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  • Manufacturers charged on sustainable quality, standards

    Manufacturers charged on sustainable quality, standards

    Local manufacturers have been charged to sustain the culture of quality throughout the entire manufacturing process in order to maintain brand loyalty and ultimately, increase the bottom line.

    Stakeholders in the Food, Beverage, and Tobacco (FBT) sector of the manufacturing industry gave this charge during the 2024 Annual General Meeting (AGM) of the Food, Beverage, and Tobacco sector of the Manufacturers Association of Nigeria (MAN) which held in Lagos, recently.

    The Director General/CEO of MAN, Segun Ajayi-Kadir, who declared the AGM opened, urged manufacturers to prioritise quality, standards, and innovation in the manufacturing process to remain relevant to consumers.

    He stressed the need for collaboration among manufacturers to create a greater impact on the Nigerian economy

    The Head of Corporate Affairs & Sustainability, Rite Foods Limited, Ekuma Eze, described the FBT sector as “a very significant sector in the Nigerian manufacturing landscape.”

    He said the FBT sector represents 34 per cent of the entire manufacturing sector and a Gross Domestic Product (GDP) contribution of about five per cent in 2022.

    Read Also: Manufacturers need energy efficiency, cleaner production

    Eze was Guest Speaker at the AGM themed “Cultivating Value: Employing Quality, Standards, and Innovation in Strengthening Food, Beverage and Tobacco Manufacturing.”

    He noted that although the manufacturing industry is a key driver of the economy, Nigeria’s manufacturers were far from being competitive because of structural and systemic challenges that have inhibited its growth and contribution to the economy.

    “Whereas the Food, Beverage, and Tobacco manufacturing sector remains the largest manufacturing sub-sector, it is still far from competitive on a global scale”, Eze emphasized.

    He said on the local scene, the odds are steeped against manufacturers including poor infrastructure, high inflation, energy issues, forex illiquidity, unpredictable regulatory environment, insecurity, high tax burdens etc.

    According to him, these have severely impacted the profitability of the Food, Beverage, and Tobacco sector in recent years.”

    Eze, however, advocated for strategic government intervention to enhance the sub-sector’s competitiveness, particularly in the context of the African Continental Free Trade Area (AfCFTA).

    “Our policies must encourage manufacturing to ensure economic progress because manufacturing should be a key driver of economic growth, job creation, income generation, and contribution to the GDP,” he said.

    Deputy Director at National Agency for Food, Drug Administration and Control (NAFDAC), Dr. Aina Steven, said local manufacturers must be commended.

    “They (manufacturers) are continually combating such challenges as electricity tariff and foreign exchange volatility within Nigeria’s business environment which has remained volatile, uncertain, complex, and ambiguous,” Dr. Steven, who is also Chairman of the Nigerian Institute of Food Science and Technology (NIFST), Lagos chapter, said.

    Mining sector can contribute 8% GDP to economy

  • Manufacturers need energy efficiency, cleaner production

    Manufacturers need energy efficiency, cleaner production

    With the potential to reduce energy consumption and slash manufacturers’ production cost by as much as 30 per cent, reduce wastages, and also help cut greenhouse emission and propel Nigeria’s goal of achieving net-zero emissions by 2060, the adoption of industrial energy efficiency and cleaner production processes has become a compelling proposition. A win-win for all stakeholders, including consumers, industry operators and the environment, the ubiquitous adoption of energy efficiency could be the tonic to galvanize an economy hobbled by energy access deficit, with economic impact estimated at $28 billion. Assistant Editor CHIKODI OKEREOCHA reports.

    Nigerian manufacturers are between the rock and the hard place with regard to energy consumption and cost. While the current asphyxiating high cost of generating alternative energy for their operations is a major disincentive, sometimes forcing many of them out of business, the energy supply from the national grid has been everything but reliable and business-friendly.

    Yet, the snag is that while inadequate access to grid energy supply to power their operations necessitated the use of alternative sources, this option doesn’t come cheap; in fact, it is killing, literarily. For instance, manufacturers’ expenditure on self-energy generation gulped a staggering N144.5 billion in 2022 alone, representing 87.13 per cent increase from N77.22 billion in 2021.

    However, manufacturers are not the only ones affected by Nigeria’s age-long energy access deficit. Individual electricity consumers are also hurting, as Nigeria, despite boasting a Gross Domestic Product (GDP) of $472.646, still has one of the highest energy poverty rates in the world, with 47 per cent of her population not having access to grid electricity; those who do have access, face regular power cuts.

    The thing is that despite the importance of energy to Nigeria’s economy, low access to modern energy services remains one of the principal constraints to the country’s economic development, with the National Programme Coordinator, Environment & Energy, United Nations Industrial Development Organisation (UNIDO), Oluyomi Banjo, putting the economic impact of Nigeria’s unreliable grid operations at an estimated $28 billion.

    But it is not so much the huge investment by manufacturers in self-energy generation, which, ordinarily, should have been ploughed back in expanding their businesses and employing more Nigerians, or the fact that the overall economy, as a result, is bleeding profusely. Rather, it is the consensus that the resort to alternative energy sources, most of which are harmful to the environment, needed to be checkmated.

    Accordingly, industry operators, including energy and environmental experts, are on the same page that the way to go is to drive the widespread adoption of Industrial Energy Efficiency (IEE) and cleaner sources of energy. According to them, this will, for a start, significantly cut production cost for manufacturers who are the biggest energy users, reduce wastages, help cut greenhouse emission and hopefully, propel Nigeria’s goal of achieving net-zero emissions by 2060.

    Simply put, energy efficiency, according to the Environmental and Energy Study Institute (EESI), involves minimizing energy waste by using less energy to perform tasks efficiently. The concept is widely considered by industry, energy and environment experts as being critical in optimizing energy utilization and reducing waste across production and consumption.

    This must be why UNIDO in partnership with the Global Environment Facility (GEF) and the Manufacturers Association of Nigeria (MAN) is leading the charge to encourage Nigerian manufacturing firms to adopt energy cost saving measures and cleaner and safer production processes to protect the people and the environment they operate in and the future.

    UNIDO is a specialized agency of the United Nation charged with promoting inclusive and sustainable industrialisation in developing countries and economies in transition. Its activities are tailored toward developing industrial policies that are resource-efficient as well as protective of the natural environment and human health.

    UNIDO, according to Banjo, has implemented industrial energy efficiency in over 18 countries around the world and has also implemented resource efficiency and cleaner production in over 60 countries. The GEF, on the hand, is a multilateral environmental fund that provides grants and blended finance for projects related to biodiversity, climate change etc.

    GEF is the largest source of multilateral funding for biodiversity globally, and distributes more than $1 billion a year on average to address inter-related environmental challenges.

    MAN, on its part, represents the interests of over 3,000 manufacturers (small, medium, large and multinational industries) spread across 10 sectors, 76 sub-sectors and 16 industrial zones. Its members are heavy users of electricity in Nigeria, which explains the Association’s keen interest in all electricity related discourse and development.

    It was, therefore, in a bid to drive the adoption of energy efficiency and resource efficient cleaner production by operators in Nigeria’s industrial sector that UNIDO and GEF closed ranks with MAN to organise a ‘Public-Private Dialogue Session for CEOs and Relevant Government Agencies on the GEF-UNIDO Industrial Energy Efficiency (IEE) and Resource Efficient Cleaner Production (RECP) Project’ in Lagos, last week Wednesday.

    The dialogue session was exclusively for CEOs of companies operating within five sectors including Food and beverage, Basic Metal, Wood, Textile & Lather sectors, and the Petrochemical sub-sector. The five pilot industrial sub-sectors for the IEE&RECP project were selected because they consume more energy than other sectors.

    The session considered the implementation status of the GEF-UNIDO IEE & RECP Project, deepened conversation on the impact of relevant energy and environment related policies on the continued survival of industries and discussed the role of CEOs and regulators in ensuring the successful actualisation of the project’s set objectives.

    It also allowed CEOs of selected industrial enterprises to share experiences and testimonies on the benefits of adopting IEE & RECP methodologies in manufacturing operations.

    Explaining the rationale for the Project, Banjo, in his welcome remarks, said lack of reliable access to electricity is one of the major constraints to the private sector, citing World Bank’s ‘2020 Doing Business Report’. He, therefore, said improving power sector performance, particularly in the non-oil sector, will be crucial to foster economic growth.

    Banjo indicated that globally, industries account for one-third of total energy consumption and for almost 40 per cent of worldwide CO2 emissions. He said as a result, the International Energy Agency (IEA) has emphasized that industries will need to reduce their current direct emissions globally by about 24 per cent in comparison to 2007 levels.

    His words: “The need to reduce energy consumption, environmental degradation, and resource depletion by industries in emerging economies is especially evident, since global growth in industrial production since 1990 has been dominated by emerging economies like India and China, both of which account for over 80 per cent of increased industrial production during this period.”.

    The UNIDO National Programme Coordinator traced Nigeria’s march to IEE & RECP to 2017 when the project was collectively developed and submitted by UNIDO under the GEF 6 Programming Circle. He said it was approved for full project development in 2017 and subsequently approved for full project implementation in 2020.

    Read Also: Manufacturers call for balance between inflation, economic growth

    According to Banjo, the outcome of the project was targeted at industries to develop an expert base for Nigeria which could also be exported to other countries in Africa and beyond. “This project will, to a large extent, address the question on how industries can improve their efficiency, increase profitability, operate at international best standards, comply with regulations and maintain improved relationship with policy makers,” he stated.

    Banjo said a pilot financing RECP-IEE scheme has been executed through Nigeria’s Bank of Industry (BoI), while issues around ISO 50000 and 14001 are executed through Standards Organisation of Nigeria (SON).

    The IEE, which is the first pillar of the Project, focuses on the use of Energy Management System (EnMS)/Energy System Optimization (ESO)/ISO 50001 Series approach tailored to Nigeria’s industrial sector conditions, while RECP, which is the second pillar, provides technical assistance package for the continuous application of preventive environmental strategies to processes, products and services.

    On the strength of both pillars, Banjo said the project hopes to support not less than 75 industries across the afore-mentioned five sectors. “We will develop the capacity of the Organised Private Sector (OPS) and develop not less than 300 Nigerian RECP-IEE experts,” he added.

    Some of the benefits of IEE and RECP in industries include increased production efficiency, environmental management and social enhancement. Others are the opportunity of optimizing the use of natural resources and minimizing environmental impacts through reduction in industrial chemical risks to workers and communities.

    By adopting energy efficiency, manufacturing firms in Nigeria can reduce overall electricity demand and optimize existing resources, making power production more effective. By helping to reduce greenhouse gas emissions, the concept also aligns with Nigeria’s goal to achieve net-zero emissions by 2060.

    Expectedly, these mouth-watering deliverables from the adoption of energy efficiency, which is a multi-faceted strategy that benefits consumers, industry stakeholders and the environment, are music in the ears of Nigerian manufacturers. This is because of its capacity to enhance the sustainability of the nation’s electricity sector, drive the manufacturing sector’s sustainability and contribute to broader economic and environmental goals.

    MAN President Otunba Francis Meshioye conveyed manufacturers’ sentiment in favour of energy efficiency when he said the implementation of the IEE and RECP Project “Marked the beginning of a defining moment in manufacturing industries’ collective journey toward sustainable practices that not only drives growth but also preserve the planet for generations to come.”

    Meshioye said: “As we embrace the principles of energy efficiency, we will not only be reducing our carbon footprints, but also be mitigating environmental degradation and saving energy cost. In return, the efficiency, competitiveness and resilience of our operations will be enhanced to meet the increasing demands of our ever-evolving global marketplace.”

    The MAN President, in a welcome address delivered on his behalf by Prince Felix Oba Okojie, said the challenges posed by energy efficiency are multi-faceted, encompassing not only economic considerations but also environmental impacts and social implications.

    He, however, said embedded within the challenges are opportunities to innovate, optimize, efficiently utilize resources and to lead the way toward a more sustainable future.

    Sharing his company’s experiences and testimonies on the benefits of adopting IEE & RECP methodologies in manufacturing operations, the Manager, Engineering Services, PZ Cussons, Mr. Wahid Falola, confirmed that through energy efficiency his company has been able to achieve 30 per cent reduction in cost of production.

    Falola revealed that the first thing the consumer goods manufacturing giant did to achieve the feat was the setting up of a data management system, including carrying out an energy audit to determine the company’s actual energy requirement, choosing energy-efficient appliances and ensuring that devices are turned off when not in use to reduce energy consumption.

    However, while the adoption of energy efficient and cleaner production strategies is gaining traction, it is not a stroll in the park. Stakeholders in the industrial sector say that sustained government support is vital in driving the widespread adoption of efficient alternatives such as Compressed Natural Gas (CNG) and renewable energy source.

    For instance, investment in renewables like solar will not only promote cleaner climatic environment but ensure that energy consumption is cost efficient, and that the cost savings will directly improve profit margin and promote further manufacturing investments.

    But the Director, Corporate Services, MAN, Mr. Ambrose Oruche, said investment in renewal energy is huge. He therefore said “There is need for incentives by the government to encourage manufacturers to go into renewable energy. There should be special funding for industries willing to adopt renewable energy.”

    Oruche also lamented that the price of gas, which is the alternative to diesel, is currently high. This, he said, was why MAN had long been pushing for government to, under the National Gas Policy, re-categorise manufacturers from commercial sector to strategic industrial sector since they (manufacturers) use gas to power their machinery and equipment.

  • Manufacturers brace for challenging year

    Manufacturers brace for challenging year

    The outlook for the manufacturing sector may appear less optimistic, particularly in the first half of this year, as manufacturers foresee notable challenges mirroring the global manufacturing trend, which indicates a sector grappling with difficulties. However, buoyed by the implementation of policy stimulus and bolstered by domestic growth-oriented, export-focused and assertive trade strategies initiated by the Federal Government, manufacturers cautiously express optimism that the sector will experience a rebound, particularly starting from the third quarter of the year. Assistant Editor CHIKODI OKEREOCHA reports

    The Federal Government’s ambitious agenda to leverage a robust and competitive manufacturing sector for sustained economic growth is expected to encounter challenges, particularly in the first half of the year. The Manufacturers Association of Nigeria (MAN) underscored this reality, drawing parallels with global manufacturing trends. The global manufacturing landscape has been marked by challenging macroeconomic variables and external factors, contributing to a projected challenging year for 2024.

     This forecast aligns with the evident decline in the growth of the global manufacturing sector. Notably, China’s manufacturing sector experienced a deceleration, with its growth rate dropping from 8.7 per cent in 2021 to 4.8 per cent in Q3 2023, as reported by the World Bank. Similarly, the United States saw a downturn in its manufacturing sector performance, with a decline to -0.9 per cent in Q3 2023 from the 6.8 per cent recorded in 2021. South Africa also registered a contraction, dropping to -0.17 in Q3 2023 from the 6.7 per cent recorded in 2021. These global trends underscore the challenging environment that the Nigerian manufacturing sector is navigating in the current economic landscape.

     According to MAN, this pattern is consistent across Africa, including Nigeria. The manufacturing growth rate in Africa’s largest economy sharply declined to 0.48 per cent in Q3 2023, compared to 2.4 per cent in 2021. MAN, therefore, concludes that, “Judging from the observed trend, it is obvious that the outlook for the manufacturing sector in 2024 may not be a positive one, at least in the first half of the year. The period will be challenging.”

    However, offering a glimmer of optimism, MAN’s Director-General, Mr. Segun Ajayi-Kadir, highlighted that while the beginning of 2024 may pose challenges for the manufacturing sector, the year could conclude with some measured improvements. He pointed to anticipated policy reforms, an enhanced commitment to domestic production, and an overall positive outlook as factors that may favor the sector in the latter part of the year.

    He specifically predicted a subtle recovery of the manufacturing sector from the third quarter, pointing out, however, that “The envisaged recovery is highly dependent on the deployment of policy stimulus supported with a synthesis of domestic growth driven, export focused and aggressive trade strategies. This will promote resilience, steady growth and ensure that the sector gains meaningful traction in the later part of the year.”

     Buoyed by the anticipated economic recovery, Ajayi-Kadir also envisions that this year, the manufacturing sector’s real growth will likely reach approximately 3.2 per cent. Additionally, he anticipates that the manufacturing sector’s contribution to the overall economy may surpass 10 per cent. The Manufacturers’ CEOs Confidence Index (MCCI) is also predicted to ascend beyond the 55-point threshold.

    The MCCI serves as a crucial gauge developed by MAN to evaluate quarterly fluctuations in manufacturing activities in response to changes in the macro-economy and government policies. As a barometer employed by MAN, the index aggregates the perspectives of CEOs from manufacturing companies, providing valuable insights into their views on changes in the economy. This forward-looking assessment suggests a potential positive trajectory for the manufacturing sector in the coming year. The MCCI operates with a baseline index of 50 points, indicating a neutral or stationary point in the economy. Therefore, any index point above 50 points signals that manufacturers express confidence in the economy, anticipating an improvement in manufacturing performance. Conversely, any index point below 50 points indicates a lack of confidence among manufacturers, signaling potential challenges or a downturn in manufacturing performance. The MCCI, with its clear benchmark, offers a quantitative measure of sentiment within the manufacturing sector, aiding in understanding the prevailing economic outlook.

     Indeed, the higher the MCCI index point, approaching 100 points, the greater the confidence in the economy and the anticipation of an upswing in manufacturing activity. If the aggregate MCCI score rises to the predicted 55 points this year, as indicated by MAN, it signifies an enhanced performance in the period and a growing confidence among manufacturers in the economy. Manufacturers have also expressed expectations for increased manufacturing output, particularly from the onset of the third quarter of the year. This optimism is linked to the government’s disbursement of capital provisions outlined in the budget, with a focus on addressing abandoned, ongoing, and new capital projects. There is an anticipated special preference for locally made products, suggesting a concerted effort to stimulate domestic manufacturing and boost the overall economic landscape. They also projected that the ongoing concessions of seaports, airports and roads may also provide opportunities for the cement sub-sector and contribute to infrastructure upgrade needed to enhance manufacturing productivity.

     That’s not all. The Association also sees a reasonable stability in the monetary policy ambience as the Central Bank of Nigeria (CBN) reverts to playing its conventional roles and deliberately improves Foreign Exchange (forex) supply to the productive sector for import of inputs not available locally. Also, the results of the emerging upward surge in global oil prices, domestic oil and gas production, local refining of petroleum products and projected gains of exchange rate unification, MAN projected, will promote stability in the forex market and impact manufacturing positively from the second half of the year.

     “This will lead to reduction in the pressure on demand for forex and improve the inflow of export proceeds from oil and gas,” Ajayi-Kadir stated, adding that if successfully implemented, the ongoing tax reforms and the envisaged bank recapitalisation will also frontally address the challenges of multiple taxation and poor access to credit that have continued to limit the manufacturing sector’s performance. The MAN boss further said he expects a dynamic implementation of the Electricity Act 2023, which will increase private investment in renewable energy, enhance energy efficiency and improve electricity supply to the manufacturing sector. “The improved electricity supply will ameliorate the issue of inadequacy, reduce the disruptions occasioned by frequent outages and in turn improve energy security,” Ajayi-Kadir said.

    OPS members list ways to achieve sector’s recovery

     The envisaged turnaround in the fortunes of the beleaguered manufacturing sector from the third quarter will, however, not come without diligent implementation of robust and sector-specific policy reforms while addressing the myriad challenges and issues holding the sector down. Accordingly, members of the Organised Private Sector (OPS) have come up with a number of policy reforms, which, according to them, hold prospect of achieving the sector’s recovery in the year and beyond.

     Ajayi-Kadir proposes a strategic approach for the Federal Government to kick-start improvements. Firstly, he suggests a comprehensive overhaul of the power sector, coupled with incentives to encourage investment in renewable energy sources. This dual strategy aims to enhance electricity generation and promote energy-cost efficiency. Furthermore, he advocates for collaboration with sub-national governments and private investors to capitalise on the opportunities presented by the Electricity Act 2023, ultimately strengthening energy security in Nigeria.

     The Electricity Act 2023, replacing the Electricity and Power Sector Reforms Act 2005, introduces a transformative shift by legally permitting states, private companies, and individuals to engage in the generation, transmission, and distribution of electricity. This legal framework aligns with the broader goal of fostering a more diverse and sustainable energy landscape in the country. Ajayi-Kadir’s recommendation underscores the potential for leveraging these legislative changes to usher in advancements and improvements in the Nigerian power sector.

     The Electricity Act 2023 introduces provisions that bring optimism to electricity consumers. Without the need for a license but through an undertaking, private individuals or companies are now empowered to generate up to 1 Megawatt (MW) of electricity at a specific location. This provision is a welcome development for electricity consumers. Moreover, the Act grants private individuals or companies the option to sign an undertaking, subject to the determination of the Nigerian Electricity Regulatory Commission (NERC), to distribute electricity of up to 100 Kilowatts in aggregate at a location. This flexibility allows for more localized and potentially efficient energy distribution, catering to specific needs.

     Additionally, the Act places an obligation on power generation licencees to adhere to renewable energy generation standards prescribed by the NERC. This aligns with global efforts to promote sustainable and environmentally friendly energy practices. It’s worth noting that the NERC will only cede regulatory responsibilities to states that have established electricity market laws. This provision emphasises the importance of legal frameworks at the state level to ensure effective regulation and oversight in the electricity sector.

    Read Also: Manufacturers project sector’s recovery from Q3

     Members of the Organised Private Sector (OPS) are in consensus that the effective implementation of the Electricity Act 2023 could prove to be a significant game-changer, especially for the real sector, with a particular emphasis on the manufacturing industry. Beyond tackling various constraints within the power sector, the Act is anticipated to play a pivotal role in reducing the cost of alternative energy for manufacturers, currently hovering at over 40 percent.

     The Act is expected to usher in a regime of competitive and lower electricity tariffs, addressing a longstanding concern for businesses. The potential positive impact extends to the attraction of Foreign Direct Investment (FDI), as a more reliable and cost-effective energy supply is a crucial factor for investors when considering business environments. In essence, the optimism surrounding the Electricity Act 2023 lies in its potential to create a more favorable and competitive energy landscape, fostering economic growth, reducing operational costs for manufacturers, and attracting foreign investments into the Nigerian economy. The effective execution of the Act holds the promise of reshaping the dynamics of the power sector for the benefit of businesses and the broader industrial landscape.

     The Director General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona, expresses evident concern about the persistent crisis in Nigeria’s power sector and its adverse effects on businesses. She emphasizes the urgent need to address the structural issues within the power sector, highlighting the critical nature of the situation. Dr. Almona’s statement underscores the importance of prioritising structural reforms to create a more stable and efficient power sector. Addressing these challenges is crucial for supporting businesses, promoting economic growth, and ensuring a reliable and sustainable power supply for both industrial and commercial activities in the country. The urgency of her call reflects the immediate impact that a well-functioning power sector could have on the overall business environment in Nigeria. To address the structure of the power sector, Dr. Almona said: “The government needs to consider bringing private sector investment into the transmission segment of the power sector. This would ensure adequate technical and financial capacity for a well-functioning sector to power economic growth.”

     The LCCI DG, who was responding to the President Bola Tinubu’s New Year address to the nation on January 1, said the administration’s commitment to power projects, including the Siemens Energy initiative and efforts to enhance the reliability of transmission lines, was a positive step towards addressing the critical issue of electricity supply, which aligns with the business community’s aspirations for a robust and diversified economy.

     She also described the commitment to building a fair and equitable society and addressing inequality as “commendable,” noting, however, that specific policy measures to close the widening wealth gap are unclear. “Despite setting the parameters for the evaluation of ministers and heads of agencies mentioned, there is a need for transparency in these evaluations to ensure accountability and performance improvement. The LCCI appreciates the President’s efforts to address these critical issues facing the nation. However, the Chamber urges the administration to provide more detailed plans and strategies to tackle these challenges, such as inflation, under-employment, security, and social inequality. A transparent and inclusive approach to governance will contribute to building public confidence and achieving sustainable economic growth,” Dr. Almona said.

     Members of OPS have raised concerns about addressing widespread insecurity and curbing escalating inflation to unlock the potential of the productive sector. Ajayi-Kadir, in particular, has urged the government to redirect the cost savings from fuel subsidies towards implementing a range of production-focused policies. He emphasizes the need for additional structural measures to address the unique inflationary pressures stemming from challenges such as insecurity, energy costs, and transportation expenses.

     This call underscores the interconnected nature of economic challenges, where tackling issues like insecurity and inflation requires a comprehensive and coordinated approach. By redirecting resources and implementing targeted policies, there is a potential to alleviate some of the constraints faced by the productive sector, ultimately fostering a more conducive environment for businesses to thrive. Ajayi-Kadir’s suggestion highlights the importance of strategic and multifaceted interventions to address the complex economic landscape.

     President Tinubu, in his inauguration speech on May 29, made a resolute declaration that “fuel subsidy is gone.” While this bold and strategic move is intended for long-term benefits, it has not been without temporary challenges for Nigerians. The removal of the fuel subsidy has led to a steep increase in fuel prices, exceeding 200 percent across the country. As expected, the elevated fuel prices have contributed to an uptick in inflation, affecting businesses and households alike. The costs of transportation, as well as basic food items, have surged, prompting Ajayi-Kadir’s call for additional structural measures to address the specific inflationary pressures stemming from these changes. The short-term impacts of this policy shift highlight the need for a comprehensive approach to manage the transitional challenges and ensure a more stable economic environment in the long run.

     The LCCI DG, Dr. Almona, said the Chamber believes that while the removal of fuel subsidy was necessary, its impact on individuals, families, and businesses, leading to discomfort, must be carefully managed. She said the potential ripple effects on the cost of living and inflation must also be closely monitored, and that acknowledging the challenges of high inflation (above 28%) and an unacceptable under-employment rate is crucial.

     MAN also wants the Federal Government to utilize the 2024 Budget to sustain effort at improving infrastructural developments, especially in strategic industrial hubs to reduce operation and logistics cost and promote competitiveness. The Association in its ‘Manufacturing Sector Outlook for 2024’ released on January 4, 2024, and made available to The Nation, also called on government to take all measures to boost the level of liquidity and degree of transparency in the official forex window even as the backlog of $7 billion forex obligations is being cleared.

     It also advised government to manage the floating exchange rate system within an acceptable lower and upper bound, pending the actualization of net-exporting economy aspirations, including prioritizing forex and credit allocation to manufacturers. MAN also wants the number of Bureau De Change (BDCs) reduced into large and well-established operators to curb their excesses and untoward operations through effective management and supervision.

     It added that government should encourage inflow of FDI into pre-determined and domestic production-enhancing businesses, and intentionally guide diaspora remittances into non-oil sectors, especially manufacturing to aid forex inflows and curb rising inflation.

     The CBN, MAN also said, should intensify its collaboration with the fiscal authority; Federal Ministry of Finance and by extension, the Tariff Technical Committee (TTC) for proper policy alignment on the appropriate HS Codes for items that Nigeria has sufficient capacity to discourage importation and save scarce foreign exchange. “The apex bank should allow forex access for importation of vital industrial inputs that are currently not available locally and subject them to backward integration policy that gives priority to a predictable sunset clause. MAN offers to be part of a monitoring and evaluation team to ensure that government gets value for incentives offered to achieve this objective,” Ajayi-Kadir said..

     He further called on the CBN to develop a sustainable framework to channel credit interventions into the manufacturing sector, outside the direct intervention. Additionally, it should mobilize commercial banks to intentionally provide long term single digit interest loans to the manufacturing sector to fast-track the actualization of a $1 trillion dollar economy.

    The MAN DG also said government should lead by example and give priority to patronage of made-in-Nigeria products in all its purchases and for all government contracts and projects. “Government should mandatorily upscale patronage of made in Nigeria products by deliberately reducing the excessive reliance of the country on imported products.

     “The three tiers of government should enforce the implementation of the Executive Order 003, same for their Ministries, Departments and Agencies (MDAs). Government should encourage local sourcing of raw materials through comprehensive and integrated incentives to address the challenges of low productivity and imported inflation,” Ajayi-Kadir said.

    Sound and far-reaching recommendation no doubt, but the coming weeks and months will determine if they hit the right chord with the Federal Government and its relevant agencies. However, if assurances by the Minister of Industry, Trade and Investment, Dr. Doris Uzoka-Anite, are anything to go by, then the manufacturing sector looks good to bounce back.

     Recently, the Minister, during the kick-off of a four-day tour of leading manufacturing industries in the country to improve ties between the public sector and private businesses, assured operators in the manufacturing sector of President Tinubu’s readiness to deepen the sector’s development. She explained that the tour was to further extend the focus of Mr. President to the industrial sector, “to assure them of his support to deepen industrial development and to also seek their support on the eight-point agenda of the new administration; to draw attention to the amazing work being done in our manufacturing sector and how it affects our daily lives and economy.”

     Dr. Uzoka-Anite said the government is focused on private-public partnerships to grow the economy, adding that the tour was also to show the government’s steadfast backing for key sectors of the economy and its dedication to on-going cooperation for expansion and advancement.

  • Manufacturers prescribe stiffer penalties for fake, counterfeit drug peddlers

    Manufacturers prescribe stiffer penalties for fake, counterfeit drug peddlers

    The chairman of Greenlife Pharmaceuticals Limited, Dr Anthony Obiora Chukwuka, has called on the federal government to consider stiffer punishment for fake and counterfeit drug peddlers as part of measures to deter them from illicit activity.

    He said without such punitive measures, unscrupulous persons who engage in nefarious activity continue to expose the lives of Nigerians to danger, as their continuous involvement gives the country a bad name.

    Speaking in Lagos during the unveiling of his autobiography titled: “My Wilderness Journey “, the businessman said the government should continue to evolve interventions that will encourage indigenous companies to remain in business.

    He said the healthcare and pharmaceutical industry is too important to be neglected, as it requires the collaboration of professionals and other partners to drive its growth and development.

    Describing his venture into the sector as a development propelled by passion, Dr Chukwuka said enhanced capacity in drug production will assist in catering to the needs of Nigerians confronted with one challenge or the other.

    He said the industry is currently battling the menace of fake drugs and counterfeiting, which is not only giving manufacturers a headache but tarnishing the country’s image in the global arena.

     He described a counterfeit drug as a medication or pharmaceutical item that is produced and sold with the intent to deceptively represent its origin, authenticity, or effectiveness.

    Chukwuka said he did not venture into drug manufacturing for the sake of profit, and that his foray was propelled by vision, which was imbibed through apprenticeship and mentorship.

    He said: “The younger generation should know that you must start life with a vision. You cannot be going from one post to nowhere, you must have a vision. You know where you are going. A vision is about futuristic life. So, once you have a vision, you will not deviate. That is why people should know that somebody like me, with a background, is not fantastic.

    “But today, I can say that the performance is fantastic.  People intending to do well in business must go through the rudiments. I thank God for giving me the courage to do what I did. And I am proud of that.’

    He said the operating environment in Nigeria is challenging, perhaps the reason some pharmaceutical companies are exiting the country.

    He clarified: “Yes, like I said earlier, my going into the pharmaceutical business is a vision. I didn’t go there to make money. I went because I got this vision during the Nigerian Civil War. I was just five years old in 1968. So I had hepatitis, an illness very serious. And because there was no drug, no food, no income, but through the help of the doctors, they were treating all the children, everybody around us.

    “Some had kwashiorkor, some hepatitis.  So, after they treated me, that same year I promised my God that any time I grow as an adult, I must be a member of the Red Cross so that I can treat others.

    Read Also: Students urged to shun drug-abuse

    “That is what gave me the inspiration to go into it. So I went to school, I was a member of the Red Cross and I was doing my work as the leader of the school. I was treating the people.”

    He called on the Federal Government to continue to package interventions for the health sector.

    Chukwuka said: “Every business needs the help of the government, I would like the government to raise the stakes in the fight against fake and counterfeit drugs. One of the ways of doing this is to put in place stringent laws on fake products. There are so many. I didn’t say they are not giving laws but if they are punished severely, then no other person can try to do that again.

    Yes. I think increasing the containment measure is the question. Because when they step up the measures, one or two, three people are punished for doing this, it will serve as a deterrent to others.”

  • Farmers, manufacturers to showcase agric innovations, expertise

    Farmers, manufacturers to showcase agric innovations, expertise

    Farmers across the country, machinery manufacturers and others are expected to showcase some agricultural innovations and expertise at the fifth Nigerian International Agriculture (NIA) Expo.

    The expo, scheduled for October 10 and 12 in Abuja, would feature demonstrations of the latest agricultural machinery and equipment, and allow attendees to experience firsthand the innovations in the industry.

    It will also feature the latest in horticulture, plant production technologies, and innovations in animal husbandry.

    NIA-Expo Project Lead, Yekeen Kazeem, said the project has set the standard for excellence in the sector, and this edition aims to exceed all expectations.

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    He noted that it serves as a meeting point for professionals, experts, and enthusiasts to exchange knowledge and explore opportunities for growth and sustainability in the agricultural sector.

    Kazeem stated that the expo is expected to bring together  stakeholders, including farmers, agricultural machinery manufacturers, horticulturalists, and experts in animal husbandry, creating a platform for innovation and growth.

    “The fifth Annual Nigerian International Agriculture Expo is committed to promoting sustainable agriculture practices, emphasising the importance of eco-friendly technologies, and encouraging responsible farming methods that address food security and environmental conservation.

    “The expo is an annual event dedicated to showcasing the latest advancements and innovations in agriculture,” he added.

  • Manufacturers rue disappointing Q2 performance

    Manufacturers rue disappointing Q2 performance

    Amidst a challenging operating environment characterised by unfavourable macroeconomic indicators, the manufacturing sector witnessed a significant underperformance during the Second Quarter of 2023 (Q2 ’23). This decline was primarily attributed to the gradual recovery from the cash constraints stemming from the naira redesign policy, escalated energy and transportation costs, and, to some extent, the abrupt elimination of fuel subsidies. Nevertheless, a series of complementary policy interventions, introduced concurrently with the fuel subsidy removal towards the quarter’s end, offer potential for revitalising the sector’s lacklustre performance. Assistant Editor CHIKODI OKEREOCHA reports

    The performance of major indicators of the Nigerian manufacturing sector in the Second Quarter of 2023 (Q2 ’23) was less than sterling. Nearly all the indicators that measure the health of the manufacturing sector such as capacity utilization, sales volume, volume of production, manufacturing employment, production and distribution costs, manufacturing investment, and cost of shipment etc. underperformed in Q2’23.

     For instance, to the chagrin of real sector operators particularly manufacturers and the current administration’s economic managers hoping to leverage a vibrant manufacturing sector to put the economy on the recovery path, capacity utilization in the manufacturing sector nosedived by 5.6 per cent in the quarter under review from five (5) per cent contraction witnessed in the preceding quarter.

     Manufacturers’ sales volume also plummeted by 6.3 per cent in Q2 ’23, against the 13 per cent contraction witnessed in the preceding quarter. Volume of production equally contracted by 6.1 per cent from a contraction of 13 per cent recorded in the previous quarter, while manufacturing investment dipped further by 5.6 per cent in the second quarter of 2023 from three (3) per cent contraction recorded in the preceding quarter. The unfavorable changes in the sector’s performance indicators, said to have been largely caused by the slow recovery from the cash crunch that came in the wake of the Central Bank of Nigeria (CBN) Naira Redesign Policy, including high cost of energy and transportation cost, also forced manufacturers’ production and distribution costs to escalate by as much as 17.3 per cent in the quarter under review.

     Production and distribution costs, however, witnessed a slowdown from the 24 per cent increase witnessed in the preceding quarter (i.e. Q1 ’23). Cost of shipment also rose by 14.3 per cent in the second quarter of 2023, though it witnessed a slowdown from the 20 per cent increase recorded in the first quarter of this year. The CBN had under its national currency redesign policy mopped up over 70 per cent of cash in the economy, causing an unprecedented and protracted cash crunch which crippled economic activities in the country and posed major existential threat to most Nigerians, particularly manufacturers who were left agonising over a more than 25 per cent dip in sales of manufactured products, according to the Director-General of Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir.

    To further highlight the severity of the hardship foisted on manufacturers by the policy, and how the slow recovery from the cash crunch it induced largely contributed to the underperformance of key manufacturing indicators in Q2 ’23, the special focus in the Manufacturers CEO Confidence Index (MCCI) for the Second Quarter (MCCI Q2 ’23) was titled ‘How Naira Scarcity Took Toll on Manufacturing Businesses.’

    The MCCI is an index created by MAN to measure changes in quarterly pulsation of manufacturing in relation to movement in the macro-economy and government policies. The Index is, therefore, a barometer used by MAN to aggregate the views of CEOs of manufacturing companies on changes in the economy. MAN, in the MCCI Q2 ’23, released last week and made available to The Nation, said the naira redesign and the new cash withdrawal limits by the CBN resulted in the scarcity of both old and new naira notes across all banking halls and electronic payment channels in the country which took a heavy toll on manufacturing businesses.

     According to the MCCI report, the prolonged cash crunch impacted negatively on manufacturers by limiting their working capital, thus halting their business operations. It also said it crushed the consumer patronage of manufacturing firms and escalated their volume of inventories, especially for retail goods. “By exposing the highly cash-based distributive trade sector to great risk, the economic crisis had severe consequences on the manufacturing value chain and cost of logistics,” Ajayi-Kadir said. The Association also lamented that the naira scarcity clearly wiped out numerous small and medium manufacturing businesses whose transactions were cash-based, especially those within the agro-allied industries who regularly deal with local farmers in remote towns where no formal banking was in sight.

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     He argued that the country’s transition to a cashless economy requires no urgency or policy aggressiveness considering that a lot of progress has already been made. According to him, “A comparative analysis of the country’s cashless status has shown that while the ratio of cash to Gross Domestic Product (GDP) in Europe, U.S. and South Africa are respectively about 10 per cent, six per cent and 3.5 per cent, Nigeria’s ratio is impressively below 1.5 per cent.”

     The MAN D-G, therefore, said achieving a full cashless economy should not be the pressing issue when there are tougher challenges of insecurity, exchange rate volatility, skyrocketing inflation, energy disruption, over bloated fiscal debt, dwindling foreign reserves, business collapses and daily divestments. However, the cash crisis wasn’t the only factor responsible for the underperformance of the manufacturing indicators in the quarter under review. High energy and transportation cost, lingering forex scarcity and continuous depreciation of the naira also left manufacturers bleeding and limited their capacity utilisation with the importation of non-locally produced critical input becoming a nightmare.

    There was a global energy crisis which began in the aftermath of the COVID-19 pandemic in 2021, with much of the globe including Nigeria facing shortages and increased prices in oil, gas and electricity markets. The crisis was caused by a variety of economic factors, including the rapid post-pandemic economic rebound that outpaced energy supply.

    The Consumer Price Index (CPI), which is the main economic indicator that tracks inflation rate and cost of living, also escalated. Manufacturers’ access to Foreign Exchange (forex) was also difficult, even as exorbitant and multiple taxes, high lending rates, persistent and pervasive insecurity, and the domino effects of the lingering Russia-Ukraine war took heavy toll on manufacturers’ operations.

    The abrupt removal of fuel subsidy towards the end of the second quarter of 2023 was also an issue, as it immediately led to a steep increase in fuel prices across the country by over 200 per cent. This, in turn, pushed up inflation and impacted businesses and households, with costs of transportation as well as basic food items well above the reach of many Nigerians.

     Ajayi-Kadir also said despite the recent unification of the forex windows by the current administration, the exorbitant premium that persists between the official and parallel exchange rates have further stalled manufacturing operations.

    With the unfavourable changes in the manufacturing indicators in Q2 ’23, the Aggregate Index Score (AIS) of MCCI declined to 52.7 points in the second quarter of 2023 from 54.1 points obtained in the first quarter of 2023. The index score of the current quarter, though below that of the previous quarter, indicates that manufacturers generally showed resilience and retained confidence in the economy.

    However, across sectoral groups, operators in Motor Vehicle and Miscellaneous Assembly with an index score of 46.7 exhibited further loss of confidence as they fell below the 50-point benchmark. These operators were adversely affected by the exorbitant new premium rate for motor insurance and the abrupt subsidy removal which significantly worsened sales performance and increased the consumer’s preference for fairly used vehicles as a result of low purchasing power. Similarly, among industrial zones, activities in Abuja (40), Rivers/Bayelsa (40.5), Cross-Rivers/Akwa-Ibom (45), Kano (46.2), Kaduna (47.8) and Oyo/Ondo/Ekiti/Osun (48.6) were depressed by the high-cost operating environment in the second quarter of 2023 as underlined by their index scores which fell below the benchmark points.

    Ajayi-Kadir said it is expedient that the government strives to ensure the harmonisation of fiscal and monetary policies that will pave the way for a stable macroeconomic environment needed to promote productivity in the manufacturing sector and improve the ease of doing business.

    “The abrupt removal of fuel subsidy without appropriate palliatives is already beginning to wane on the confidence of Nigerians in this new administration,” Ajayi-Kadir said, adding, “No CBN forex intervention will be effective without boosting the level of liquidity and transparency in the official forex window.”

     The MAN chief, however, noted that the introduction of the Forex Price Verification System Portal was laudable, pointing out that it will improve transparency.

    He said more needs to be done to increase the forex liquidity, especially by intensifying efforts to encourage the inflow of foreign investments, promoting export in productive industries as well as encouraging local sourcing and local patronage.

     These, according to him, require bridging the huge infrastructure gap, especially as it relates to customs, transport and power which are of utmost concern to the manufacturers; complete reformation of the power sector through the Electricity Act 2023 in order to end erratic supply of electricity. He also said boosting public-private investment in renewable energy, backward integration and local sourcing of raw materials in order to create a highly competitive and self-sufficient manufacturing industry have never been this compelling.  Ajayi-Kadir said: “No CBN forex intervention will be effective without boosting the level of liquidity and transparency in the official forex window.”

  • Manufacturers hold exhibition

    Manufacturers hold exhibition

    Manufacturers Association of Nigeria (MAN) are set to hold the seventh  Nigeria Manufacturing and Equipment (NME) Expo from November 21- 23, at the Federal Palace Hotel, Lagos.

    MAN said the expo, themed ‘Future of Manufacturing’ will be held in partnership with the Nigeria Raw Materials Exhibition (NIRAM Expo), designed to boost the country’s productive sector as well as guarantee the economy’s sustenance.

    The NME/NIRAM expo is the only regional event that brings the entire manufacturing and raw materials value chain together on one platform.

    It is West Africa’s only trade show focusing on the manufacturing value chain for the continent.

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    As the official manufacturing event for MAN and the Federal Ministry of Industry, Trade and Investment, the manufacturing platform will provide unprecedented opportunities and access to accelerate Africa’s industrialisation thereby achieving one of the objectives of the African Continental Free Trade Area (AfCFTA) agreement.

    Chairman, NME/NIRAM Organising Committee, Ambrose Oruche, quoted the Director- General of MAN, Segun Ajayi-Kadir, as saying: “There is no nation on earth that is considered wealthy or developed or prosperous that does not have a vibrant manufacturing sector”.

    Ajayi-Kadir noted that the manufacturing sector has the greatest capability to create jobs, revive the economy and set the path to development, adding that for this reason, governments all over the world incentivize manufacturing.

    Taking place in November 2023, NME EXPO – Nigeria Manufacturing and Equipment Exhibition & Conference will gather local and international companies to showcase and demonstrate new technologies, machinery, and equipment to enable African industries to invest and increase manufacturing output.

    RMRDC Director General Professor Hussaini Doko Ibrahim said: “To improve capacity utilization, RMRDC through the Nigeria Raw Materials Exhibition (NIRAM Expo) and other programmes, has been promoting new investments in local resources-based industries and encouraging existing industries to source their raw materials from within Nigeria”

    He noted that Africa is brimming with opportunities, particularly in the manufacturing sector, adding that current policy reforms of the

    Nigerian Government and other African governments in order to take advantage of AfCFTA promise significant benefits such as economic diversification, structural transformation, technological advancement, and job creation.

    The AfCFTA will create the largest free trade area in the world measured by the number of countries participating. The pact connects

    1.3 billion people across 55 countries with a combined Gross Domestic Product (GDP) valued at US$3.4 trillion.

    It has the potential to lift 30 million people out of extreme poverty, but achieving its full potential, according to the RMRDC boss, will depend on putting in place significant policy reforms and trade facilitation measures.

    The NME 2023 will connect its stakeholders with decision makers who are desirous of investing or building new manufacturing plants, procuring the latest innovations in machinery, equipment, and technology, and finding turnkey solutions to improve their existing production output.

    Exhibitors for this edition are expected to join 200+ other top manufacturing, industrial equipment, and raw materials sector organisations by reserving a space on West Africa’s premier marketplace for local buyers and sellers.

  • ‘Manufacturers bear multiple tax burdens’

    Afam Mallinson Ukatu, Managing Director/Chief Executive, NISPO Nigeria Limited, an indigenous tile manufacturing company. In this interview with Charles Okonji he speaks on the challenges of multiple taxation, rising energy cost, amongst other sundry issues. Excerpts:

    What motivated you to go into the production of tiles and other sanitary hardware?

    Life is like the five speed gear car, and most times we don’t use it, and why we don’t use it is because we think we don’t have the need, when the roads are rough, and sometimes you will not use it to go the place where you need to go.

    Going into manufacturing is not what I didn’t plan to do, though, it came up earlier than planned because of certain issues we do have in terms of clearing, in terms of shipping companies, in terms of other infrastructures that have not been put in place. Such as the situation today where it will take you up to three weeks to one month before you can clear your goods out of the harbor. And the cost of not just the clearing has gone up, but the cost of transportation has gone up from N70,000 where it used to be to take a container from the sea port (Tincan Island) or Apapa seaport to the same neighborhood of Lagos to between N350,000 – N450,000. It is obvious that the cost of local transport from one end to the same Lagos has gone up more than what you paid as freight from china to Nigeria. It is unbelievable. So all these issues and logistics are what we cannot just sit down and be looking at as if nothing is going wrong.  So, with that, our mind set become volatile that we have to do something different from what we used to do, which is the importation of tiles and other building materials. So, I thought of doing something better, that can create jobs, and that can put food on their tables. It was not easy going into manufacturing because that is why we are where we are today to see how we can get it done and get it done right.

    How many years have you put in production?

    The first year, we started with our plastic manufacturing, which is 13 years today, and we have been in tiles manufacturing for 10 years. We have also divested into pharmaceutical manufacturing. It means that it takes a little more time for us to achieve our objectives and our goals. So that is what the economy and infrastructure has pushed us to. The speed could have been faster than what it is today, but there is absolutely nothing we could do by staying aloof, though, we have not met up with the speed, but we are still moving.

    How were you able to build your brand into international repute?

    The first pilot plant we did on tiles was our own money. We started with our own pilot plant and we didn’t want to make it so big to enable us test run the factory with the manufacturing of tiles on a small note in the pilot plant. But while we were progressing, we needed to expand, so we approached commercial banks and we were given some loans, but the loans we got from commercial banks attracted very high interest rate which was close to thirty percent and we couldn’t do it. Luckily for us the Bank of Industry (BOI) had some intervention funds and we approached BOI and they bought our facilities over and gave us some intervention funds to expand our factory, and it was a good job done by BOI that they were able to rescue us, what could have been a collapse of our business. So, BOI did well in the aspect of the intervention given to us when we needed it most.

    How much was the facility from BOI?

    The intervention funds accessed from BOI was N1 billion, and we were able to secure the loan and we managed it to enable us pay back the facilities. We are again doing another expansion on the tiles factory, and BOI is still there for us and we are doing everything humanly possible to get it right.

    What are the challenges you faced while trying to build this business?

    The challenges we are facing in Nigeria are numerous, they are majorly the infrastructural problems, but the first is that of power. Power is the heart of manufacturing. If there is no power, there is nothing one can do to get to where you want to be. The next big problem we are facing is roads and another very bad tale that we can tell today that of the roads in Agbara industrial lay out. The roads are in a very deplorable condition, such that all the industries in that area that are paying taxes and numerous government levies are being neglected to a point that you keep wondering if the government really want this country to move ahead. So, this is the highest area that we are having issues. As a result of this, many manufacturers have been forced into looking at other areas of generating power for their production.

    What are your alternative power solutions?

    Our own type of manufacturing is a little different from other forms of manufacturing, because in tiles manufacturing, you need to have constant supply of power for 24 hours. It is not just 24 hours light that you will have, but you will be able to build up your furnace to a certain degrees before you start production. Obviously if we are running our generator today, on our natural gas, which we are using shell as our own source of gas supply. Absolutely, there is no way you can turn off your gas generation for one minute, which means that it has to be on for 364 days in a year.

    The worst of it all is that each time there is a short-down, it takes about 10 days to start production, and for those 10 days it will take before you re-start your production, you will be paying your bills. It takes 10 days because you need to heat up your furnace to the required temperature before you can start with your production. The simple example is that when you put on your iron to iron your cloth, you must wait for some minutes for the iron to heat up to enable you do the ironing. So you cannot just put on the furnace and start working immediately, you must allow it to heat to about 1240 degree, which will take between 8 – 10 days. Obviously, this is wastage to us. So, any time power is short in supply, or vandalisation of pipeline and the gas were shut-down, we are losing money, not just on the money we are paying to our workers for not working but also for losing like 10 day in one month, you can imagine the colossal waste of money due to the problem that is not caused by us. Though, we thank God that there have been improvement on gas supply lately as the government and Shell are trying to make sure that we would not be experiencing shortage in the gas supply.

    Also, even when they give us enough notice before they can shut-down for maintenance, we are still losing because it will take us 10 days to restart production.

    The ideal thing is for them to consider special factories like ours that cannot thrive without light, to see how they can take it up to compensate us when there is shut-down.

    How would you describe your experience with multiplicities of taxes that is prevalent in the manufacturing industry?

    If the government does not look into the issue of multiple taxations and harmonise it as quickly as possible, many more manufacturers would shut-down. The situation has deteriorated to the extent that tax authorities shut down factories because of tax default, but what I do ask them is that if you shut down a factory because they have not paid tax, and all their worker are on the street, where are they going to get money to pay the tax?

    Government should look into multiple taxation and vat. I have always agued which is also a known fact that taxes are being paid on your turnover, but what of a situation where a manufacturer is losing money. It is obvious that a manufacturer produces and still losses money and you are still expected to pay your tax. There should be a system whereby you are evaluated by the tax authorities just like China, USA and other countries. There is what they keep as special rebate for manufacturing companies, because this is what encourages people to go into manufacturing. Without manufacturing, there wouldn’t be any way to for high rate of unemployment to reduce. Government can only provide about 10 percent of the total job requirement of the population, manufacturing can generate over 60 – 70 percent of the needed employment.

    What advice do you have for new entrants into the tiles manufacturing business?

    I will encourage them to know that there is huge market for the product. There is no time that you would enter into this business that you will not make profit. It is a matter of being focused and determined. For instance I started with my pilot plant and my target was to produce 3,000 square meters, and we got some people who had been into tiles manufacturing to give us the technical know-how, when we started, the machines brought to us were unable to do what we expected, and we were produce between 1,800 – 2,000 square meters a day, which is contrary to our expectation, but we were able to break through with that, because there was no tiles manufacturer then, apart from the two that have been in existence in the past 20 years. So for that, the small ones were able to survive, while the big ones were still doing their business. So, I will encourage the young entrepreneurs coming up not to be afraid of what the future holds for them. The most important thing is that you have to work hard as an entrepreneur to be in the system, and one day, the opportunity would come for you to expand. Starting a business with huge amount of money is not the issue, because some people started big but could not make it while some others started with little, today; they are big employers of labour. So, the story of how much you started with or how much you are going to start with is just a mindset.

    What has the patronage been, in terms of buy made-in-Nigeria?

    When you have a good product, people come looking for you, no matter where the product is. Like I have always said that when you buy something you know where it is produced, you will have a testimony to give, and the testimony is that made in Nigeria products in some items are much of better higher quality than the imported items. We have instances of some products made in Nigeria that people prefer. So I will advise the local manufacturers to live up to expectations because as long as you have a name, you must protect that name. This is because when you sell a substandard product, the customers must surely come back to since they know where it is coming from. So, you must have to protect your name by doing the right thing and maintaining a high standard. The quality of made in Nigeria products have improved so much that quality control is the watch word of the manufacturers.

    Our stories would shock you. For instance, a customer brought some cartons to us to label our tiles made in Italy because of the quality, but we refused, because we want to promote the quality of made in Nigeria products, to enable us sell it in other West African countries. We have exported to Ghana, Cameroon, Senegal, Lomé, Republic of Benin and a host of others. So it is absolutely impossible for us to label our product made in Italy, which would be giving credit to other nations on our own expense. If our quality is not as good as it is, nobody would have been tempted to ask us to label our goods made in Italy.

    The second one is that someone bought some tiles from us and added some extra square meters to augment the anticipated brakeage, but he returned the 20 square meters which he had earlier budgeted to for replacement of damages. What this means is that our product is more resistant to breakages as it is manufactured to suit the Nigerian environment. So, this is what the customer said he has been doing whenever he bought imported items, but he brought back 20 cartons to us as he did not record a single damage. This means that what we are doing is right and the product is right.

    But one of our major challenges is that transportation for the West African cost is not well connected. That is why we are unable to do much export because the cost of transportation to countries like Kenya is more than what they are getting from China. This is because there is no availability of vessels going straight from Nigeria to Kenyan. There is no ocean liner that is plying the West African sub-region, and even the African sub-region, so, how do you expect the prices to be the same? For instance, for you to ship goods to Ghana, the ship would have to go to South Africa, before coming to Ghana, you can imagine the cost and time involved.

  • Nigerian Braiding Manufacturers to resume soon

    THE Asset Management Corporation of Nigeria (AMCON) at the weekend assured that Nigerian Braiding Manufacturers Limited (NBML), a Kano State-based textile company it took over, will soon resume operations.

    It said the company was taken over because of its non-performing loans purchased from local lenders.

    The textile company’s indebtedness to the AMCON stands at over N1 billion. This is despite numerous overtures by AMCON for amicable resolution of the debt to which the company and its promoters have remained nonchalant over the years, leaving the corporation with no choice than to seek justice in court.

    AMCON’s Head of Corporate Communications, Mr. Jude Nwauzor, said the corporation confirmed that in line with the provisions of the AMCON Act, 2010 (as amended), it has approached the court and secured an order enabling it to take possession of the company through its Receiver Manager, Dr. Yakubu Fobur under whose supervision it is billed to resume full production soon.

    He said in contrast to the rumours making the round, AMCON was set up to facilitate resolution of Non-performing Loans in the Banking Industry with a view to stabilising the economy; as such, it is dedicated to ensuring that the NBML remains in operation under the management of the Receiver Manager and his team of experts who are expected to work closely with the promoters of the company to ensure that it returns to profitability within a short period.

    This strategy would guarantee security of the large number of direct and indirect jobs provided by the company, while efforts continue towards a definite resolution option.

  • Manufacturers back Fed Govt on AfCFTA

    The Manufacturers Association of Nigeria (MAN) has backed the Federal Government’s move not to sign the African Continental Free Trade Area Agreement (AfCFTA).

    It insisted that government should ensure that the economic interests are projected and protected in arriving at the decision to sign or not to sign, or when to sign.

    The association, in its “2019 Economic Outlook” said as a necessary part of the readiness assessment and the resulting action plan, the government should put in place the necessary framework to protect and boost the manufacturing sector’s capacity to thrive in the continental free trade area .

    MAN in the review recommended measures the government should take to achieve sustainable economic growth and budgetary objectives of the fiscal proposals for next year. For instance, it urged the government to revisit the 2019 budget assumptions, particularly crude oil production and price.

    “The crude oil price has a $60 per barrel benchmark, while oil production has a 2.3 million barrel per day projection. These assumptions should be revisited to reflect the present economic realities,” the Association said.

    In the review released in Lagos during the week, MAN also recommended that government should ensure an upward review of education and health allocations before appropriation.

    It also called for caution in the country’s rising debt profile in view of the associated services charges and future economic burden that it would exert on the nation.

    The Association urged on cutting down on recurrent expenditures to reduce fiscal deficit, borrowing and service charges. It also canvassed shedding the current borrowing size of the government in the domestic financial market so as not to completely crowd-out the private sector.

    MAN also called for the commencement of the implementation of the harmonised taxes and levies and allow the Joint Tax Board (JTB) monitor and enforce compliance by states and local governments.

    It said the government should be more interested in result-oriented spending with frugality, be more transparent and accountable in order to assuage the psychology of taxpayers for improved tax compliance.

    Man also urged the government to re-classify the manufacturing sector into strategic gas users from the current commercial gas user’s classification.

    The association urged the government to continue to entrench better foreign exchange rate management while allocation should tilt more to the industrial sector, including the Small and Medium Enterprises (SMEs).

    It also urged the government to fast-track the development of key selected mineral resources through backward integration, especially those with high inter-industry linkages.

    “Government should continue to support the resource-based industrialisation and backward integration in the country through appropriate incentives and funding support to investors,” it said.

    MAN further urged the government to expand the tax net to capture the non-tax-paying firms, particularly those operating in the informal sector and not increase the tax burden on the already tax compliant businesses.

    It, however, acknowledged the government’s recognition of the need to develop a digital economy and the fourth industrial revolution in order to enhance productivity.

    The Association, however, said the safety nets were not captured in the budget proposal nor in President Muhammadu Buhari’s budget speech.