Category: Industry

To revitalise the real sector, the Federal Government has reviewed the Public Procurement Act to compel its agencies to patronise made-in-Nigeria goods and services. At least 40 per cent of their procurement should be locally sourced. But states are reluctant to toe the same line. To win the states over, manufacturers may set a minimum percentage threshold for them to buy local products. Will the states help manufacturers to boost competitiveness and create jobs? Assistant Editor CHIKODI OKEREOCHA reports.

The Federal Government’s campaign to encourage the patronage of locally- produced goods and services is on course. However, there are fears that the campaign, though not new, may have been losing steam at the state level.

Governors’ reluctance to enshrine the patronage of made-in-Nigeria products in their states’procurement policies and processes is said to be clogging the wheel of progress in promoting patronage of local products.

To reverse the trend, manufacturers have intensified their campaigns to get state governments to set a minimum percentage threshold for their purchases of made in Nigeria products. The manufacturers are specifically agitating that state governments give about 35 per cent Margin of Preference (MoP) in terms of price consideration for locally made products as against the foreign ones.

The 35 per cent MoP means that even if local products cost more than foreign ones, the local ones should be patronised within the set margin of preference. This, according to manufacturers, will complement efforts to promote patronage of made-in-Nigeria products at the federal level, where the Federal Government has fixed a 40 per cent minimum threshold of purchases for Small and Medium Enterprises (SMEs) through Executive Order One.

The Federal Government recently put the spotlight on local manufacturers when, via three strategic Executive Orders, it compelled Ministries, Departments and Agencies (MDAs) to channel at least 40 per cent of procurement to locally-made goods and services. The Executive Orders were signed by Prof. Yemi Osinbajo, then acting president, to promote patronage of local products, transparency and ease of doing business in Nigeria.

On the strength of the order, the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, said any document issued by any MDA for the solicitation of offers, bids, proposals or quotations for the supply or provision of goods and services shall expressly indicate preference to be granted to domestic manufacturers, contractors and service providers.

He said solicitation documents shall require bidders or potential manufacturers, suppliers, contractors and consultants to provide a verifiable statement on the local content of the goods and services to be provided.

Enelamah said made-in-Nigeria products shall be given preference or at least 40 per cent of the procurement spend should be on locally manufactured goods and services.

But the initiative, which gladdened the hearts of manufacturers and other business operators, may have failed to hit the right chord in the ears of state governors. Despite holding promises of boosting the industrial sector’s competitiveness, resulting to increased revenue to government through taxes and job creation, among other obvious benefits, state governments, The Nation learnt, are reluctant to support the buy Nigeria campaign.

The President of Manufacturers Association of Nigeria (MAN), Dr. Frank Udemba Jacobs, did not mince words when he accused the Lagos State government, for instance, of not patronising goods produced incountry. “The state government has not been very enthusiastic about patronising made-in-Nigeria products. Rather, has exhibited high level of reluctance,” he said.

He spoke at the 10th edition of the Breakfast Meeting for CEOs and Managing Directors of member-companies of MAN organised by the Ikeja branch, in Lagos, last week. The forum had: The Nigerian Manufacturing Sector: Current Issues and Strategic Options its theme. It also had special emphasis on “The Impact of Legislation, Regulations and Policies on the Ease of Doing Business in Nigeria.”

The MAN breakfast meeting for MDs/CEOs is a yearly event that provides a veritable platform for effective interactions by over 300 CEOs on economic challenges that threaten the survival of the manufacturing sector and also helps proffer ways to mitigate the threats.

At last week’s event, Jacobs, represented by the association’s council member, Reginald Odiah, said: “We appeal that His Excellency directs a reversal of this trend (the high level of reluctance to patronise made-in-Nigeria products) by ensuring that the policy (buy Nigeria) is enshrined in the procurement policy and process of the Lagos State government.”

Before MAN’s renewed advocacy hit Lagos last week, the association had made the same passionate appeal to the Cross River and Akwa Ibom state governments, urging them to set a minimum percentage threshold for government purchases of made in Nigeria products.

The occasion was the 11th Annual General Meeting (AGM) of MAN held in Calabar, by the Cross River/Akwa Ibom state branch, where Jacobs reminded the state governors that at the federal level, a 40 per cent minimum threshold of purchases has been fixed for SMEs through Executive Order One.

He, therefore, requested that states give an acceptable 35 per cent MoP in terms of price consideration for made-in-Nigeria products as against foreign ones.

Indeed, at various fora organised by MAN, Jacobs had consistently argued 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 request for increased patronage by government at all levels, he said, was in consideration of the prevailing high cost operating environment in Nigeria and the need to keep local manufacturing companies in production. He also said there is  need to retain jobs and create new ones.

The MAN chief added that a minimum threshold for purchase of local products will boost manufacturing, resulting to increased revenue to government through taxes and job creation, among others.

He said: “It is an established fact that when we buy foreign goods, we pay the returns to factors used in producing them in the originating countries.

“That is to say we pay wages, rent, interest and profit to foreign countries with our local resources. On the other hand, greater patronage of made-in-Nigeria products would enhance the manufacturing sector, and this would result in increased revenue to government through taxes, employment creation, reduction in anti-social vices as well as peace for the populace.”

Chairman, MAN Cross River/Akwa Ibom state, Giandomenico Massari, echoed the same sentiment when, at the AGM, he said when governments patronise made-in-Nigeria goods instead of buying foreign products, the economy will grow faster “because there will be a ripple effect on job creation and increased value chain, which will in turn stimulate the economy.”

Massari expressed hope that states and Federal Governments will make it a policy to buy Nigerian goods and grow the industries, the economy and indeed, the naira. The belief is that by curtailing the growing demand for Foreign Exchange (forex) for consumption rather than capital products and equipment, the local currency (the naira) will be strengthened.

Experts also said cutting down on Nigerians’ insatiable appetite for imported goods and services at the detriment of locally produced ones will significantly reduce the pressure on forex caused by the nation’s huge import bills and low receipts from exports. They note that strong local demand is the foundation of a manufacturing sector that can grow into a robust export industry.

This must be why manufacturers insist that strong local demand via the buy Nigeria campaign must be driven by states, if the targeted objectives are to be met. They believe that if the initiative must succeed, it should not be pushed by the Federal Government alone; it must have the buy-in of the 36 state governments.

Noting Nigeria’s impressive ranking in the World Bank’s latest ‘Doing Business’ report, manufacturers and other real sector operators said if the government could complement this by increasing their patronage of locally-made products, the economic recovery momentum will be sustained and strengthened.

The World Bank’s latest report showed that Nigeria climbed 24 places in the rankings, earning a place on the list of 10 most improved economies in the world.

And to sustain the tempo, operators say that federal and state government must match words with action on the ongoing campaign on patronage of made-in-Nigeria products.

More importantly perhaps, they argued that the time has come to address the lack of supportive infrastructure and challenging monetary and fiscal policy environment that have been responsible for weakening the manufacturing sector’s capacity to even produce goods and services for local consumption.

The committee on review of the Continental Free Trade Area (CFTA) framework agreement has asked for a two-week extension to complete consultations with major stakeholders. The committee was raised following Nigeria’s refusal to sign the agreement. The extension request may pave the way for Nigeria’s ratification of the free trade pact ahead of the African Union (AU) summit in July. The Industrial Policy and Competitiveness Advisory Council is backing the consultations before Nigeria ratifies the agreement. There are indications that Nigeria may sign the proposed agreement, reports Assistant Editor CHIKODI OKEREOCHA.

The dust generated by the hotly debated Continental Free Trade Area (CFTA) agreement is gradually settling down. And going by the wide consultation and robust stakeholders’ engagement on the proposed trade liberalisation deal, there are strong indications that Nigeria may eventually endorse the agreement, which it earlier boycotted following sustained agitation against the deal by some experts and critical stakeholders.

Last week, the committee set up by President Muhammadu Buhari to review the CFTA framework agreement, after Nigeria boycotted AU Assembly’s extra-ordinary summit  in Kigali, Rwanda on March 21, asked for a two-week extension. This was after the deadline for submission of its report expired on Thursday last week.

The Nation learnt that at the committee’s meeting last week, presided over by Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, the committee requested for extension to enable it strengthen consultations with critical stakeholders and determine how various sectors of the economy will benefit from the proposed agreement.

It will be recalled that President Buhari had on March 27 set up a committee to review the CFTA framework agreement, which sought to liberalise services and trade and remove tariffs on 90 per cent of goods. It sought to bring together 55 African countries with a combined population of more than 1.2 billion people, including a growing middle class and a combined Gross Domestic Product (GDP) of about $3.4 trillion.

The committee was established after President Buhari refused to sign both the CFTA agreement and the Free Movement Protocol in Kigali, citing the need to allow more consultations with stakeholders in Nigeria over the trade agreement, and the need for his administration to be circumspect in entering into any agreement that would make the country a dumping ground and jeopardise its security.

However, in boycotting the trade liberalisation deal, the President buckled under intense pressure by the Manufacturers Association of Nigeria (MAN), Nigeria Labour Congress (NLC), the academia and stakeholders, who vehemently kicked against the deal.

While MAN President Dr. Frank Udemba Jacobs, hinged his opposition on issues of market access and enforcement of rules of origin, among other concerns, the NLC President, Comrade Ayuba Wabba, expressed fears that the trade liberalisation will lead to the collapse of the manufacturing sector and loss of jobs.

Consequently, the president set up the committee to review the framework agreement, which was signed in Kigali, Rwanda, by 44 other African countries. But the committee, at its meeting at the Ministry of Foreign Affairs, was said to have requested for an extension to enable it consult widely before submitting its report.

The meeting had in attendance the Ministers of Science and Technology, Foreign Affairs and the Minister of State for Industry, Trade and Investment, Aisha Abubakar and some top government officers.

They include the Special Adviser to the President on Economic Matters, Adeyemi Dipeolu; Executive Secretary of the Nigerian Investment Promotion Commission (NIPC), Yewande Sadiku; Chairman, Federal Inland Revenue (FIRS), Mr. Babatunde Fowler.

Others at the meeting are Executive Secretary, Nigeria Export Promotion Council (NEPC), Segun Awolowo; Director General of the Nigeria Office for Trade Negotiations (NOTN), Chiedu Osakwe; Senior Special Assistant, Public Sector, Francis Anatogu; a representative of Customs Comptroller-General, A.S Aliyu, and Nigeria Ports Authority (NPA) General Manager, Edward Kabir.

Osakwe explained that the committee had met with the NLC leadership, the Rice Farmers’ Association of Nigeria (RIFAN). It also requested for inputs from other key stakeholders, including, MAN, Federal Inland Revenue Service (FIRS), the NPA, Customs and Immigrations, among others.

While adding that the committee will look at Executive Order 5 when working out the details of the trade, Osakwe, who is also Nigeria’s chief negotiator, said the committee had explained to the various stakeholders the contents of the 250-page document, which some of them had not read.

He, however, warned that many businesses may leave Nigeria to other African markets if Nigeria maintains its ground against the deal. According to him, the CFTA  objective was to use Nigeria as route to other African markets.

The need for wider consultations, which necessitated the setting up of the committee, enjoyed the support and backing of the Industrial Policy and Competitiveness Advisory Council. The Council at its meeting last week, chaired by Vice President Yemi Osinbajo, received a status report on the CFTA and supported the need for more consultations before Nigeria ratifies the agreement.

The 36-member council, which was inaugurated by Osinbajo on Tuesday, May 30, 2017, is made up of leaders in the private and public sectors. It is chaired by Osinbajo, while Enelamah, and President of Dangote Group, Alhaji Aliko Dangote, serve as vice-chairmen, representing the public and private sectors, respectively.

The council was set up to provide input to the formulation of sectoral and industrial policy, and government interventions aimed at enhancing the performance of the Nigerian industrial sector. It provides feedback on government policies and programmes that affect the industrial sector.

In addition, the council makes recommendations, propose initiatives and bring perspectives that promote competitiveness and growth of the Nigerian industrial sector.

It also makes inputs to Nigeria’s trade negotiations and agreements with a view to ensuring that the view of industry operators and the nation’s industrialisation targets are taken into cognisance.

Other terms of reference of the council include proposing targets for national industrial output and investments across major industrial sectors; tracking the progress made on specific public and private sector initiatives aimed at transforming the industrial sector and meeting its industrialisation targets.

Members of the council also serve as ambassadors of the industrial sector and as platform to facilitate communication on current and emerging issues affecting industry, and ensuring regular interaction between government and stakeholders in the industrial sector.

Enelamah, who briefed newsmen after the council’s meeting, last week, said the council reinforced the importance of consultation, which was what the President said. The meeting agreed with the President that more consultation is the way to go because the African CFTA Agreement will have implications for us, which we hope will be positive,” he said.

While pointing out that the private sector was critical to the implementation of the agreement, which made it imperative that they be consulted before Nigeria signs the agreement, the minister said the Council took stock of work being done on 49 interventions that have been identified and the progress made.

According to Enelamah, the council discussed four areas where critical intervention were needed and where progress had been made, including anti-smuggling and what was being done; partnering the states on infrastructure and broadband expansion; financing and the involvement of private sector in roads construction and rehabilitation under a trust scheme.

The Nation learnt from reliable industry sources that the activities of the committee and the council were all geared towards smoothening the perceived gray areas in the CFTA framework agreement and addressing the concerns raised by MAN and other interest groups before Nigeria signs the agreement.

Recall that Jacobs has been vociferous in his argument that the agreement, in its current form, will put Nigeria’s manufacturing sector and the economy in general at a gross disadvantage against other countries.

This was why he called on government to convene a special meeting of relevant stakeholders, including experts on trade policy, to quickly review the text of the draft agreement to reflect Nigeria’s national interest.

He said: “We are at a great disadvantage to many countries in the continent in terms of infrastructure such as inadequate power, bad roads, and inefficient rail services.

“Though, we acknowledge that government has scaled up intervention in infrastructural development, as evidenced in devoting more funds to capital projects in 2018 budget, until we achieve appreciable progress in this regard, we would be competing at an unfair advantage.”

He, therefore, advised government to back out because there was no adequate and proper consultation. “Ideally, we had expected that we would be carried along, because some critical concerns that would have been addressed during negotiations were not adequately addressed. It is important to address the concern of the private sector during the negotiations,” MAN president said.

A source conversant with details of the consultations made by the CFTA review committee said the committee has been working assiduously to allay private sector’s fears, particularly MAN. The source, who declined to be mentioned, said with work done so far, it is almost certain that Nigeria will eventually sign the free trade deal.

The source said even before President Buhari’s last minute decision to cancel his scheduled attendance of the extra-ordinary summit of the AU in Kigali on March 21 to sign the CFTA framework agreement, there had been eight rounds of negotiations, mostly led by Nigerian officials, including Enelamah.

Apart from the industry minister, the NOTN, which is headed by Osakwe, was also deeply involved. Also, the decision to attend the summit was a Federal Executive Council (FEC) resolution. The FEC had actually approved that Nigeria should sign the framework agreement for the establishment of the initiative.

Before President Buhari backed out of the summit, his first advance party was already in Kigali; the second advance party was at the airport about to board its flight when it was turned back. The President’s trip the following day was also aborted.

What these mean, according to the source, is that the Federal Government realised that it may have pandered to the whims and caprices of some vested interests when it backed out of the deal, an action seen by not a few experts and stakeholders as a negation of Nigeria’s Afro-centric foreign policy stance.

According to Abuja Chamber of Commerce and Industry President, Mr. Adetokunbo Kayode, the CFTA represents a major opportunity for Nigerian businesses to gain greater access to the fast-growing African market.

“It is vital that Nigerian businesses continue to diversify their export markets and with this agreement, trade barriers for companies across a number of sectors will be reduced thereby creating access to new markets within Africa.

“Intra African trade as a driver for economic diversification can help to harness the unexploited opportunities that exist in many product categories, particularly food and agricultural products.

“I am optimistic that the Africa CFTA will increase intra-Africa trade by about 52 per cent, resulting in an increase of African manufacturing exports from the current average in which manufacturing only represents about 10 per cent of total GDP in Africa,”he said.

Kayode added that the potential for CFTA is big for both structural transformation and poverty alleviation in Africa. “Nigerian businesses will have access to nearly 1.2 billion consumers through this agreement and Nigeria’s engagement in this region is important as it builds our presence in markets where we should be doing much more business,” he said.

The third edition of Food West Africa Exhibition will hold from May 8 to 10 at Landmark Centre, Victoria Island, Lagos, its organiser, Informa Life Sciences Exhibitions, has said.

Informa Life Sciences Exhibitions, the world’s leading publishing and exhibitions company, said the event is expected to attract over 4,400 experts from 25 countries.

Its Marketing Manager, Nafiu Cengiz, in a statement, said the three-day exhibition is expected to host over 100 local and international exhibitors, adding that two new pavilions have been announced for this year – India and Pakistan.

According to Ryan Sanderson, the Exhibition Director, Food West Africa: “Now in its third year, Food West Africa has demonstrated its effectiveness as a medium for regional and international companies to raise their profile in this competitive industry sector as well as promote supply chain partnership, along with imports and exports.

“The event is a must for Food & Beverage (F&B) industry professionals from the West African sub-region who want to capitalise on the best opportunity in the industry.”

Also coming are Bestway, the largest independent cash and carry operator in the United Kingdom (UK) and supply partner to over 70,000 independent retailers, 40,000 catering and foodservice operators, and key exhibitors, such as Just Food Limited, ABX Food, AgroNigeria, Graceco, and Sona Agro Allied Food Industries.

There will be a two-day free conference that will focus on issues in food supply chain management. “The conference has been crafted to determine challenges and help improve current systems and procedures in doing business in the West African F&B industry,” Sanderson added.

The co-founder, SheLeads Africa, Afua Osei, has lamented the harsh operating environment in the country, adding that women particularly are worst hit.

Speaking at the maiden edition of Women in Business, a networking session for women in business powered by Cloudcover Limited, she  urged women to remain undaunted but strike to attain greater heights.

She said: “It’s a tough society with series of odds stacked against women but we must never give up. We will find it hard going alone but our strength is in our unity. When we collectively face challenges, we will achieve more. We should network more, share insights more and seek solutions together. We must not be overwhelmed by the institutional and cultural hurdles in our paths, we must refuse to be limited.

“This is a unique opportunity that has been offered to us by Cloudcover, we should do well to seize it and also look into offerings by the company that can assist us in our respective endeavours. Whether entrepreneur, professional or businesswomen, we will find the device invaluable.”

Group Chief Operating Officer of Cloudcover Limited, Eleanor Potter, said the aim of the interaction was to help women surmount cultural and institutional hurdles they face in realising their career and business goals through quality networking.

She said that Cloudcover recognises the huge but underappreciated roles women have been playing in the business landscape and will continue to offer them innovative solutions that will give them a head start and make their tasks easier in whichever sector of the economy they are playing in.

Potter said: “We recognise the thousands of women playing in different sectors of the economy and who need help to further progress along. No matter whom you are; established entrepreneur, up and coming one, a professional, Cloudcover will empower you to do more through these networking sessions and our innovative internet and data solutions like the Cloudcover CC1 MiFi device that makes use of dynamic network roaming to give users seamless and constant internet connectivity across seven network providers in Nigeria. With the CC1 device, women and indeed everybody no longer have to own multiple SIMs and MiFi as the device uses virtual sim technology. These and more are ways by which we will continue to help women grow.”

Co-founder of Cloudcover Limited, Uchenna Agbo, said  being women themselves, they understand the challenges businesswomen, entrepreneurs and professionals are facing in Nigeria, hence their resolve to create a platform to help as many as possible.

She said: “In spite of the odds, women have been holding their own but we need to do more, hence our resolve to facilitate the networking session. It will be a continuous one and we are sure it will positively impact diverse women.”