportunities and platforms to make its work easier for the regulator and the larger society.

    He reaffirmed the determination of the agency to reduce the prevalence of substandard products from 60 per cent to about 30 per cent in three months. He added that the new scheme would involve products already in the market, including electric bulbs, stabilisers, tyres, electric fittings, generators, building materials and toys.

    Listing the advantages of e-registration, Odumodu said: “It would assist us in developing a data base of consumer products in the country. The scheme will enhance traceability in our compliance monitoring activities that is making it easy for us to trace any product and its manufacturer anytime the need arises.”

    He said in addition, the new scheme, apart from protecting consumers would also create employment and wealth.

  • Manufacturing growth rate in Nigeria, others drop

    REPORT by the United Nations Industrial Development Organisation (UNIDO) on manufacturing production in the second quarter of 2012 shows the growth rate of output in Nigeria and other developing countries has dropped to the lowest level since the beginning of 2011.

    According to UNIDO, while the manufacturing industry in developing economies largely resisted the effects of financial volatility during the recession of 2008–2009, the ongoing second recession of the world economy since 2010 has affected industrialised and developing countries.

    UNIDO predicts that the growth of manufacturing value added (MVA) in developing countries will slow to 4.5 per cent in 2012, down from 5.4 per cent in 2011.

    The report stated that among the industrialised countries, there were positive developments in North America and East Asia.

    “The MVA of North America is expected to grow by 1.7 per cent in 2012, while East Asia’s industrial production could grow by 4.1 per cent. However there are concerns that the impact of declining MVA in Europe may spill over to these regions.

    It added that the prolonged crisis in Europe and uncertainty about growth prospects in the U.S. have negatively affected industrial production in developing countries.

    It said the decline in demand in external markets has slowed the growth of export-oriented manufacturing industries in many developing countries, and, in some of them, domestic demand, too, has dropped due to the perceived growth uncertainty at the global level.

    The UNIDO report also presents growth estimates by manufacturing sector. Due to the decline in demand in industrialised countries, production growth of consumer goods, especially wearing apparel and consumer electronics, has slowed or declined in developing countries.

  • Creating the Northern edge

    Many public officials find themselves walking a tight rope where Nigeria’s geo-politics is concerned. Geopolitical zones different from the ones they

    hail from usually accuse them of one wrong or the other in the discharge of their duties. The reason for this is not farfetched Nigeria is a country of diverse cultures, idiosyncracies, religions, political inclinations and ethnic groups. Of recent, Minister of Aviation Stella Oduah has come under the attack of such political jingoists.

    These faceless individuals like destructive locusts in season have set out to obliterate the efforts of the Minister in the North, but unknown to them the transformation is in full motion and cannot be truncated. Oduah is not oblivious of the place of the North, especially since it forms the core of the historical perspective of the aviation industry in the country, with the landing in 1925 of a Royal Air Force (RAF) aircraft and the subsequent construction of the Kano aerodrome.

    It is this profound understanding that inspired her to refurbish Hajj terminals in Kaduna and Kano states. Anyone who understands Islam knows that hajj is one of the fundamental tenets of Islam -it is Allah’s injunction for every adult Muslim, if they can afford it, to perform hajj, at least once in a lifetime. The hajj terminals are an integral part of hajj activities as this is where pilgrims stay at times before being airlifted to Mecca.

    These structures have been transformed to comfortable, standard terminals to serve much more than a waiting edifice for pilgrims. Certainly this wouldn’t have been the case if the Minister was a bigot as some people are painting her. However, the misinformation and outright selective perception pales in comparison to the recent allegations against her of preventing international airlines from landing at the Nnamdi Azikiwe Airport in Abuja.

    Her traducers added she diverted such planes to Enugu. Haba! If  these individuals were not blinded to the fact, they would have known that profit from ventures guide the airplanes and not the service they provide to geopolitical zones.

    These are guided by comprehensive commercial agreements; the Minister’s duty is to regulate their business conduct in Nigeria but not to dictate to them where or where not to fly to…this can and should only be decided by the strength of traffic that plies the location.

    On the Emirates and Etihad issue, the minister made a strong case for the decentralisation of the operations of these airlines from Lagos and in line with international practice, presented commercially convincing data showing the possible commercial benefits that the airlines can get if they start operating from Lagos, Kano and Enugu.

    The airlines were convinced to look at these suggestions and even went a step further to sign some agreements. One should not also forget the recent project embarked upon by the Nassarawa State government led by Governor Umaru Al-Makura , which is constructing an aerodrome in Lafia and a cargo airport in Karshi.

    These projects being located in the North central part of the country, will no doubt boost the economic potentials of the region and ensure that a cargo hub is established thereby decentralising the movement of goods and services.

    The Cargo airport will serve as a second runway for the Nnamdi Azikiwe International Airport, Abuja. This project enjoys the backing of Oduah, who is encouraging Nigerians irrespective of tribe or creed to invest in the aviation sector.

    This is why it is rather disheartening that a stakeholder in the aviation industry like Hon. Rufai Chanchangi, the Vice Chairman of the Aviation Committee in the House of Representatives is overlooking all these to call for the Minister’s resignation. It is glaring that the lawmaker did not do proper investigation before reaching his conclusion; for if he has done so, he will be praising the minister not condemning her.

    What is expected from people like him are words of encouragement for the minister, especially at a time like this when the bulk of airport terminals undergoing reconstruction are located in the North. As the minister struggles daily to make Nigerian skies one of the most viable and safest in sub-sahara Africa she should be supported to achieve her objective so that the North and indeed Nigeria can be better off.

    Yakubu Dati writes from Abuja

  • LCCI to CBN: relax ‘tight’ monetary policy

    Lagos Chamber of Commerce and Industry (LCCI)

    The Lagos Chamber of Commerce and Industry (LCCI) has blamed what it calls the ‘tight monetary policy’ stance of the Central Bank of Nigeria (CBN), for some of the private sector’s problems.

    The policy, LCCI said, which had been in place

    for almost one year, is taking its toll on the sector’s productivity and sustenance.In a statement by LCCI President Mr Goddie Ibru, the chamber said the interest rates of over 20 per cent were inimical to entrepreneurship development, wealth creation and employment generation.

    The chamber urged the CBN to relax the policy and risk management guidelines to improve access to credit and reduce the cost of funds.

    According to the chamber, this is more crucial than the proposed currency restructuring, which has generated much controversy but with no immediate impact on productivity and economic growth.

    On the introduction of N5000 note, he said: “LCCI is aware that different economic policy has their own costs and benefits and to optimise the benefits, it is always important to be guided by the weight of merits and demerits of any policy reform, but key benefits of the proposed currency restructuring would reduce the cost of currency management such as printing, movement, storage, counting and distribution.

    “It will enhance portability and facilitate business activities of some segments of the economy where a large amount of cash is required, especially in the informal sector. It will reduce risk/vulnerability of cash carriers as higher value of cash can now be easily moved around with less visibility.

    “It will enhance the capacity of Automated Teller Machines, ATM, machines to store more money, reduce ATM stock out time and serve bank customers better and facilitate the return of coin in circulation as some of the lower currency notes are going to be converted to coins.

    “Of course, coins are relatively durable and our history of apathy on the use of coins is largely due to value consideration not the physical properties.

    “What is paramount at this time is for the CBN to relax its current tight monetary policy and risk management guidelines in order to improve access to credit and reduce the cost of fund in the economy. It is time to focus on efforts to stimulate the economy and promote growth,” Ibru said.

    He said the introduction of higher denominations should maintain an incremental sequence of N2,000 to N5,000, in line with historical trends and international best practices, adding that the CBN needed to constantly ensure a proper alignment between the cash-less policy and its currency management strategy.

    In a related event, the chamber has moved the 2012 Lagos International Trade Fair (LITF) to Tafawa Balewa Square, (TBS), Lagos Island, from its traditional trade fair complex ground along Badagry expressway.

    Speaking with journalists , the Vice-President and Chairman, Trade Promotion Board of LCCI, Mr Babatunde Ruwase, said the change in venue was informed by the need to service exhibitors and visitors better given their experience last year.

    According to him, the two major road construction and rehabilitation projects on the Oshodi-Apapa expressway and the Lagos-Badagry expressway created some traffic challenges for exhibitors and visitors last year.

    “Since the construction projects are still going on, we decided to move to a new venue. The TBS and the adjourning Cricket Pitch have over 40,000 square metres of exhibition space, which is more than enough for the organisation of LITF. The highest space utilisation of fair in the last five years had been 35,000 square metres,” Ruwase said.

     

  • 200,000 jobs created in one year, says MAN

    ABOUT 240 factories, with projected N140 billion turnover have been operating in the country in the past one year, the Manufacturers Association of Nigeria (MAN) has said.

    Speaking during a stakeholders’ conference on the review of Common External Tariff (CET) in Abuja, MAN President Kola Jamodu said about 200,000 new jobs were generated within the period.

    This, Jamodu said, has increased capacity utilisation of some companies from 47.50 per cent as at December 2010, to 48.93 per cent last year.

    “This has increased manufacturing investment, as 240 new factories commenced operations within the last one year – with a projected turnover of N140billion, while some of our members have expanded their production base by as much as N100billion.

    “In some sectors, capacity utilisation is as high as 70 per cent.”

    Jamodu said with the right policy framework, the manufacturing sector will respond positively and blossom, adding that the private sector has done it and can do it again once the right policy framework is in place.

    On the tariff issue, Jamodu said tariff is a veritable instrument that could be used to spur the revitalisation of the manufacturing sector, adding that despite the mileage achieved in the partnership on tariff, there are still some outstanding issues that should be addressed to get the desired level of growth and development of the real sector.

    He said a careful study of the CET led to a compilation of the observed anomalies that we forwarded to the government.

    He cautioned against the multiplicity of taxes, saying: “Despite the outcry of the business community over the prevalence of these taxes and levies at the three tiers of government, some agencies are still introducing licence fees and levies that constitute multiple taxation, and in some cases, arbitrary

    “The latest addition is the imposition of licence and mandatory contribution to a trust fund by the National Lottery Regulatory Commission (NLRC) on our member companies carrying out promotional activities to boost their sales under the prevailing difficult business environment”.

    Jamodu recommended that sales promotions should not be covered by the National Lottery Regulatory Act in order not to add to the cost of doing business in Nigeria, moreso as this cannot be in the spirit of the law setting up the lottery commission.

    He added: “Tax administration should be coordinated. There should be effective implementation of Act 21 of 1998 on taxes and levies collectible by the different tiers of government, with a view to making them respect the law. There is also the need for a constitutional review of tax powers of each tier of government.”

    He urged the government to reduce corporate tax rate to 20 per cent from the present level of 30 per cent to encourage investors in view of the various challenges experienced by manufacturers.

    MAN Director-General, Mr Yinka Akande said, there was need for government to address the issue of multiple taxation suffered by its members across the country.

    He urged members to seek better ways the industrial sector could grow despite the challenges.

    He said: “Despite the not too friendly business environment, your

  • Govt rules out tariff reduction on palm oil

    palm-kernel

    The Federal Government will not allow importation of “cheap palm oil to kill the local industry, Minister of Agriculture and Rural Development Dr Akinwumi Adesina has said.

    He spoke in Abuja during the signing of an agreement between the ministry and 18 oil palm estates.

    He said: “Our view is that the ECOWAS Trade Liberalisation Scheme’s Rule of Country of Origin provision should not be exploited to bring in crude palm oil at an unauthorised and ridiculously low price that discourages local investment. I want to be very clear on this: we will not allow imports of cheap crude palm oil that will undermine our palm oil transformation agenda as a country.”

    Adesina lamented that in the late 60s, Nigeria was the leading producer and exporter of oil palm produce and for a better part of this period, the largest world producer, with the country accounting for 27 per cent of the global market of palm oil in 1961.

    “Our production declined from 167,000 metric tonnes in 1961 to 25,000 MT by 2008. In the same period global production of palm oil expanded from 629,000 MT in 1961 to 33.3 million MT. The situation changed following the aberration caused by the discovery of crude oil in commercial quantity in the early 70s,” he said.

    The minister disclosed that his ministry was engaging stakeholders in this regard to ensure their understanding towards supporting the establishment of local plantations, local production and processing.

    He said the oil palm industry had a lot of potential, not only for making profit and creating wealth but also providing employment.

    He stated: “Some oil palm companies, which are quoted in the stock exchange, are now the best performing stocks on the exchange. We want them to continue to do well. And in support of this, we are doing everything possible to promote the enabling environment that will ensure that investments in oil palm are sustainable and that the market remains competitive for all local investors.”

    Recalling the fact that Malaysia, which is the second largest producer after Indonesia, collected its first improved nuts from Nigeria, the minister said Malaysia now earns $18billionn per year from palm oil production.

    As a first step, Adesina said four million nuts had already been secured from the Nigerian Institute for Oil Palm Research, out of which 1,395,000 nuts capable of establishing 9,300ha were being made available to 18 estates at an average of 75,000-82,500 nuts in the first instance.

    This, according to him, is to expand their holdings by between 500 and 550ha each while the balance of 2,605,000 nuts capable of planting 17,366ha will be raised by accredited outgrowers for distribution to farmers under the consolidated growth enhancement support for the oil palm value chain in 2013.