Amid the fall in global oil price, the Director General of the
Manufacturers Association of Nigeria MAN, Mr. Remi Ogunmefun, in this
interview, says there is need for President Muhammadu Buhari’s
administration to hit the ground running by initiating infrastructural
projects. Excerpts:
How do you rate manufacturers’ performance on the economy following the crash of global oil price?
It has been difficult since the price of crude oil dropped.
Manufacturers can no longer afford to bring in the basic raw materials
needed for our industries due to high exchange rate. Many manufacturers
are going through very difficult times. However, we in the sector will
continue to give our best to help the economic agenda of government.
We are committed to providing goods required for our factories, so as
to rely less on importation. The drop in oil price is adding to the
numerous challenges we face as an industry.
How do you mean?
Initially, we had a challenge of electric power which everyone is
aware of. We don’t have the required power to run industries. So our
people have had to rely on alternatives such as generators or gas.
There is also the lack of infrastructure. The rail service is not
efficient enough. There is the problem of bad roads, inadequate water
supply required for industries and then security. These are very
serious problems. Yet, we are committed to making Nigeria one of the
best countries in the world.
There is the clamour, even from your quarters, urging
government to implement policies that would discourage importation. What
actually propped this agitation?
We are a consuming nation, and, most times what we don’t produce, we
import. But the goal of MAN is to make sure that what we need in
Nigeria, is produced locally. From toiletries, to furniture, iron rods,
roofing materials among others, products that are produced in Nigeria
need not be imported. I have had argument on this in the past,
particularly if those products can be manufactured here in sufficient
quantity. If we have improved infrastructure and there is accessibility
to funds at about 22-25 percent interest rate, single digit like seven
to nine percent maximum, these could help manufacturers who plan to
expand their factories as well as attract new investments into Nigeria.
But many investors shy away because of infrastructural deficiencies and other issues which we are all familiar with.
Recently President Muhammadu Buhari laid a foundation for
infrastructural development in Rivers State. How can that help in
global competitiveness among Nigerian manufacturers ?
It would definitely take time. Those importers we are competing with,
have infrastructure that are well developed. They don’t have problem of
power, or rail system in transporting their products, they don’t have
any problem with their ports, be it air or sea. Goods are cleared
within a day or two. They don’t have the problem or shortage of skills
required for their industries. They don’t have all these problems and we
are competing with them. So you can understand the reason many of us
are crying for the development of our infrastructure. I make bold to
say, if we improve on our infrastructure today and we have access to
sufficient power supply, which is very critical, and our roads are good,
and we have effective rail system, security and water, then Nigerian
manufacturers can compete with any others in the world. But with the
situation on ground, it will be difficult for us to compete and many
manufacturers will be force to shut down their factories, if it continue
in this manner. What many importers don’t understand is that anytime
they import products into Nigeria, they are shifting Nigerian jobs
abroad. Naturally, once you produce in Nigeria, you create jobs for our
teaming youths and unemployed graduates.
But there is a make-believe that made in Nigeria products are inferior to imported ones. What do you say to this?
It’s a thing of the mind. As a DG of MAN, I still use locally made
toilet soaps and cream that are of superior quality to that of foreign
manufacturers. So, Nigerians should start taking their minds away from
that paradigm of imported products being better and start looking
inwards to appreciate the benefits of our made in Nigeria products. This
is what will make Nigeria great.
What do you then make of building collapses in recent times traceable to substandard building materials in Nigeria?
That is the make believe of some people and I feel very bad about it.
Nigerian steel industry is still developing and we have a responsible
steel industry. The iron rods manufactured in Nigeria are very good and
are certified by Standard Organization of Nigeria SON and other
international organizations.
I feel it’s high time Nigerians started looking at iron rods imported
into the country to see if they are of good quality. We observe that
some of them are even lower in quality to Nigerian made iron rods.
The just concluded Nigeria Economic Summit, NES, has come and gone. How will you describe its impact so far?
It was a good conference but manufacturers were mere participants.
Nevertheless, it had a great impact particularly in re-awakening
Nigerians about the economic difficulties and opportunities in Nigeria,
as well as the way forward. The essence of every conference is to share
ideas and be able to proffer solutions on how to solve these problems.
We hope it would continue.
You have been part of many fora on national discourse on
leadership in Nigeria. What is your view concerning the need for
economic restructuring in Nigeria?
Economic restructuring in Nigeria for me is a way to go. We have been
so dependent on oil, thereby running a monolithic economy. The issue on
ground presently is the continual fall of oil price which has brought
us to where we are. The oil price is volatile. So what we need to do as a
nation, which is what we have been talking about over the years, is to
diversify our economy. But how do we diversify? By going to the real
sectors. Where is the real sector? Manufacturing and agriculture. They
are the productive sectors. These are the sectors that are the future of
Nigerian economy. These are the sectors that need to be developed and
empowered, so that people could be producing. What we should be doing is
what Chinese people did. They don’t have oil, India does not have oil,
and yet they are exporting to the world and are making money for their
country. That is exactly what Nigeria should do. Every indigenous
manufacturer should be exporting to the world. We ought to see Nigerian
products all over the world.
Do you think Nigerian manufacturers have the capacity to export to the world like her counterparts overseas?
Why not! We do have the capacity. Once we get the fundamentals
correctly. With the basics for manufacturing on ground, like
infrastructure, sufficient electric power supply, good roads, industrial
zones clusters nationwide. Nigerians are very hard-working and
productive people. Even on a competitive basis. We have actively, about
2000 manufacturing companies today, in Nigeria that are MAN members in
various areas of the manufacturing. The average capacity in our
factories presently is about 53 percent. But it has dropped because of
the recent challenges we had on the foreign exchange ban on about 41
items by Central Bank of Nigeria (CBN), that affected some basic raw
materials required by manufacturers to power the industries. So if a
manufacturer does not have the basic material required definitely
capacity will drop. Just imagine our people producing full capacity to
what is already here, our contribution to the Gross Domestic Products
GDP will jump to about 40 percent.
How achievable can manufacturers under your umbrella make up to 40 percent of the nation’s GDP?
If manufacturers in China can be adding about 46-50 per cent to the
country’s GDP, why can’t Nigeria achieve it! We are very hard-working
people. Today, Nigerian manufacturers are contributing about 9.2 per
cent to our GDP. We can have a progressive match to the target of 40 per
cent if we are determined.
China had this exact challenge 34 years ago. China was in shambles
too. No roads, infrastructural decadence stirred at them in the face. In
fact, people used to call it a grey country because they had nothing.
It was a country full of bicycle riders, but they made their country
what it is today by working first on their infrastructures and opened
their country for investments. That was how American and European
companies went there. They built factories and industries sprang up all
over the place. They had very friendly investment policies and the rest
is history today. I am one out of a million that believes it is
achievable in Nigeria, once infrastructure and other basic requirements
that will make manufacturing convenient are put in place. If all
government policies are well defined and are friendly to manufacturers,
the sky will be our starting point in Nigeria.
What do you make of the decision by electricity distribution companies to increase tariff?
As far as MAN is concerned, we have an existing tariff that is not
due for review until 2017. Then we can discuss either to increase or
reduce tariff because you can never know what the situation will bring.
People keep saying they should increase tariff; why can’t it be reduced!
It baffles me and I don’t understand how it came about. The DISCOs
should not take Nigerians for a ride because we are operating under
difficult times and difficult environment. The issue of increase in
tariff on electricity is unacceptable and Nigerians should not tolerate
any situation where an increase is forced on us.
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