Investors request Indian electrical companies to establish plants in Nigeria
The challenges of delay in clearing of goods at Nigerian ports, high import duty, soaring cost of freighting and other bureaucratic bottlenecks have pushed Nigerian businessmen in electrical and related materials to appeal to Indian manufacturers to consider setting up their plants in Nigeria to checkmate high cost of doing business.
Presently, to clear 20 feet containers of electrical materials at the port, according to importers costs about N4.5 million against N1.8m previously, freighting of the same size of container from India to Nigeria costs about $7,500 while freighting 40 feet container costs about $15,000.
These challenges and costs are in addition to a one to two months delay in clearing the goods at the ports with implications on demurrage and the unchecked touts along the road who collect over N200, 000 cumulatively per container.
Chief Executive Officer of Promadaz Industries Limited, Sunday Chris Orji, dealer in electrical materials who spoke at Power and Elec Nigeria 2022, the largest international B2B meetings & trade Fair in Nigeria, curated for the energy, power, renewables and electrical segment, strongly believed that if Indian electric product manufacturers open factories in Nigeria it will not only facilitate business but also create employment.
“If they open factories here, it will enable them to have more sales. Importation limits sales and this is worsened by delays in clearing and high duty rates which have doubled. By the time you calculate the clearing cost, freighting and other logistics, the business is difficult,” he told the Head of Chancery, High Commission of India, Lagos, Rachit Rawat who declared the two-day trade fair open on March 28, 2022.
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He said that Nigeria cannot move forward in creating jobs and increasing GDP when it relies only on importation.
Orji’s position was strengthened by Peter Ubaezike, Executive Chairman of General Electrical Dealers Association of Nigeria, Alaba International Market, Lagos who agreed that Indians have investments in Nigeria but not yet in the electrical sector.
Justifying the need for Indian electrical material manufacturers to establish in Nigeria, Ubaezike estimates that over 5,000 containers are imported from India annually with a container costing about $150,000.
“Alaba market remains the largest electrical market in West Africa and Alaba controls about 65percent of imports,” he said.
In his comment, Chairman of the Nigerian Institute Electrical and Electronics Engineers (NIEEE) Lagos Chapter, Olalekan Olabode said when Indian manufacturers establish in Nigeria, it will have a ripple effect on their business and the Nigerian economy.
Responding, Rachit Rawat who revealed that Indian- owned companies have investments in excess of $19 billion in various sectors said that further interactions with Nigerians will deepen business collaborations. India has crossed over $400 billion exports and Nigeria accounts for about $6 billion of this figure.
“A lot of Indian companies are interested in the Nigerian market and they are interacting with local investors. We encourage them to interact and engage and understand the requirements of Nigerian businesses and consumers and see likely opportunities for setting up local manufacturing plants in Nigeria when and how it is convenient to them”.