Although Nigerian cables and wires are among the best in terms of quality and durability, their manufacturers are faced with lot of challenges. Many of them have received International Standards Organisation (ISO) certification, which make them the products global brands, yet the industry still contend with cheap and substandard cables from Asian countries. Weak regulation and compliance have exacerbated the problem.
Assistant Editor OKWY IROEGBU-CHIKEZIE reports that unless the government and policy makers insist on proper regulation and compliance, the future of the sector may be bleak.
If there is any made-in-Nigeria product that buyers have confidence in, it is electrical wire or cable. Many of the manufacturers have positioned themselves as competent players in the sector. Though their contributions to the Gross Domestic Product (GDP) are still minimal, some of them are quoted on the Nigerian Stock Exchange (NSE). Most are also award-winners in electric and telecoms cables manufacturing, but they are managing to survive stiff competition from cheap and substandard imported cables and wires.
Studies have also traced the various cases of fire outbreaks in homes and offices to imported cables, which are usually below specification with exaggerated grade. The stunted growth in the sector has also been traced to faking and sub-standardisation. Manufacturers said faking and sub-standardisation is caused by unscrupulous businessmen who travel to China and India to not only fake original brands but also ask for reduction in the diameter of copper content of the cables and wires, adding that this is the cause of frequent fire in homes and offices. The reduction, which affects the quality of the cables, is sometimes from 2.5 square metres to 1.73 square metres, which make them hot and unable to carry the current that consequently lead to the frequency of fire outbreaks.
It was also gathered that the importers are able to achieve these evil machinations due to weak regulatory institutions, poor legal framework and poor policy implementations. This brings into question the capacity of the Standards Organisation of Nigeria (SON) to stem the tide of the importation of fake and sub-standard cables into the country.
Director-General, Lagos Chamber of Commerce and Industry (LCCI) Mr. Muda Yusuf said the preponderance of cheap and substandard cables in the country is due low level of compliance with regulations and laws of the land.
How fake and substandard cables come into the country
According to Yusuf, importers fake documents including specification and other information about the products they bring into the country. He said: “Some of these importers come in with fake documentation, incorrect specification and information on the cables and wires they imported into the country from these Asian countries especially China and India.”
He also said a major factor encouraging the importation of fake and sub-standard cables and wires is the decline in value system in the economy as the system gets easily compromised. He stressed that any system that can be easily compromised cannot be effective. He regretted the inadequacy of consequences for infraction and urged for adequate penalty for offenders.
He said: “It depicts the decline in the value system of the country because the system is easily compromised. There are many unscrupulous business people who go out there to specifically request for substandard products in order to get something cheap to make a lot of profit. In other climes, if you commit such atrocities and you are caught, you pay dearly for it because there are consequences for infractions. If our system had been such that adequately penalises people that commit crimes, there will be a reduction of such infractions.”
He said all these portend danger to the economy especially safety issues. For instance if one uses sub standard cables for wiring his house or office, one runs the risk of losing one’s life savings. There have been reported cases of fire incidence attributable to use of imported sub standard cables, he added.
Way forward
Yusuf said local manufacturers can assist the regulatory agencies with intelligence reports. He noted that except they have such intelligence reports they will not be effective in their regulatory mandate. He also stated that because the local manufacturers have their distributors in the markets, it makes it easier to get vital information from them such as knowing those behind the importation of fake goods and the warehouses they are stored.
Another challenge has to do with the nature of the distributive sector of the economy. He said it is similar to a jungle where the rule is the survival of the fittest. Because of competition, people do all manner of things to make sure that they stay afloat and in the process they compromise standard, safety and basic values just because they want to make it big. “People engage in cutting corners. I think it’s an orientation and culture issue that needs to be addressed by government and the people as a whole. Our system should have deterrent functions that penalises offenders because its absence has created chaos with those doing genuine business losing money while those engaged in shady deals are making huge profit from it,” he said.
The Managing Director, Coleman Technical Industries Limited, Mr. George Onafowokan, said local manufacturers are not only faced with the challenge of importation of fake and substandard cables into the country but also that of sufficient funds to expand capacity.
He called for more intervention fund for manufacturers, especially cable manufacturers noting that it is only through such interventions that the sector can make significant input into the sector.
According to him, previous government’s interventions were deployed to capacity utilisation and quality improvement.
The crippling power sector challenge has not helped matters. Managing Director, Cutix Plc., Ifeanyi Uzodike, lamented that power has been a major challenge for the company, noting that stable power could drastically reduce the cost of doing business.
He said: “Our major challenge is the fact that there is no power and we have to depend on our power to carry out the installations here. If you get to the factory, you will see we are running on a 1000KVA generator at the new plant and another 1000KVA at the old site. There is unstable public power; we have to burn diesel and also buy new power generating sets. We have bought new generators that would be delivered soon. The money invested in running these generators would have been ploughed back to expand production capacity.”
“Actually, some business men who want to cut corners would go to China and ask them to produce cables to specifications that are below international standards, with the hope of making more profit. When these goods get into the country through the ports, customs officials at the ports turn a blind-eye, and allow the goods entry.”
President, Manufacturers Association of Nigeria (MAN), Chief Kola Jamodu, urged government to disregard the Economic Partnership Agreement (EPA ) by the European Union. He said his argument is based on the fact that if signed, it will affect local industries. He argued that no country can develop without protecting its industries. MAN believes that Federal Government’s efforts to enlist the support of other members of African Union to reject EPA in its present form should be sustained.
Integrity of locally-made cables
Indigenous cable makers say locally made cables are the best. Yusuf said generally Nigerian cables have a reputation of being of high quality, adding that they may be a bit expensive than the imported ones.
Onafowokan said the firm’s new factory with an installed production capacity to process 15,000 metric tons of copper and 18,000 metric tons of aluminium per annum which is equivalent of 50 per cent of the country’s total capacity and power cables have proved its consistency in quality. He said the product will feed the GENCOs and DISCO (Successor companies from the unbundled Power Holding Company of Nigeria)in the power sector reforms. Noting that it will save the nation the much needed foreign exchange as the new owners of the power firms will not only cheaply get the materials they need for generation, transmission and distribution but also on time unlike when they had to import everything that they need.
Onafowokan said if given an enabling environment, cable manufacturers will build capacity and put the nation on the right lane among the comity of nations.
Cutix boss the firm manufactures over 14 different high quality products in the electrical wire and cable market. These include bare copper conductors on reel, bare stranded copper conductor and insulated copper conductors on Reel.
An importer of cables and wires, Mr. Anthony Chikwe, said locally manufactured cables are the best, insisting that as a business man he must survive. Though he said not all imported cables are substandard he agreed that some of his colleagues may not be totally free of the accusation of importing low quality cables. He blamed the regulatory bodies for not doing their jobs well and the government for not providing an enabling environment for businessmen, arguing that this makes a lot of them to think of survival first before the effects of their actions.
Consequences of weak legal system
Analysts say the inability to get convictions in the law courts speaks volumes of the judicial system. Yusuf said the judicial system needs to help the manufacturing sector to keep sanity in the polity. The LCCI boss said If there are situations where these economic saboteurs have been apprehended convicted and publicised, others would have sat up and do the right thing. He regretted the unwinding legal process which makes it almost impossible to ensure that fraudulent people are convicted.
“If people do such things and get away with it, then we have a problem and there may not be an end in sight to stopping the importation of fake cables into the country,” he said.
Chikwe agrees with Yusuf. According to him, since no importer of fake cables has been convicted ‘as they know their way around’, it makes it impossible for new entrants to be properly guided.
According to him , as far as the government does not deem it necessary to put the necessary checks in the distributive trade and do proper monitoring at the borders, there will be no end to the challenge.
