Nigeria: FG Lashes Manufacturers Over Discordant Requests for Ban, Waivers

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Vanguard (Lagos)

21 August 2008
Posted to the web 21 August 2008

Franklin Alli

The Federal Government has lashed out at manufacturers over the ever discordant requests for waivers and bans on imported products, saying "there is no unity of interest among the different sub sectors.

"The discordant voices from the private sector groups often lead to wrong economic prescriptions that end up in truncated policies which result in policy inconsistency in governance. This has robbed the economy of its growth potential.

The implication also has been policies that have impacted negatively on some of the operators in terms of factory closures, uncompetitive products, and high rate of unemployment.

According to Ahmed Garba Bichi, Minister of State for Commerce and Industry, "While one sub sector is asking for outright ban or a high duty rate on a particular product, the other sub sector is asking for waiver on the same product, meaning that there is no unity of interest among the different stakeholders. Possibly some are after their interest which must not be so."

In an address during a one- day seminar on the Nigerian Textile Industry: Positioning for Rebirth and Growth, organised by Nouvelle Communication, Vista Plus Limited in collaboration with Nigerian Textile Manufacturers (NTMA), the Minister noted that the problems of the manufacturing sector goes beyond infrastructures inadequacy such as electricity, water, and fuel to smuggling, high interest rates by banks which make it difficult for operators to obtain loan for upgrading of machineries, stressing that there is also another angle to the problems facing the sector and that is lack of synergy among the different sub sectors when it comes to requests for waivers and concessions on importations of certain items.

He said that there is therefore, a need to address the issue urgently if the industry is to be repositioned for survival and growth.

"I, therefore, advise that the different stakeholders in the industry should come together and advocate a system on imported duties that are fair and protective of all members throughout the entire value chains so that the struggle for who gets favoured by prevailing duty would be removed.

"You can do this by setting up a 'standing body' drawn from the already existing associations in each of the sub sectors. They are to consider all requests for ban, waivers and concession from the sub sectors in terms of the effect of such requests on the overall value chain before forwarding same with their recommendations to the government."

This, he asserted, will definitely discourage and reduce the wholesome trading practice to the detriment of genuine manufacturers who have made huge investments in backward integration.

"In the spirit of Public-Private Sector Partnership, which this administration firmly promotes, I wish to assure you of government's total support and readiness to assist you wherever practicable to realise your goals," he said.

The Secretary General, National Union of Textile, Garments and Tailoring Workers of Nigeria (NUTGWN), Isa Aremu, who also spoke on the occasion, noted that banks consolidation has not helped to alleviate manufacturers' problem.

"Banks have so much money but they are engaging in short term funding and they are lending at terrible interest rates.

"No industry can survive at 20 per cent. In countries like China, Textile industry have zero per cent interest rate, in Japan it's just about 5 per cent, Malaysia 3 per cent.

If you borrow at 20 per cent and you are going to pay also for electricity, diesel, water, etc, what price are you going to charge for your products? Production cost is so high, and you can't increase your price because made in China will under cut you. So if the market is already dominated by China products, what can you sell?"

He continued: "For the fact that we are talking about N70 billion Textile Development Intervention funds showed the failure of banks' consolidation policy. After the consolidation, banks are supposed to have a lot of money for lending."

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