•We urge more government’s assistance to local manufacturers for better result
The results are not yet obvious and the intended impact yet to manifest. But it is undeniable that slow but steady progress is being made as regards the efforts of the President Muhammadu Buhari administration to diversify and revitalise the fragile economy it inherited, tackle poverty, generate employment and boost economic growth. Of course an instantaneous resolution of the economic challenges the government is currently grappling with would have been most desirable. But that is hardly feasible except through government by magic, an illusionary aspiration.
Truth is, the depth of economic rot bequeathed to the All Progressives Congress (APC) administration by the Peoples Democratic Party (PDP) Federal Government in 2015 was monumental. The humongous earnings from oil sales in the preceding five years had been squandered with the situation worsened by the breathtaking corruption witnessed under the Dr. Goodluck Jonathan administration. Happily, the government has roused itself from its initial policy inertia and tentativeness and has been steering the nation along the path of aggressive economic diversification to break the dependency on oil as well as achieve higher agricultural and local manufacturing productivity.
One indication that policy initiatives in this respect are gradually budding and beginning to bear fruit was the inauguration by the Vice President, Professor Yemi Osinbajo, of the Meter Box and other Plastics Factory owned by Mojec International Limited, an indigenous meter manufacturer. Local Nigerian manufacturers will certainly be delighted by Professor Osinbajo’s announcement on the occasion that plans are afoot by the Federal Government to make loans available to them at single digit interest rates in order to facilitate economic recovery and boost the country’s Gross Domestic Product (GDP).
Emphasising that the loan arrangement being worked out would attract a very low rate, Osinbajo said this would not only stimulate greater productivity on the part of domestic manufacturers but also help to mitigate the scourge of unemployment in the country. It is obvious that the subsisting double digit interest rate makes it virtually impossible for local manufacturers to operate profitably or compete favourably with cheaper and, most times more qualitative foreign imports. Things are unlikely to improve with the CBN’s Monetary Policy Committee (MPC) indicating that it may soon hike interest rate from the 14% that had been maintained since September last year.
It is against this backdrop that the Federal Government’s proposed initiative is welcome. However, cognisance must be taken of the fact that there have been several such interventions in the past to boost investment in key economic sectors, including textiles, aviation, the auto industry and Nollywood, as well as enhance agricultural productivity in products like rice and wheat, with little to show for these.
We advise that a thorough audit and impact assessment of such past interventions be undertaken with a view to identifying and eliminating weaknesses and loopholes in implementation. For instance, it is alleged that when funds have been made available by government for agricultural loans at single digit rates, unscrupulous bankers still lend out the money at higher rates than stipulated by law and cream off the difference.
As Professor Osinbajo restated, a fundamental change in attitude, both on the part of indigenous businesses and Nigerians as a whole is critical for rapid economic recovery and development. On its part, the Federal Government has taken commendable steps to boost local manufacturing through, for instance, Executive Orders directing Ministries Departments and Agencies (MDAs) to give preference to local manufacturers in their procurement of goods and services, as well as instructing all procuring authorities in the areas of science, engineering and technology to give preference to Nigerian companies and firms in the award of contracts. These measures can only have the desired effects, however, if Nigerians curb their addiction to foreign imports and begin to patronise local products. It is also incumbent on local manufacturers and businesses to continuously improve the quality of their products and services.