NACCIMA: Future of Manufacturing Bleak as Industrialists Shutdown Factories for Importation
*Says Nigeria positioning as dumping ground under AfCFTA
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) yesterday expressed concern the country’s manufacturing was faced with a bleak and despairing future that threatens its survival and competitiveness in the emerging African Continental Free Trade Area (AfCFTA) market.
NACCIMA also said the difficult business environment in Nigeria has forced many industrialists to shut down their factories and resort to importation of manufactured finished products or vote with their feet by relocating to neighbouring West African countries, especially Ghana, where there is stable power supply and suitable security environment to carry out their manufacturing operations.
Responding to a THISDAY question on the future of Nigeria’s manufacturing sector during NACCIMA’s quarterly press briefing, the National President of the association, Mr. John Udeagbala said: “I am a manufacturer and this is speaking from the seat. The future of manufacturing in Nigeria as it stands today is very bleak because of issues we already know. We are talking about grid failures; we are talking about diesel prices, energy crisis, and scarcity of semi-skilled labour as we do not have sufficient welders and electricians etc. because our vocational schools are not producing enough.
“So, the answer to the question is quite simple: The future is bleak and it is declining and it is going to cause big problem for us because it is the manufacturing base that supports the Gross Domestic Product (GDP) of every country. So, that question is very important and the answer is very simple: the future of manufacturing in Nigeria with the problems that we are faced with today is very bleak.
“I do not know whether you are aware or unaware that most of our manufacturing companies are moving to our neighbouring sister West African countries and Ghana in particular. It is as a result of these inadequacies. The future is quite bleak. Thank you.”
Udeagbala also observed that Nigeria’s power sector had always been plagued by grid collapse, resulting in instability of power generation, distribution and supply while the alternative source of energy obtained from the oil and gas represents a significant portion of production costs for the private sector.
“The automotive Gas Oil (AGO), also known as diesel, and Jet A1 fuel have become prohibitively expensive forcing a lot of enterprises to shut down or scale down their productions.
“The situation puts to question the readiness of Nigeria to compete in the global economy, especially under trade agreements like AfCFTA. If urgent actions are not taken, the resulting non-competitiveness nature of Nigeria private sector will cement Nigeria as a ‘consumption-only’ economy, a dumping group for all manner of foreign goods and services.”
Commenting also on the future of the manufacturing sector, the First National Deputy President of NACCIMA, Mr. Dele Kelvin Oye disclosed that, “there are some of our members that have closed their industries and went back to importation that is more profitable,” and warned that “a country that does not produce cannot expect itself to be independent.”
Oye urged the government to invest in security and also, “reduce the current unbearable price of diesel, which is the heart of manufacturing in Nigeria. Everything changes once its (diesel) price goes up and that renders us uncompetitive even as we prepare for the AfCFTA.
“How can we compete if our domestic environment is so hostile? Industries operating in our neighbouring countries where security challenges are absent and where power supply is stable for their operations are already ahead of their Nigerian counterparts. These are huge challenges for us.”
NACCIMA, therefore, called on the government to take urgent steps in addressing the current trend of increasing public debt and stagnating economic growth.
“Furthermore, there is need for the federal government to quickly address the increasing insecurity challenges, poor infrastructure, irregular power supply and the increasing inflation rates which has remained a threat to businesses and investments in the country.
“It is our hope that this will help to project our dear nation as safe destination for investment,” NACCIMA said.