The recent Federal Government’s Executive Order directing MDAs to grant preference to local manufacturers in their procurement of goods and services, observers say, could have far-reaching positive outcome for manufacturers and the economy, Assistant Editor OKWY IROEGBU-CHIKEZIE writes.
It is encouraging to note that the Federal Government is currently working on plans to promote the production and consumption of local products. Aside providing solutions to the unemployment problem in the country, encouraging the production and consumption of local products could usher the country into the path of the much desired economic prosperity. This is the secret behind the rising profiles of the now prosperous Asian tigers. Nigeria’s ability to achieve similar feat will depend on her capacity to harness human and material resources towards the promotion of made-in-Nigeria goods that can compete in both local and international markets.
The time has come for the country to encourage the development of local industries in the country as a way of promoting the patronage of locally made goods and products. The country’s reliance on crude oil as the primary export commodity and foreign exchange earner has, no doubt, worsened the situation of local industries in the country.
Fortunately, Nigeria has an amazing advantage in our size. Conservatively, the country’s population is put at over 175 million. It is variously touted that out of every five blacks, four are Nigerians. Our population is therefore a major source of strength and it behoves on us as a nation to leverage on this factor to promote the Nigerian brand in terms of products and services as this remains the only means through which sustainable employment can be guaranteed. Nigeria is in a position to play a strong continental and global role because it benefits from a large population of energetic, educated and entreprising people, as well as from an abundance of natural resources.
Industry players agree that for local goods to enjoy sufficient patronage from local consumers, there is need for the National Assembly to come up with a local patronage bill that would ensure that made-in-Nigeria goods and local producers are protected.
They lamented that a situation where Nigerians depend solely on imported goods is unhealthy for the nation’s economy and that the idea of patronising made-in-Nigeria goods should be encouraged and viewed as a call for a nationwide partnership to develop the kind of collective commerce pattern that would have a positive bearing on national development.
Government position
Minister of State, Industry, Trade & Investment, Mrs. Aisha Abubakar, said the nation’s abundant natural resources can only be relevant when exploited, lamenting that though we have abundant natural resources, they’ve not been adequately deployed to benefit the citizenry. She called for a holistic overhaul of our importation policy to discourage items that can be manufactured locally.
Speaking on the ‘campaign for patronage of made-in-Nigeria products and services’, she said the inward looking initiative of the administration is expected to boost the nation’s economy, by reviving the local industries to produce quality products of international standards. She said the nation has comparative advantage in textile, furniture, food and drinks, as well as leather and its bye products, saying if exploited, this will lead to generation of massive employment, boosts the culture and tourism sector, create wealth, reduce poverty and increase the foreign exchange earnings’ capacity of the country.
Mrs. Abubakar said: “The promotion of made-in-Nigeria products and services will also stimulate growth and promote innovation in our Medium Small & Micro Enterprises (MSMEs). In addition, it will boost financial inclusion and overall security of the country, two key elements essential for sustained economic prosperity and development.”
She said the Federal Government has set in motion plans to translate MSME’s into bigger platforms, stating that although many of the operators are small, they are churning out quality products. She said they have not only improved their quality and standards, but also packaging over time. Mrs. Abubakar said government is prepared to group the small businesses into clusters, boost them financially and also offer advisory services in the areas of marketing.
Minister of Information & Culture, Alhaji Lai Mohammed, said the ‘Executive Order’ is expected to boost the patronage of locally produced goods and services, saying the new procurement policy makes it compulsory for MDAs to patronise locally made goods. He encouraged manufacturers to continuously work to improve their goods quality and also deploy Information technology in marketing their products.
Also the Lagos State Governor, Akinwunmi Ambode said the citizenry’s unchecked alure for foreign goods and services brought the country to its current situation. He urged the federal government on the need to stimulate export and encourage the consumption of locally produced goods with innovative policies. While commending the ‘Executive Order’ and the need to have policies that will stimulate locally made products, Ambode said the state’s partnership with Kebbi State in rice production, has resulted in sharp drop on rice importation and the conservation of the nation’s foreign exchange.
He said: “As a state, we have encouraged the growth of several MSMEs through various capacity & empowering programmes, in addition to ensuring supportive investment matching of small businesses in the state. This has encouraged employment generation and wealth creation for entrepreneurs in the state. Our belief is that the nation cannot grow sustainably, except non oil export is encouraged”.
Director-General, Raw Materials Research and Development Council (RMRDC), Dr. Hussaini Doko Ibrahim, said the Council primarily serves the interest of the Organised Private Sector (OPS), especially the MSMEs, which form the bulk of resource-based manufacturing in the nation. He said the Economic Recovery and Growth Plan (ERGP) of the Federal Government is based on optimising the use of local content in empowering local businesses.
Ibrahim said RMRDC is committed to providing opportunities for synergy among stakeholders in the raw materials value chain, aimed at enhancing sourcing of local raw materials for manufacturing.
He said: “We have to showcase available industrial raw materials in the country, as well as the efforts of our scientists, technologists, engineers and fabricators in raw materials production, processing and utilisation for the benefit of the manufacturing sector of the economy,” saying more than ever before, it is now possible for industries to secure high quality starch, glucose syrups and extracts, fruit juice concentrates, besides creating a platform for highlighting the challenges to local sourcing of gypsum as cement industries now source it from local miners.
The RMRDC boss decried the poor linkage between the researches, prospective investors and entrepreneurs to commercialise these innovations.
On how to address the challenge, Ibrahim canvassed the need for manufacturers to get involved in Research & Development (R&D) for the development of local raw material substitutes to imported ones, new technologies in raw materials processing, or new products development for the local market.
He urged manufacturers to venture into R & D so as to stimulate the sector and also take advantage of the incentivised tax laws for the manufacturing sector.
Private sector thinking
Managing Director, Automacs Nig Limited, manufacturers of cars and Industrial filters, Obiora Ogonsiegbe, said his organisation is in support of plans by the Federal Government to discourage the importation of certain items the country has the potential of producing locally. He said: “We need to embrace attitudinal, structural, and cultural change that would enable major stakeholders to modify their outlook towards made-in-Nigeria goods. In our drive towards a varied and dependable economy, it is vital that we build internal structures that will establish it as an independent commercial hub wherein our position will be strengthened in the course of international collaborations and our negotiation powers leveraged by a culture of home-grown technical expertise”.
He urged government on the need to implement extensively the ‘Executive Order’ noting that made-in-Nigeria goods will boost the nation’s manufacturing sector and by extension create more jobs. According to him it is through this that indigenous firms can take advantage of bigger markets at regional, continental and global levels. It is important for the country to appreciate its fundamental dynamics by making policies that will ensure sustainable economic development. He added that advocating and supporting made- in -Nigeria goods is a sure way to turn around our dwindling economic fortune.
He advised Nigerians on the need to encourage indigenous entrepreneurs by patronizing locally produced goods and services. Reiterating his conviction on the need to develop and transform local industries, he said: “There is no country that has managed to transform itself without adequate industrial growth or wholesome dependence on imported goods. Therefore, we need to empower local industries, and this could only be done by embracing locally made goods. Recent giant strides in the cement industry have sufficiently demonstrated that local industries could act as catalysts for economic growth if only the needed impetus for growth and development are put in place”.
He called on the Bank of Industry (BOI) to intensify efforts on her support for the Small & Medium Enterprises (SMEs) with more robust products without stringent conditions. He further canvassed for more banks and financial institutions to buy into the ‘made –in-Nigeria’ vision in order to ensure enhanced and sustainable industrial growth in the country.
On the draw backs for the realisation of the ‘Executive Order’, he stated that it is the all important question of stable power supply. He said: “Presently, the power situation in the country is epileptic and, nobody would be encouraged to venture into local entrepreneurship in view of the high cost of sustaining alternative power source. It is not enough that the power sector has been deregulated to encourage private investors, much still need to be done for us to have a reliable power sector that could drive the local industries”.
He advised that there are immense benefits in supporting and embracing locally made goods as it remains one of the sure ways to fully realise our potential as a nation and possibly one possible way out of the current economic dependency and poverty.
Managing Director Nestle Nig Plc, Mr. Mauricio Alarcon have said that their backward integration policy and the use of more familiar and common ingredients has not only improved the nutritional profile of their products but also has built the nation’s local economies. He said they have over 4,000 farmers.
At the launch of their new variant of their seasoning called Maggi Naija Pot in Sagamu, Ogun State, he said the new seasoning helps families cook better-tasting wholesome Southern dishes with less effort while delivering the delicious’ bottom of the pot taste ‘. He said the raw material used is 80 per cent locally sourced which has helped them in their factory expansion.
He said: “Most consumers want minimal processes but desire adequate nutritional needs from any purchased products. With that in mind we fortified our Maggi Naija pot with iodine and other essential nutrients. We have further trained over 1,600 farmers in local technology using soya beans with over 7,000 local Maggi traders. In doing this we have not only increased our capacity but is also creating wealth.”
Advocacy groups & multi-lateral agencies
The Lagos Chamber of Commerce & Industry (LCCI) in their remarks commended the Executive Orders signed into law by the then Acting President, Prof. Yemi Osinbajo, geared towards changing the ways government business and operations are conducted.
In a statement former LCCI President, Mrs. Nike Akande, maintained that the three main pillars of the executive orders namely promotion of transparency and efficiency in the business environment, support for local contents in public procurement by the Federal Government, and efficient operation and implementation of the federal budget, have been key focus areas of LCCI advocacy campaign over the last few years.
She argued that the executive orders will impact the ease of doing business, fast-track budgetary administration as well as promote made in Nigeria products. She urged the government to ensure that stipulated timelines are strictly adhered to by all the parties affected by the order.
She further asked for continued consultations and engagement with the business community and the bureaucracy in building understanding and buy-in of all stakeholders.
She pledged the preparedness of the advocacy group to track the compliance with these orders by relevant Ministries Departments and Agencies (MDAs) with follow up compliance and report outcomes and feedback from private sector players on an ongoing basis.
Urging government to support Micro Small & Medium Enterprises (MSMEs) in her bid to ensure the success of the ‘Executive Order’, Akande asked government to rekindle efforts at reviving growth in the non-oil sector which she described as a guarantee for a more sustainable growth beyond the volatility of oil prices in the international market.
She said: “This opinion was confirmed in the World Bank report that opined that in the 1960s, Nigeria was a major producer of palm oil, cocoa and rubber and agricultural exports generated about 75 per cent of its foreign earnings. Taking a cue from its history, agriculture is again expected to play an important role in Nigeria’s growth story.”
Akande said MSMEs have challenges stalling their growth ranging from lack of appropriate bankable business plans, competitive marketing strategies, standard accounting systems and dearth of technical abilities.
However, she expressed the belief that Nigerian entrepreneurs were resourceful and have the capacity to aid the economic recovery process.
She said: “There is need for a stable policy and regulatory environment that supports the reforms on the ease of doing business in Nigeria. Issues of taxation, trade and foreign exchange policies should be managed in line with international best practices. This should consider policies that facilitate trade, attract foreign investment and protect businesses from avoidable regulatory pressures.”
For the Country Director, United Nations Information Center (UNIC) Ronald Kayanja, efforts driven at inclusive socioeconomic growth may not yield desired results without institutional support for Micro, Small and Medium Enterprises (MSMEs). He said businesses within the cadre efficiently respond to immediate societal needs and contribute a significant quota to income generation as well as poverty alleviation, particularly in rural communities.
He urged policy makers and finance groups to help materialise the sustainable development goals of eliminating poverty and hunger, through expansion of finance portals with flexible modalities for MSMEs.
“Although MSMEs generate the most new jobs, they face many challenges which access to finance is often cited as primary obstacle. Financing constraints are also magnified for informal firms which tend to be small in size by contribute significantly to economic activity. The banking institution and the financial sector in general should create a tailor-made intervention for MSMEs to get funds. They need to be encouraged as they are keys to inclusive sustainable development,” he said.
Lagos State Coordinator, Small &Medium Enterprises Development Agency of Nigeria(SMEDAN)Coordinator, Mr. Yinka Fiicher stressed the need for the government to engage in critical infrastructural development concurrently with the course of easing business environment, describing it as cardinal for productive economy.
He said SMEDAN has earnestly empowered fresh entrepreneurs in the country through its Industrial Training Centres (ITC), revealing various technologies are made available for advancing vocational and technical knowledge
President, Manufacturer’s Association of Nigeria (MAN), Dr. Franks Udemba Jacob hailed government’s decision and efforts at pulling the economy out of recession. While commending the Economic Recovery and Growth Plan (ERGP) and the ‘Executive Order’ aimed at deepening the diversification and backward integration of the economy, he also commended the establishment of the Presidential Enabling Business Environment Council (PEBEC) with the mandate to improve the Ease of Doing Business (EOBD). He stated that it will among other things enhance productivity and overall performance in the manufacturing sector.
Commending the government actions further, Jacob revealed that an assessment and verification of the performance score card of the Presidential Enabling Business Environment Council (PEBEC) and the 60-Day National Action Plan showed that 70 per cent of its 7 points objective modeled after the World Bank Indices of Ease of Doing Business (EODB) has been achieved within the set timeline.
He said: “The Council scored above 60 per cent performance on six objectives and only one recorded a low score of 33 per cent. Overall, the performance of the Council is an indicator of other developments that would come from the Council. We are hopeful that the processes and procedures required to fully actualize these objectives would be effectively implemented so as to permanently remove constraints to the EODB and improve the global ranking of Nigeria by the World Bank”.
Udemba advised the government to sustain and consolidate all the achievements recorded within this short period by removing all trade facilitation constraints and attract foreign capital inflow to the country.
He also cautioned that government should also ensure that other aspects of the objectives that are currently Work-In-Progress are properly implemented with a view to improving Nigeria’s competitiveness. He pledged the preparedness of the Organised Private Sector (OPS) to continue to encourage her members and other investors to take advantage of the various initiatives to increase their investments.
He however, pointed out that to enable the private sector to effectively key-in and benefit from an over-all lower cost business environment, there is the need for the government to expand the scope of the programme and take cognisance of other constraints to businesses.
On the constraints to businesses, Udemba said they include but not limited to the cumbersome procedures and exorbitant administrative charges of regulatory agencies, harmonise multiple taxes and levies across the three tiers of government and to encourage ministries, departments and agencies (MDA’s).
Others are to deepen the existing reforms by including indices that will effectively enforce the reduction in the cost of doing business, develop other easily verifiable platforms for the simplified VISA on arrival programme. He regretted that what is currently available is just an e-mail address which is not sufficient for effective performance evaluation.
The MAN boss also asked for the expansion of the set objectives under “getting electricity” to include those that would address the challenges of electricity inadequacy, improper pricing and metering and the need to examine the performance level of the special funding windows provided by government for businesses with a view to addressing the current poor access to credit.
He further asked for the elimination of all forms of road blocks set up by commissioned revenue collection agents of government in active connivance with security agencies on the highways, improve on the websites that are currently not operator-friendly and make them more interactive. He implored government institutions such as Transmission Company of Nigeria (TCN), GENCOs and Nigerian Electricity Regulatory Commission (NERC) to resolve the dispute between manufacturers and the Distribution Companies (Discos) to avert the failure of the Nigeria Electricity Supply Industry.
Finally, he called for the review and effective monitoring of the implementation of all activities under “trading across borders” which he said operators have confirmed is yet to be implemented.
