Nigeria’s industrial future still hazy as policy, cross-border issues mar sector

The future of Nigeria’s industrial sector is still unclear, as policy inconsistencies and somersaults  persist even into the administration of President Muhammadu Buhari.

Apart from policy, the country’s industrial sector is facing some cross-border challenges which have ensured the sector does not become virile to compete with peers across the world.

“Policy somersaults do not augur well for industrialisation,” said Frank Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN).  “A situation where one government makes a good policy and another one says it will not carry on with it, is not good for the manufacturing sector,” Jacobs said, at the just concluded MAN Expo held in Lagos. 

BusinessDay gathered that the present administration is not comfortable with some of the policies of the immediate past administration on the iron and steel sector and has already rejected them.

The immediate past administration brought in policies like waivers to help primary and secondary producers of certain items like hot and cold rolled steel coils, which cannot be produced locally.

That administration also initiated long-term plans on the development of mining-to-industries value chain, as well as time lag, under which certain items would be imported until the country attains self-sufficiency in them.

But the present government has rejected some of these policies, BusinessDay gathered.

Similarly, some rice producers were brought together by the immediate past administration and given some waivers to import the difference between domestic production and national demand, to ensure there is no room for scarcity and smuggling.

However, some of the rice investors were taken aback, when the new administration came on board and opened the borders for rice importation.

Though, the foreign exchange policy has made it difficult to import rice, investors demand more from the government.

Sani Dangote, president of the Nigerian Agribusiness Group (NABG) and group vice president of Dangote Industries Limited, told BusinessDay recently that the major challenge has been that government is trying to mix backward integration and importation, two of which cannot go together.

Reginald Odia, chairman, Electronics and Electrical Group of the Manufacturers Association of Nigeria (MAN), said manufacturing can only do well, when policies are consistent and incorporate the private sector right from crafting to implementation.

More so, the textile industry has seen a number of inconsistencies. Currently, there is a N100 billion Cotton, Textile and Garment (CTG) Fund meant for the players, even when these players have consistently told the government that finance is not their problem but unbridled importation and smuggling.

Apart from policy, cross-border issues are doing some harm to local manufacturing. Hundreds of containers berth at Benin Republic with a population of roughly 11 million, but the destination of these containers is often Nigeria, findings have shown.

Hence products coming from China, India and several Asian countries into Nigeria, first berth in Benin (Cotonou) or Togo, in order to avoid paying the stipulated tariffs.

Products coming into Nigeria from Benin and other nearby countries attract less tariff and sometimes zero duty, owing to several trade agreements existing between Nigeria and the countries.  “Why should someone bypass Nigeria’s borders and go to Contonou? There, they will bring in 100 trailers and pay for only ten. We lose a lot of revenues from there.

Ask yourself this question, why should Cotonou that has far less than one percent of Nigeria’s population import more tomatoes than Nigeria? It is easy to know where they are going, “said Eric Umeofia, founder/CEO, Erisco Foods Limited.

Also, the Common External Tariff (CET) is threatening over N300 billion investment made in the pharmaceutical industry, as the regime allows zero tariff on imported drugs, but between five to 20 percent duty on raw and packaging materials.

Okey Akpa, chairman, Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN), said, “this spells doom for the industry”, while calling on the government to act fast to save local drug makers from collapse.

ODINAKA ANUDU