The stage appears set for the revamping of the manufacturing sector to drive economic recovery and create jobs. If robust recommendations and practical solutions proffered at the recently-concluded Nigeria Manufacturers Summit in Abuja, with the theme “Rethinking Manufacturing” are diligently implemented, a new dawn of enhanced efficiency and competitiveness beckons on the sector and its allied sub-sectors, particularly the agricultural and livestock sector. One of the Summit’s participants and Managing Director of FACCO West Africa Limited, poultry and agricultural equipment company, Femi Adelayo, personified this optimism, describing the Summit as “a timely and much-needed intervention for the manufacturing sector.” Assistant Editor CHIKODI OKEREOCHA looks at how its outcome will rub off on the poultry equipment sub-sector of the agriculture industry.
Nothing will gladden the heart of the Managing Director of FACCO West Africa Limited, a poultry and agricultural equipment company, Femi Adelayo, than to see a sufficiently galvanised poultry and livestock value chain in Nigeria capable of delivering immense benefits to all stakeholders while also playing a significant role in the Federal Government’s renewed push to position manufacturing and its allied sub-sectors to reboot the economy and create jobs.
However, Adelayo’s hope and expectation that a revitalised poultry equipment sector of Nigeria’s poultry and agriculture industry will lead this charge is predicated on the diligent and successful implementation of the robust recommendations and actionable roadmap and policy framework articulated for the manufacturing sector’s revamp at the recently-concluded Nigerian Manufacturers Summit in Abuja, the Federal Capital Territory.
On the behest of the Manufacturers’ Association of Nigeria (MAN), the Nigeria Manufacturers Summit was held in the State House Banquet Hall, Abuja. The summit with the theme “Rethinking Manufacturing” was hosted in collaboration with the Presidency; Federal Ministry of Industry, Trade and Investment; National Institute for Policy and Strategic Studies and multinational professional services company Ernst and Young.
The three-day summit, according to MAN Director-General, Segun Ajayi-Kadir, brought together relevant government ministries, departments and agencies (MDAs), multilateral and development partners, regional institutions, corporate entities, subject matter experts and manufacturers across all sectors to proffer practical solutions to the myriad of challenges limiting the manufacturing sector’s performance.
The engagement provided valuable insights on the policy direction for a sector widely acknowledged as holding prospects of driving the President Bola Tinubu-led administration’s Renewed Hope agenda. It also lived to its billing of reaching a consensus with the Federal Government on the imperatives for intentional development of manufacturing in Nigeria and the crafting of a strategic roadmap for the resolution of the sector’s identified challenges.
For instance, the Federal Government, on the strength of the Summit, renewed its call on MDAs and manufacturers to prioritise local content and made-in-Nigeria goods. Vice-President Kashim Shettima, who declared the Summit open, specifically called for the prioritisation of local content and promotion of made-in-Nigeria products, noting that Executive Order 003, which makes the patronage of locally manufactured products mandatory, is still in force.
“Let us be reminded that we cannot achieve significant progress in our drive for industrialisation unless we deliberately promote the production of capital goods. We must be focused on expanding our production base, prioritizing local content, and promoting made-in-Nigeria products.
“I assure you that Executive Order No 003 – Support for Local Content in Public Procurement by the Federal Government, which mandates the patronage of locally manufactured products is still in effect. The relevant MDAs are mandated to fully comply with the order,” the Vice-President declared.
He also went a notch higher, imploring manufacturers and businesses to leverage the summit to develop an actionable roadmap and policy framework, ready for immediate implementation, “to create the changes we want in the manufacturing sector.” Shettima also assured that government will always maintain an open-door policy to accommodate manufacturers’ needs and expectations.
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The Vice-President, who chairs the National Economic Council (NEC), said Nigeria has no better option than to support its indigenous firms to produce locally and increase their capabilities. He, therefore, reiterated the Federal Government’s commitment to partnering MAN to move the sector forward via speedy implementation of the roadmap to revamp the manufacturing sector.
Apparently drawing strength from the summit’s robust and engaging discussions and insightful presentations, including the Federal Government’s renewed commitment to put the sector on the recovery path, Adelayo, who was a participant at the summit, is now impatient, literarily, to see government and other relevant stakeholders make good their promise to successfully implement the summit’s recommendations.
“I look forward to the successful implementation of the strategies and would be glad to be an active part in this, Adelayo whose company boasts over four decades in the Nigerian agricultural and livestock sector, told The Nation, in his review of the outcome of the Summit. While describing the Summit as “Clearly a timely and much needed intervention for the manufacturing sector,” he pointed out that it offered strategic input to revitalise the economy and create jobs.
Adelayo admitted that in truth, there are really no quick interventions to long term strategic problems in the manufacturing sector and its allied sub-sectors, which, according to him, have been allowed to fester over a long time. He, however, noted that some of the recent policy guidelines are clearly steps in the right direction, from the keynote speakers’ input on the urgent need to stem the decline of the economy to the charge to increase the manufacturing sector’s contribution to Nigeria’s GDP.
Others, according to him, include the interventions of the focus groups across the pillars of trade, ease of doing business, patronage and protection of Nigerian companies. “There is also the impact of security, availability of affordable and constant electricity supply and the twin challenges of finance and foreign exchange; the summit clearly charts strategic way forward for the much needed development of the country,” Adelayo added.
The FACCO West Africa MD also said it was refreshing to see the active involvement of the Federal Government in the Summit and its willingness to engage with the players to develop the various economic sectors. He, however, pointed out that as a valuable player in the agricultural and livestock automation and mechanization sector with focus on grain storage and processing, poultry and livestock turnkey solutions, it would gladden his heart to see the sub-sector’s multifaceted challenges addressed.
Adelayo identified one of the critical challenges holding down FACCO West Africa Limited and other major players in the supply, installation, maintenance and after sales support of poultry and agricultural equipment space from maximizing their full potential as unaffordable and unavailable electricity supply. This, he said, affects the cost of doing business, which ultimately, makes it increasingly difficult for operators to become competitive.
He also told The Nation that operators in the poultry equipment supply market have been dealing with low quality equipment flooding the Nigerian market. “While they (low quality equipment) seem cheaper in the short term, the cost to the farmer in the longer term is often a higher burden on their businesses,” he lamented, adding that inconsistent government policies are also pain in the neck.
The Nation learnt that with a focus on quality equipment for the agricultural and livestock sector, as well as products for animal feed and nutrition, FACCO West Africa offers a multiplicity of products and services, including turnkey solutions for livestock, design and consultancy, grain storage and silos, mobile grain dryers, tractors, harvesters and other agricultural machinery.
“We offer turnkey solution services across the poultry and livestock value chain, offering adaptable, sustainable and profit-driven solutions from conceptualization to design, facilitation, construction, operation and maintenance,” Adelayo stated, adding that the company’s wide range of equipment and solutions are adaptable in every region, offering quality solution, efficient service and valuable experience for the growth of the business of its partners and clients.
He, however, lamented that its operations are being negatively impacted by government’s policy inconsistencies, which, according to him, come up in different places such as customs tariffs, policies on equipment and machinery, bottlenecks evident in logistics and other processes involved in shipping and logistics.
That’s not all. The asphyxiating high cost of finance as well as the challenges with Foreign Exchange (forex) is also a pain point, not only for FACCO West Africa but manufacturers across sectors. He pointed out that with the fluctuating value of the naira, the cost of spare parts for machinery as well as importation of critical raw materials and machinery has been quite challenging.
Incidentally, Adelayo is not alone in his lamentation over the stifling high cost of funds for manufacturers, for instance. The President of Dangote Industries Limited, Alhaji Aliko Dangote, also echoed manufacturers’ collective frustration over the prevailing high cost of bank loans when, during the Summit, he said manufacturers and businesses cannot cope with the Central Bank of Nigeria (CBN’s) current 30 per cent interest rate.
Dangote, who delivered a keynote speech at the opening of the Summit, did not mince words when he warned that “Nobody can create jobs with an interest rate of 30 per cent. No growth will happen.” He also decried the country’s penchant for importation of goods and services, saying it is a harbinger of poverty. “Import dependence is equivalent to importing poverty and exporting jobs. No power, no growth, no prosperity. Similarly, no affordable financing, no growth, no prosperity,” he kicked.
The renowned industrialist, while insisting that there is no industrialisation without protection, said ignoring these facts is what gives rise to insecurity, banditry, kidnapping and abject poverty. He, however, expressed optimism that Nigeria has all it takes to develop and sustain a globally competitive manufacturing sector.
“To do so, we must rethink our industrialisation policy. We must look to leading countries in the West and the East who are protecting their domestic. We must similarly, introduce policies to protect our domestic industries and nurture them into home champions that will create the jobs and prosperity we desperately need. The time to rethink our industrial policy is now,” Dangote said.
Adelayo is no less optimistic, citing recent policy guidelines such as the reduction of tariffs, the tax consolidation policies and other strategic interventions as reasons to be hopeful. “The availability of grains at affordable prices especially maize; this feed grade maize will reduce the pressure on the maize market, reduce the skyrocketing prices and thereby reducing the prices of eggs, chicken, fish and other protein sources,” he said.
He, however, said he believes that considering export tariffs increase on raw materials that are not in adequate supply is a quick intervention. “It is difficult where there is a scarcity of a material like Soya bean meal (an important protein source in animal feed) while it is been exported thereby exacerbating the food security crisis,” Adelayo said.
He listed other interventions that could force a rebound of the agricultural and livestock automation and mechanisation sector and by extension, the economy to include government patronage for building, repairing and utilising grain storage reserves, constant and affordable power supply.
Adelayo also harped on the need to retool the nation’s educational curriculum for there to be available manpower; access to grants, extension of strategic duty waivers as well as policy consistency to enable manufacturers and other businesses plan.
It is easy to see why the FACCO West Africa boss and other players are desirous of a virile poultry and livestock value chain in Nigeria. For instance, in Africa, Nigeria holds a crucial position in the poultry market, with an annual production volume put at 454,000 metric tons of poultry meat and 640,000 metric tons of eggs. The country currently ranks second in Africa in terms of poultry production, behind Morocco.
Poultry remains the fastest-growing sub-sector of Nigeria’s agricultural sector. The industry is valued at $4.2 billion and contributes 25 per cent of Nigeria’s agricultural Gross Domestic Product (GDP). The sub-sector is said to be responsible for between six per cent and eight per cent of the country’s total GDP and provides over 25 million jobs. The consumption of poultry products reached $2 billion in 2019 alone.
Globally, the poultry market is also huge, valued at $322.55 billion in 2021. The sector is expected to grow to $422.97 billion by 2025, driven by increasing stability in the global economy post-2020 pandemic and advancements in global poultry technology. The global poultry meat production currently stands at 140 million metric tons, while egg production is at 86.3 million metric tons.
With a rich blend of local and foreign suppliers of poultry equipment, FACCO West Africa Limited, according to Adelayo, is well-positioned to corner a substantial share of the poultry equipment market in Nigeria, driven by its huge investments, over the years, in highly industrialised and efficient manufacturing process. He said the company is the most innovative and environmentally compatible among manufacturers within the industry.
