We Must Produce or Die

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Godbless is a furniture maker. He was privileged to have attended one of the technical schools in the 1980s and upon graduation did his internship with one of the highly rated furniture companies existing then. He was retained and worked for that company until the late 1990s when he was sure he had garnered enough experience and saved enough money to set up his own outfit. Not long after he set up, he was literally smiling to the bank as corporate and individual clients kept inundating him with orders for cabinets, desks, chairs, settees, beds and so on. By 2005, Godbless finally agreed to the entreaties of his bankers and took up a loan to expand his business by acquiring more up-to-date equipment and a bigger property in the suburbs of Lagos for his factory. Things couldn’t have been better as cheaper good quality materials, input, accessories were coming in from China and his products could easily compete with products from advanced countries.

However, by the turn of the decade Godbless’s whole world had begun to crumble around him. His patronage had dropped by 50%, he was steeped in debt, owed a backlog of salaries and had to lay off 20 of his 30 permanent staff. Today, Godbless has laid off all but 2 of his staff and sold off his property and most of his equipment in order to free himself of bank debt. It would be appropriate to say that Godbless was not so blessed anymore as he was back to square one in his career. You may wonder what could be responsible for Godbless’ travails. It is simple. His patrons suddenly discovered cheaper albeit substandard alternatives dumped in Nigeria from China! Fully finished furniture of all types, including doors can be found in virtually everywhere you go in Nigeria, rendering hundreds of thousands of blue-collar workers in that sector jobless.

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It is no joke. Unrestricted imports and wanton smuggling of all manner of products into the country has become the single most important factor impeding against the growth of Nigeria’s manufacturing sector with the dumping of cheaper and mostly inferior alternatives in Nigerian markets. Godbless’ travails is a metaphor for  many Nigerian companies.

In 2006, Dunlop Nigeria Plc abruptly shut down its N8 Billion production plant after producing tyres and rubber products in Nigeria for 45 years, and that was only four years after investing about N6.5 Billion on the plant technology in order to boost commercial vehicle tyre output. In 2007 Michelin Nigeria followed suit and announced its painful but necessary decision to close its manufacturing plants in the country, while retaining sales operations and maintaining its rubber plantations. By that decision, over 1,300 jobs were terminated. It was clear that cost competitiveness was one reason that led to Michelin’s decision.

Almost 4 years after Dunlop’s group managing director, Dr. Mohammed J. Yinusa, announced in December 2011 that their production lines may be brought back to life in 2012 following the federal government’s pledge at that time to review import duties among other factors, to encourage local production, the company’s factories are still in mournful silence because clearly, what they received was just the usual lip-service.

A visit to a textile and garment factory in the first week of June 2015 in the Surulere, Lagos industrial cluster area further brought home the dangerous slide in the fortunes of the manufacturing sector to me. This company which produced some world-class promotional branded polo shirts for one of my clients only a few months ago had been forced to close shop the previous week. Cheaper alternatives were being sourced directly from China. Over 200 staff had to be laid off in the process! The expatriate GM told me their next move was to source for buyers for their plant and equipment. Mind you, none of these companies folded up completely. They merely, shut their production lines and joined the league of ubiquitous traders to make easy money through importation to the detriment of the country.

The story is the same in virtually all productive sectors as factories and warehouses are shut down, and are either left lying fallow or are sold off to churches or converted to trading centres.

Ninety percent of the tomato paste in Nigerian markets are imported, the same applies to rice, spirits and wines, electronics, computers and IT equipment, beauty products, clothes, shoes, fashion accessories, paper, fuel, generators, tricycles, cars and even services such as health-care and education to list a few. In our foolishness, we have shut down keep shutting down most of our factories, industries and enterprises and unwittingly providing employment and creating wealth for millions of people across the world while consolidating our poverty. As a result, over here in Nigeria we are creating an army of unemployed youth and middle-aged adults whose frustrations will eventually lead to monumental social implosion if not urgently checked through the conscious execution of well-crafted, self-serving policies for the Nigeria nation-brand.

One of the good legacies of the Goodluck Jonathan administration is the establishment of The Nigerian Content Development and Monitoring Board (NCDMB)  following the signing into law of the act on 22nd April, 2010.Some of the responsibilities the board include the following: increasing indigenous participation in the oil and gas industry, building local capacity and competencies, creating linkages to other sectors of the national economy and boosting  industry contributions to the growth of our National Gross Domestic Product.  It has become clear that Nigeria is in dire need of an adaptation of this sort of local content Marshall Plan to salvage our manufacturing and productive sectors. We must begin by wholly producing the products that we have comparative advantage in. This includes primary and secondary products. A whole lot of wealth is lost every year because we fail to properly harness our resources whereas a virile manufacturing and productive sector will spin-off robust opportunities for the supply chain, distribution chain and the services industry.

The President Muhammadu Buhari administration has a unique opportunity to ride on its “Change” mantra to steer us out of this treacherous slide. While it is not possible to be an island where we provide all that we need, it is pertinent to take a cue from the George W. Bush and Obama administrations that rushed to bail out their ailing industries during the recent global depression. Obama has since gone ahead to turn the US economy around by introducing policies and legislation that compelled American companies to bring back their production lines from Asia and re-launch America into a manufacturing hub for the world. We really have no choice because if we do not produce, use and sell our own products, we shall die as a people and as a nation sooner rather than later. Time is of the essence.


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