Nigeria’s harsh operating environment for manufacturers

Each time I hear government officials exhorting Nigerians to buy made in Nigeria goods  I ask which made in Nigeria goods? The government should know that under its current  economic policies, there is no way industries can thrive in the country. Nigerians produce nothing at profit except plastics and sachet water. The government is against […]

Each time I hear government officials exhorting Nigerians to buy made in Nigeria goods  I ask which made in Nigeria goods?

The government should know that under its current  economic policies, there is no way industries can thrive in the country. Nigerians produce nothing at profit except plastics and sachet water. The government is against industry, against manufacturing and against SMEs.

To buttress my point, let me put things in proper perspective.  The first is to look at the power sector. With electricity generation below 5000MW, Nigeria can never develop. The World Bank said Lagos alone needs 19,000MW of electricity to sustain growth.

South Africa’s Ministry of Mineral Resources and Energy, said the country generates 58,095 megawatts of electricity. This is a country with smaller economy than ours. If it uses 58,000MW of electricity, we should ideally use 90,000MW.  But that is not the only problem. In Nigeria, companies are being billed by power sharks to a point that they operate at a loss. Most of them are closing shop because they cannot afford the electricity bills.

The next are the seaports. No country has Nigeria’s chaotic seaports administration in the world. The huge size of its imports makes matters even worse. But it is not the volume of goods to be cleared that makes the ports such a monumental disasters but the kind of corruption among officials.

A normal seaport will have only customs officials in charge of clearing goods. But Nigeria has Customs, Immigration, Police, NSCDC, DSS, Quarantine, NAPTIP, Fire Brigade and NPA. All are there to collect bribe and in the process delay clearing process for as long as possible. No country develops without effective ports administration.

Another issue is moving the goods. After going through a nightmare to clear their goods, taking them to their destination is another journey through hell. The armed robbers and kidnappers are doing their own. The police and customs have road blocks everywhere looking for trailers carrying goods.

The local government and VIOs are also doing their own. All are out to collect bribe and can hold trucks for days. This is not how to grow industries. The federal government is fully aware of these corrupt officials but pretends all is well advocating buy Nigerian made.

Nigerian SMEs and other industries pay all manner of taxes levied by federal, state and local governments. A company can pay more than 10 different types of taxes with default leading to outright closures. Ideally, the federal government should tax industries and share the proceeds with states.

Perhaps, the biggest issue is the current insecurity in the country. Any industry sited in the country is fair game to bandits and kidnappers. Like farmlands, most factories are abandoned due to insecurity. Unless government restores security of lives and property, Nigeria will never develop its industries.

Finally, is the instability of the naira. No investor will invest in an economy with unstable currency exchange. The fluctuations in the exchange rate distort planning and make business forecast impossible.

These are few areas the government can look into if it wants to see goods made in Nigeria. Nigerians are enterprising, they only need the government to create the environment for them to key into production.

 

Hafsat Aliyu Nuhu lives in Kano