The Nation Newspaper

Tag: imports

  • ‘Weak regulation, imports killing local industries’

    Acting Managing Director, Vono Products, Mr.Tunde Anjorin has blamed the parlous state of domestic manufacturing firms in the country on weak regulation and porous borders.

    He added that one of the challenges facing the manufacturing sector is sub-standard imported products.

    He spoke at the weekend during the company’s Annual General Meeting (AGM) in Lagos. He said if regulatory authorities are proactive, local companies would be protected by preventing imports of poor quality goods in to the Nigerian market.

    He said to check this, the company has decided to ensure that its products have distinctive features which consumers can identify with in the market place.

    He urged the relevant agencies to intensify efforts aimed at checking the uncontrolled influx of these products from the Asian sub-continent at very cheap prices, but with very low quality, adding that   the continous inflow of such products will affect the capacity of local indigenous to grow, improve on return on investment and create jobs.

    Anjorin said: “Vono has grown from a mere foam and related products’ company to  a multifaceted one that has a range of products such  as wood furnishing, metal, office, hospital and hotel furnishings.

    “We are also promising better days ahead for our shareholders from what has been in operation in the last five years, and assuring our customers of our planned introduction of  new products that are pocket friendly in the soon to be introduced  segmented market.

    “We are bringing in innovative products to address all our market segment, but we urge our regulatory bodies to do the needful in such a way as not only to fulfill their mandate to the public but also save the local manufactures from unhealthy competition.”

    He warned that the more porous our borders are, the more we kill our local industries, while creating jobs oversea for the producers of these sub standard products that come in daily into the country.

    The firm’s Chairman, Dr Mohammed Yinusa, said operations in the company were influenced by the changes in the global and national economic scenario.

    He said globally, commodity prices weakened significantly last year due to the impact of economic decline in Brazil, China, Russia and other emerging markets.

    He noted the several facets of pressure on the nation’s economy, saying they have made the economy to be vsulnerable, saying this was compounded by the fall in global oil prices from  a high of  $106 per barrel at the beginning of 2014 to below $60 per barrel at year end.

    Yinusa said this turn of event changed the U.S. dependence on its traditional oil suppliers thereby forcing our country to explore new markets in Asia and elsewhere.

    He said the state of uncertainty in the country impacted business performance for the year, adding that in the face of the daunting environment, the company  achieved operating revenue of N889.7 million, representing a growth of more than five per cent over the previous year.

  • The Economist: $29.8b reserves fit for six months imports

    The Economist: $29.8b reserves fit for six months imports

    The $29.8 billion foreign reserves can only cover less than six months of imports – a threshold that may threaten Nigeria’s balance of payment transactions, Afrinvest West Africa Plc Managing Director Ike Chioke has said.

    In a report titled: Nigerian economy and financial markets: After elections … what next? released last weekend, he said the reserves have tumbled by 14 per cent to $29.8 billion despite the accretion to the reserves.

    Chioke said despite the N200 per dollar foreign exchange (forex) rate forecast for this year, the forex pressure may persist after the elections because of the fallen crude oil prices.

    The devaluation of the naira, he said, is taking its toll on the general price levels, arguing that as against the eight per cent inflation rate last December; general price level inched higher by 0.2 per cent each in January and February to settle at 8.4 per cent in February.

    Chioke expects the fiscal policy to remain tight after the elections, as the Monetary Policy Committee (MPC) considers whether to either preserve foreign portfolio investments or ease the monetary environment to encourage lending.

    He said: “As a result of the huge participation of the foreign portfolio investors in the Nigerian capital market, the need to attract capital inflow, as well as save the depleting external reserves year-to-date decline of 12 per cent to $29.8 billion may compel the CBN to keep the Monetary Policy Rate (MPR) at 13 per cent, or plus one per cent till end of 2015.”

    The persistent decline in crude oil prices, which exposes the economy’s weak revenue structure, has increased the country’s risk premium, Chioke said.

    “In a bid to reduce the challenge of increased lending, we expect the government, through the CBN, to come up with additional stabilisation funds, in addition to the recent N300 billion Real Sector Support Facility to select sectors that would foster diversification of Nigeria’s revenue base.

    “In the light of the Single Treasury Account (STA) policy, we expect the CBN to unleash the strings of public sector deposits from current 75 per cent as we expect less public funds will be available to the banks,” he said.

    He said the threshold of private sector deposits currently at 20 per cent, may be tweaked plus or minus five per cent before the year ends, if the exchange rate is stable.

    Chioke said it is expected that the CBN would revert the Net Open Position (NOP) to one per cent from 0.5 per cent before the year ends. Foreign Portfolio Investors (FPIs) fears.

    He said: “In a bid to stabilise the naira and preserve the external reserves, the apex bank devalued the naira by 8.4 per cent last November. However, with sustained pressure of the foreign exchange rate, the CBN shut down official window in February 2015, implying another tacit devaluation of the naira.

    “This move led to a relative stability in the currency market as CBN intervenes to meet excess demand through special intervention. We attribute this hike in general prices to increase in price of imported goods resulting from pressure on foreign exchange rate.”

     

     

     

     

  • Nigeria moves to save N431b from wheat imports

    Local wheat production is rising and Nigeria will achieve the 68 per cent local production target by year end, the Executive Director, Lake Chad Research Institute, Dr. Gbenga Olabanji, has said.

    He   said wheat production in the North would  increase the output from 45  per cent to 60 per cent.

    He added that the 68 per cent output target set by the Federal Government would be achieved by the end of the year.

    This will help the country to save N431bn from its wheat import bill.

    The LCRI boss said: ”Farmers have adopted the improved variety and we have released two new varieties in December, Reyna 28 and Norma Boulaug with average yield of 5.5 to six tonnes per hectare.

    “At present, we can say have attained about 45 per cent. But if we are to add all the products in all the Northern producing states, we will have close to 60 per cent, so the 68 per cent is still very much achievable.”

    Olabanji added that Lake Chad had released an improved variety of seeds that could produce up to  six tonnes per hectare of wheat while the area of production had also been increased to about 150, 000 hectare.

    The Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, had in 2013 said Nigeria would meet 68 per cent wheat needs by 2015.

    “In two years, if we accelerate investment, we should be able to produce 2.2 million metric tonnes of wheat. This would meet 68 per cent of our domestic wheat requirements and save Nigeria N431bn in wheat imports annually,” the minister had said.

    The Special Assistant to the Minister on Media and Strategy, Dr. Olukayode Oyeleye, however, said Nigeria had over the years witnessed some setbacks in local production of the commodity due to lack of planting materials, government policy changes and lack of incentives to stakeholders.

    Oyeleye said:  “The huge increase in consumption coupled with low productivity resulted in importation to fill the gap between demand and supply.

    “Local consumption in the country has reached four million tonnes while production stood at 100,000 tons in 2012. To reverse this trend where more than N600billion in foreign exchange is spent on wheat importation, the Wheat Value Chain was put in place.’’

  • Govt may ban fertiliser imports

    The Federal Government is drafting a legislation to ban the importation of fertiliser, Planning Minister Abubakar Olarenwaju Sulaiman has said.

    He said a ban was necessary to protect local producers.

    Sulaiman spoke during a visit to Super Phosphate Fertiliser and Chemicals Ltd in Kaduna.

    He said the ban would also include any product which the economy has the capability to produce to reverse the adverse effects of cheap foreign imports on the local manufacturing industry.

    Sulaiman said: “We need to stop importation of products that we can produce in Nigeria, including fertiliser.

    “A policy statement is coming out in a few weeks to address this. What we can produce in Nigeria, we must not import.”

    Sulaiman also reiterated the government’s commitment to revamp the power sector, saying, “Government is doing everything right to make sure that the power sector works better and more efficiently for Nigerians to enjoy.

    The idea of privatisation is in the best interest of Nigerians.”

  • EU imports from Nigeria hit N6tr

    EU imports from Nigeria hit N6tr

    The European Union imports from Nigeria were valued at N6 trillion in 2013, the EU Ambassador, Head of Delegation to Nigeria and the ECOWAS, Michel Arrion has said.

    Speaking at the EU-Nigeria business forum held in Lagos, he said EU investments in  Nigeria as at the end of last year reached N5.7 trillion and is still counting.

    “EU Foreign Direct Investment (FDI) stock in Nigeria grew from N5.3 trillion in 2011 to N5.7 trillion in 2012. The EU is also Nigeria’s most important trading partner,” he said.

    He added that though “Nigeria maintains a positive trade balance with the EU and the EU remains the biggest market for both oil and non-oil exports (such as leather, cocoa, sesame, etc.), it is imperative to address the EU- Nigeria relationship towards a more diversified composition and a strengthened ECOWAS regional market”.

    He advised Nigeria to pursue regional integration in trade and commerce as it would be the biggest beneficiary.

    “The European Union is the most accomplished example of regional integration at work. Integration has led to competitiveness within the union, removal of obstacles to free movement of goods, services and people and led to greater prosperity for EU citizens. Nigeria is the largest economy in Africa and the industrial hub of West Africa. Nigeria must see the West African market as an extension of its domestic economy because Nigeria stands to be the greatest beneficiary of an integrated West African market,” he explained.

    He added: “This is what the EPA seeks to achieve; consolidation of the regional markets, promotion of regional trade, removal of barriers to trade while protecting sectors that are considered sensitive to the economies of the ECOWAS member states. We must understand that it is not a bilateral but a regional issue and Nigeria must seize the leadership role and drive this integration.”

    Meanwhile, the volume of trade between Nigeria and the United Kingdom (UK) also peaked at N1.9 trillion last year, said David Heath, UK’s Prime Minister’s Trade Envoy to Nigeria, at the conference.

    He said Nigeria has a slight trade advantage over the UK in the figure, but didn’t provide specific data to support the claim.

  • FAO predicts increased wheat imports

    FAO predicts increased wheat imports

    Pakistan’s wheat imports are set to increase considerably and reach about 950,000 tonnes during 2013-14 marketing year up to April next year, a new report of Food and Agriculture Organisation (FAO) suggests.

    The ‘Global Information and Early Warning System’ on food and agriculture, which monitors food security situation of FAO member countries, says that the wheat imports will be necessitated reflecting the insufficient 2013 wheat production for a second consecutive year.

    As the planting of the 2013/14 Rabi crops, including mostly irrigated winter wheat and barley, is currently ongoing, the total area planted to wheat this year is expected to increase to almost 9 million hectares, some 4 per cent above last year’s below average level.

    The above-average monsoon rains helped replenish water reserves and improved soil moisture conditions, benefiting planting activities and early crop development, FAO monitor says.

    Official target for the 2014 aggregate wheat production is set at 25m tonnes, about 3pc above last year’s near-record level.

    The 2013 winter wheat crop harvested by June this year is officially estimated at 24.2m tonnes, about 3pc above last year’s flood-affected output.

    Culled from ww.dawn.com

     

  • How to stop Nigeria’s N1b rice imports

    How to stop Nigeria’s N1b rice imports

    The Federal Government has been urged to improve on local rice to provide better yield if the country is to stop its importation and achieve self-sufficiency and food security in 2015.

    Speaking on Analysis of the policy options for expanding output and improving performance of the rice milling sector in Nigeria preliminary findings, in Abuja, a Research Fellow at the Development Strategy & Governance Division, United States-based International Food Policy Research Institute (IFPRI), Michael Johnson, said the quality of locally milled rice needs to be improved to enhance competitiveness with imported products.

    To increase competitiveness with imported brand, Johnson urged the government to improve processing and handling of local species, arguing that given the current milling and operating costs, the sector cannot compete without the government placing imported rice on tariffs.

    Industrial rice processors, he said, can only mill 40 per cent of the local paddy rice due to lack of good quality paddy rice. He also said large scale mills have greater potential to improve the competitiveness of local rice with imports.

    He said Nigeria’s fertile land and rich agro-climatic conditions, provide enormous potential to feed its population, generate huge potentials for jobs and income for its people.

    He noted however, that the country’s local rice production still accounts for less than 50 per cent of its total consumption and the demand gap has been filled by polished/milled rice imported mostly from India, Thailand and Brazil.

    He said the government’s Agricultural Transformation Agenga (ATA) has listed rice as one of the five commodities to attract special focus for increased production.

    He was of the opinion the nation’s rice self-sufficiency policies are very important but the policies should be workable and sustainable by making the nation’s rice globally competitive.

  • N2,319tr imports are from Asia, says report

    Goods worth N2,319.9 trillion were imported from Asia last year, the National Bureau of Statistics (NBS), has said.

    According to NBS report, the imports represent 41.2 per cent of total imports for last year put at N5,624.9 trillion. The records show that the country’s major imports came from Asia.

    Other major imports, according to the report, came from Europe and America, which accounted for N1,490.4 trillion, representing 26.5 per cent and N1,421.9 trillion or 25.3 per cent.

    The import trade is still dominated by the imports of machinery and transport equipment, manufactured goods and commodities.

    NBS had in March said Nigeria’s import trade value dropped significantly last year to a cumulative value of N5.62 trillion, as against the N9.89 trillion value of imported goods into the economy in 2011.This represented 43.1 per cent decline.

    The report noted that the import bill were equivalent to 13 per cent of the Gross Domestic Product (GDP) for last year.

    The trend, according to NBS, indicates that the efforts by the Federal Government to grow the economy by improving local capacity in the agricultural, manufacturing and other key sectors of the economy are yielding to desired results.

    The report released in March, listed beverages and tobacco, crude inedible materials, mineral fuel and oils, fats and waxes as contributing to the significant drop in the value of yearly imports

    However, the decrease in imports was across all categories, as machinery and transport equipment, Nigeria’s biggest import segment, declined by 63 per cent, following modest growth of two per cent in 2011.

     

  • Ibeto Cement imports just 1.5m metric tonnes annually

    Ibeto Cement imports just 1.5m metric tonnes annually

    Contrary to the claim by the Dangote Group that the nation’s cement market has been flooded with imported products resulting in a glut, the Ibeto Group has stated that there is no way the volume of cement which is imported by their company can induce any form of surplus as alleged.

    According to Ibeto Group, a glut is an economic phenomenon that results when a market is excessively supplied with a particular product and the first evidence of such a situation is the drastic reduction in the price of the product and this has not been the case of cement which is still more pricy in Nigeria than any other nation in the world.

    The group in a statement signed by its Executive Director of Strategy and Public Affairs Dr. Ben Aghazu noted that through a consent judgment entered by the Federal High Court to settle the dispute between the Federal Government and Ibeto Cement Company in Suits Number FHC/ABJ/CS/400/2006 and FHC/ABJ/CS/496/2010, Ibeto Cement Company Limited is currently the only authorized importer of bulk cement in the country.

    Explaining how the consent judgment came about, Aghazu said the Federal Government had issued a guarantee to Ibeto Cement Company Limited that the company’s proposed cement bagging plant in Bundu Ama, near Port Harcourt, shall operate for a minimum period of ten years from commissioning so as to meet the strict funding requirements of the lending institutions.

    The Federal Government had also encouraged the company with appropriate incentives such as reduced duty on imported equipment and waiver of Value Added Tax (VAT).

    “However, in September 2005 a mere three months after our gleaming new plant began operation, the cement cartel led by Dangote Cement used its reach in the Federal Government to unjustifiably and unexplainably close down the operation of the Ibeto bagging plant”

    He said after various efforts of appeal to the Federal Government failed, the company went to court in 2006 to seek justice and the dispute was finally settled out of court after extensive negotiations involving all relevant Federal Ministries and MDAs.

    “In the judgment order, the Federal Government acknowledged that the Ibeto Cement Company Bagging Plant was unjustifiably closed down. The government also acknowledged the enormous losses suffered by Ibeto Cement Company from the unjustified closure from 2005 to October 2007”

    Part of the judgment order states that Ibeto Cement Company Limited shall be allowed to import 1.5 million tones of bulk cement per annum for the period 1st October 2007 through 30th September 2017 in line with the Federal Government guarantee conveyed in the ministry of Industry letters, reference HMSI/EXT/CORR/VOL.X/350 of 5th June, 2002 and HMSI/EXT.CORR/VOL.XII/127 of 29th November 2002.

    With this judgment making Ibeto Group the sole importer of cement into the country for the specified period, the company argued that 1.5 million tonnes, which is less than 5 percent of the annual cement supply to the Nigerian market cannot create a glut.

    Aghazu decried moves to get the Federal Government to, in effect, invalidate the essence of the court order that authorize Ibeto Cement to import this small amount of cement until September 30, 2017, by raising the duty and other taxes on imported cement so as to make the imported cement more expensive than Dangote cement.

    “We do not believe that the Federal Government should be misled into doing this because doing so will go against the spirit of the out-of-court settlement agreement between the Federal Government and Ibeto Cement, especially since Ibeto Cement as stated, is currently the sole importer of cement”

    Ibeto accused Dangote of trying to dominate the Southsouth market through their proposed cement plant to be built in the zone. It also decried attempts to get the federal government to ban the importation of clinker or in the alternative, drastically increase the duties and taxes on clinker imports so as to rattle and destabilise a cement manufacturer in that area.

    Aghazu also flayed that announcement of the closure of Benue Cement Company (BCC) on account of the ‘phantom’ glut describing it as dishonest and false.

    “Time and unfolding events will show that Dangote Group is being economical with the truth in this assertion. We have it on good authority that the Dangote plant in Gboko (BCC) is programmed to shut down for turnaround maintenance only and will resume production when the maintenance has been completed

    He noted that the bulk cement imported, bagged and sold by Ibeto Cement Company Limited is different from the cement made by Dangote Cement Company plc.

    “ours is rapid hardening ordinary Portland cement used by our construction companies and not Portland limestone cement used primarily in residential buildings. These facts are well-known to and acknowledged by Dangote Group. Thus, strictly speaking, Ibeto cement and Dangote cement, being different and also made for different purposes, should not really be competing”

    He then urged Dangote Group to accept reduced profits by lowering the selling price of their cement, a move that will be applauded by the consumers. He also urged them to explore the export option which it has so eloquently campaigned to have capacity to carry out.

    “The Dangote Group has been crowing about its plan to export cement from Nigeria. We urge them to start their export business forthwith. If there is problem with the competitiveness of their made-in-Nigeria cement in foreign markets, we urge them to please take a close look at their components of the costs of goods sold.

    Describing Dangote Group’s monopolistic tendencies Aghazu said that based on published reports Dangote Group occupies the first position in the market share of several essential commodites .

    He said a Dangote report published in 2006 shows that Dangote holds 81 percent of the Nigerian sugar market, 40 percent of the cement market; 33 percent of flour; 54 percent of pasta and 72 percent of salt

    “The latest figure indicates that the Dangote Group still maintains the first position in each of these commodities; now controlling about 93 per cent of the sugar market, 86 per cent of cement, 73 per cent of flour, 74 per cent of pasta and 89 per cent of salt.”

    The Ibeto Group stated that it was imperative to alert the nation on the strategic risk posed by the situation. “We venture to assert that based on Dangote Group’s actions as it pertains to Ibeto Cement Company Ltd, the primary strategy of the Dangote Group in business is to use all available forces in the environment to make sure that they do not have any competition. In other words, they must operate as monopolists.”

    The company stated further that “in order to reduce the adverse effect of monopolies, for safety reasons, and in the interest of the common good, some countries have and enforce antitrust laws that control how much of any strategic market an individual or corporation is allowed to control. Unfortunately, in our country, the antitrust laws probably don’t exist or aren’t enforced when it pertains to the Dangote Group, which holds a monopolistic stranglehold on several significant and strategic sectors of the economy. For example, the President of the Dangote Group, Alhaji Aliko Dangote, is also the President of the Nigerian Stock Exchange, where his companies control some 35 per cent of the total stock value of the Exchange. This situation ought to be very troubling to all knowledgeable and patriotic Nigerians.

    According to Dr Ben Aghazu, the assertion by Ibeto Cement Company Ltd in its statement regarding the dangerous effect of monopolies deserves serious study by our economic planners. “Do we have any antitrust laws on our books? If so, what do they say? If we do not have such laws, why not? Knowledgeable groups, such as the Nigerian Bar Association, Nigerian Economic Society, Nigeria Institute of Directors, Securities and Exchange Commission and members of the National Assembly, should address their minds on the long-range effects of monopolistic operations on our economy and our national security. Let us have a healthy debate on this issue.”