The Manufacturers Association of Nigeria (MAN) has urged the federal government to urgently monitor and enforce the Executive Orders 003 and 005 on patronage of made-in-Nigeria products by Ministries, Departments and Agencies (MDAs) in line with its policy to promote locally-made products as part of the ongoing economic diversification.
MAN, whose appeal is contained in a report by its Director-General, Mr. Segun Ajayi-Kadir, to the association’s council, also urged the federal government to “direct MDAs to apply the 30 per cent Margin of Preference (MoP) in procurement decision as recommended by MAN.”
State and local governments, MAN said, should also be encouraged to embrace Made-in-Nigeria products by replicating the decision of the federal government in this regard.
It also stressed the need to sustain, monitor and enforce the 40 per cent of Micro, Small and Medium Enterprises (MSMEs) preferential participation rate in public procurement as recommended in the Executive Order 003.
MAN wants the federal government to create the sustainable platform through which the general public would be continuously educated on the need to jettison the current penchant for foreign products and patronise locally manufactured products.
“To protect the local manufacturers, the federal government should closely monitor smuggling, adulteration, counterfeiting and cloning activities in the country with stricter penalty on those found culpable of the offences,” it stated, even as it blamed low patronage of made-in-Nigeria products as partly responsible for the lack-lustre performance of the manufacturing industry sector of the Nigerian economy, which it said, was on the verge of recession.
MAN had at its last annual general meeting in Lagos, noted that unsold inventory of finished goods produced by members had been rising, an indication of low patronage.
In naira terms, unsold inventory rose to N161.53 billion in the second half of 2017 from N35.42 billion recorded in the corresponding period of 2017, indication of N126.11 billion increase over the period, adding that it also increased by N1.94 billion or 1.2 per cent when compared with N159.59 billion recorded in the preceding half.
According to the report, over all, unsold inventory of manufactured goods in Nigeria totalled N321.12 billion in 2017 when compared with N90.43 billion in 2016, indicating an increase of N230.77 billion or 255.19 percentage point.
As part of efforts to boost local production of goods in the country, the organised private sector (OPS) comprising Nigeria Employers’ Consultative Association (NECA), Manufacturers Association of Nigeria (MAN), Nigerian Chambers of Commerce, Industries, Mines & Agriculture (NACCIMA), Nigerian Association of Small and Medium Scale Enterprises (NASME) and Nigerian Association of Small Scale Industrialists (NASSI),had told the federal government to adjust the Bureau of Public Procurement Act for local companies/suppliers to supply goods worth N30 billion to the ministries, departments and agencies (MDAs), from its current N1 billion.
The move may not be unconnected with the previous lamentation that greeted the non-compliance of the policy on patronage of made-in-Nigeria products and lack of enforcement of the procurement Act by MDAs.
The OPS also, then, stated that a realistic margin of preference of about 60 per cent should be effectively implemented for all procurements by the three tiers of government in line with the BPP Act.
The immediate past President of MAN, Dr. Frank Udemba Jacobs, stated that the adjustment in the procurement Act on supply of local goods to MDAs by local manufacturers became necessary in line with the Federal Government’s import substitution and backward integration programme to diversify the economy, adding considering the size of Nigeria and the resources at the disposal of government at all levels, fiscal behaviour had a major impact in driving national demand.
Jacobs stated that government should, therefore, continue to support its policy on patronising made-in-Nigeria products by monitoring the MDAs to ensure compliance with the policy.
He said, “We urge the full implementation of the relevant portion of the Procurement Act 2006 (that aims at boosting local production) and also call for the review of the Act to cover states and local governments functionaries.
“Our expenditure in favour of imported products is detrimental to the growth of local industry as it increases employment in the country of origin and simultaneously increases poverty in our land.
“We, therefore, thank the federal government for instituting the policy on patronage of ‘Made-in-Nigeria’ products and urge that the directive should be enforced.”
Besides, the MAN president explained that Micro, Small and Medium Enterprises (MSMEs) should be encouraged to participate in all public procurement through instituting a minimum of 40 per cent participation rate to boost their productivity in the manufacturing sector.
Speaking on why Nigerian goods are not competitive with their foreign counterparts, MAN noted that factors bordering on hostile operating environment were responsible.
“Everybody in this country understands the difficult condition under which manufacturers operate. The power is unstable and inadequate and very expensive when compared to what is obtained in other climes,” it said.
It said that a survey by the association revealed that the federal government has continued patronage of foreign goods at the detriment of Made-in-Nigeria products is causing the country’s local manufacturers about $3 billion yearly, noting that government remained the largest single spender in the world.