Nigerian SMEs hit by smuggling, high tariff

Nigerian small and medium enterprises (SMEs) are hampered by smuggling and high import tariff, both of which are preventing many of them from reaching their full potential.
According to a report by The Economist on Nigerian SMEs, smuggling ranks among the biggest problems facing SMEs in Nigeria.
Quoting the World Bank, The Economist says estimates of textiles smuggled into Nigeria through Benin Republic are worth $2.2 billion a year, compared with the local Nigerian production of $40 million annually.
“Installing more effective checks to kick out illegal imports would provide a major boom to local industries,” The Economist says in a report entitled, ‘Enabling a more productive Nigeria: Powering SMEs.’
The report says import of these comprise 85 percent of the market, despite the fact that importing such textiles is illegal. “Dilapidated textile factories in the country’s northern city of Kaduna are what remain of Nigeria’s most important manufacturing industry, heyday employed 350,000 people,” the report say.
It states that bigger threats are illegally imported Chinese made fabrics imitating Nigeria’s signature prints, which some custom officials are turning a blind eye to.
The report notes that if SMEs policymakers wish to nurture their home-grown industries by protecting them from import competition, a far better option would be to crack down on illegal smuggling and pirating of goods from abroad.
Similarly, the report states that a 62.5 percent tariff was levied on imported books intending to protect local printing companies between 2013 and 2014. This threatened to destroy flourishing publishing businesses that have been forced to import books due to the low quality of domestically produced ones.
The Economist quotes the founder of publishing house Cassava Republic, Bibi Bakare Yusuf, who said that her firm had to dispose of 20,000 books printed in Nigeria because of their poor quality.
According to Bakare Yusuf, “pirated books from India and China are entering Nigeria through a vast distribution network.”