As political campaigns begin next week, presidential candidates are confronted with unveiling a practical blueprint for reviving hundreds of moribund industries around the country.
Incumbent President Muhammadu Buhari of the All Progressives Congress and opposition candidate Atiku Abubakar of the People’s Democratic Party are two main contenders to the seat of president.
They are faced with the task of telling Nigerians what they intend to do with the Ajaokuta Steel Complex , which has gulped $8 billion public funds without producing one sheet of steel.
Since 1994, successive governments have claimed that the complex is 98 percent complete, but the remaining two percent has become a hard nut to crack for successive administrations.
Muhammadu Buhari’s government budgeted N3.9 billion in 2016 and N4.27 billion in 2017 for the resuscitation of the steel, despite an earlier business case in the last administration showing that the complex could only work if properly privatised.
BusinessDay checks show that Ajaokuta Complex has the capacity to produce one million metric tonnes of steel, one million metric tonnes of coal , manganese and limestone, among others.
Due to lack of operations at Ajaokuta Steel, Nigeria today imports steel valued at $3.3 billion every year.
Frank Udemba Jacobs, immediate past president of the Manufacturers Association of Nigeria (MAN), said over 50 percent of raw materials used in the sector would have been locally available had Ajaokuta been working.
READ ALSO: Group seeks revitalization of moribund industries in Nigeria’s South-East
Similarly, the Aluminium Smelter Company, located in Akwa Ibom State, is not in operation due to a tussle between Bancorp Financial Investment Group Divino Corporation (BFIG), a consortium of U.S.-based Nigerian investors led by Reuben Jaja, and the United Company RUSAL, a Russian firm.
“We need that resolved. Aluminium Smelter Company needs to be re-started so that we can get ingots for local roofing sheets manufacturers,” Oluyinka Kufile, chairman, Basic Metal, Iron and Steel Group of the Manufacturers Association of Nigeria (MAN), told BusinessDay earlier in an interview.
Nigeria has three paper mills that are not working at optimal capacity. These include: Nigeria Paper Mill (NPM)
Studies show that Nigeria loses N180 billion annually from non-performance of these paper mills.
Nigeria spends N50 billion on the import of papers annually, according to a research done by Abimbola Ogunwusi and Peter Onwualu, director and former director-general of the Raw Materials Research and Development Council (RMRDC).
Newspapers and publishing firms are struggling to import papers with limited foreign exchange, leading to very high cost of paper products.
Nigerian manufacturers borrow from commercial banks at 23 percent.
They spent N51.35 billion on alternative energy in the second quarter (H2) of 2017; N66.03 billion in the first half (H1) of 2017; N62.96 billion in H1 of 2016, and N69.99 billion in H2 of 2016 and self-generate over 13,000 megawatts of electricity , according to MAN,
As of today, many private companies are either shut down or mired in intractable legal tussles. Vita Malt in Agbara, Ogun State, is shut down. Multi Trex, a 65,000 metric-tonne cocoa processing factory, the largest in the country, has been taken over by the Asset Management Company of Nigeria (AMCON).
In 2015, the only surviving brake pads and lining maker, Star Auto Industries, collapsed as it was unable to compete with cheap Chinese products and could not pay back loan borrowed from the Bank of Industry.
“It is difficult to compete with Asia, with substandard, cheap brake pads. I am not happy that import duty on brake pads fell from 25 percent to 10 percent. This is the situation since 2004 and government has done nothing about it,” CEO of the firm Chidi Ukachukwu, told BusinessDay.
Today, only three textile firms out of over 120 in the 1980s are in operation.
“What we need is the enabling environment. We cannot compete with the level of smuggling and counterfeiting going on now,” said Grace Adereti, president of the Nigerian Textile Manufacturers Association (NTMA) in Lagos at a Made-in-Nigeria stakeholders’ meeting in Lagos.
“We had the revival loans but this didn’t work because our biggest problem has never been money,” Adereti said.
Similarly, public firms such as Federal Superphosphate Fertilizer Company and National Steel Raw Materials Exploration Agency are also moribund and need a blueprint.
Fifty-four manufacturing firms closed down 12 months preceding August 2016 due to their inability to access dollars to import raw materials, according to a survey carried out by NOI Polls and Centre for Economic Research in late 2016.
ODINAKA ANUDU
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
