By Merit Ibe
President of the Manufacturers Association of Nigeria (MAN), Mansur Ahmed, has described industrialisation as a key component in the development of any economy.
Ahead 50th anniversary of MAN, he said the association has decided to dwell on the topic considering Trade Area, among other nagging issues affecting manufacturing and industrial growth in Nigeria.
COVID -19 took everyone by surprise. From March 2020, there was a complete lock-down for almost six months which distorted production. The global problem did a lot of damage to our members.
The environment, which has always been hostile was made worse by the pandemic because it affected our capacity. Our average capacity utilisation before the pandemic was probably in the 50s, but with the pandemic, it went down completely. Imports were stopped because importers could not bring in raw materials for productive use. Our pharmaceutical companies could not import the basic raw materials; the active pharmaceutical ingredient (API) because many countries locked down. Demand went down especially for non food items. The security situation got worse after the pandemic, and that compounded the issues already on ground.
On the financial intervention, government assisted various sectors, including the manufacturing sector, through the Central Bank of Nigeria (CBN). It announced about N1 trillion to support the manufacturing sector. But, the unavailability of foreign exchange (forex) eroded the gains of the support. Even if you get the money and you don’t get the forex to bring in the raw materials or critical inputs, things could even get worse because the money is not free but a soft loan. These, coupled with the general demand situation, made the initiative not as effective as it was supposed to, especially in some sectors.
Also, despite the enormous support to the agric sector, the price of agric products kept soaring. This affected the price of inputs for food and beverages, as they went up despite the intervention. In spite of the government’s efforts to cushion the effect of the pandemic, things got worse.
The most worrisome is the security situation because it affects our supply chain and almost everything, hinders access to market and still a key issue as there are still companies that are not able to distribute their products effectively as it used to. Movement is hindered especially in the northern part of the country, where we are experiencing difficulty in terms of logistics and movement.
The forex issue is a complex one, especially for the manufacturing sector. The essential thing is that we are simply not in that forex to go down and some level of prioritisation becomes absolutely essential.
MAN’s 50th anniversary
As you know, MAN was established in May 1971, so we clocked 50 in May, but we felt that after 50 years of existence, we needed to do more than just a party. We want to celebrate and equally thank God for 50 years of existence in this hostile environment. It’s important because so many things have changed. Some companies folded up and new industries are springing up.
One thing we learnt is that the new environment that is emerging as a result of these changes over the past two to three years has impacted on the growth of the industry.
This indicates that we have to be at alert, identify and try to understand the circumstances we find ourselves. And of course, the challenges that the circumstances present. This is the approach we have taken to look at the anniversary, and that is why we have planned to regard from May 7 when we marked the actual birthday till the end of the year as the anniversary year. And we have put together a number of programmes that will help us to look back, learn lessons, look forward and identify challenges and opportunities to be able to navigate a way going forward amidst all the challenges and issues facing us.
We are looking at the past and future in terms of the role of industrialisation in our continent. We believe that the manufacturing sector is critical to the growth of any country. It’s a fact that over the past 50 years we have seen many ups and downs, perhaps, as a result of the relationship between how the economy is run, the policies, regulations and what actually happens underground in the short flows in our work places.
Also, we had to actually pause, look back and ask ourselves what the last 50 years has been like to the association, perhaps more importantly, to the industry. What lessons have we learnt within this period and how will the lessons help us move forward? Thirdly, we have to look ahead to determine the trajectory going forward. We need to understand what we should do differently and what we should sustain. I believe in doing this; it’s not only for the association and its members but also for the industry, which is very crucial to part of our economy. So whatever we do, we have to take into account the wider aspect. We have learnt that a lot can change radically and MAN can always find a way around issues and challenges. The challenges we have faced in the last two years have created a lot of opportunities.
The event would be held in Lagos and Abuja, beginning from September 2 with a round-table discussion on industrialisation in Africa. It will be held at the Oriental Hotel, Lagos; with Vice President Yemi Osinbajo chairing the discussion. Other discussants will include Aliko Dangote, United Nations Industrial Development Organisation (UNIDO) representative in Nigeria; African Union Commissioner for Trade and Industry, Albert Muchanga; President of the Afrexim Bank; a business man from Tanzania and a South African. The moderator will be Doyin Salami.
Conversation with the UN Deputy Secretary General, Ms Amina Mohammed on ‘Industrialisation in Africa – A Pathway to Achieving the SDG Goals,’ will be held on October 7 with the Secretary to the Government of the Federation (SGF), Boss Mustapha as the chairman.
A three-day exhibition on ‘Made in Nigeria’ products on October 25 will be held at the International Conference Centre, Abuja. There will be an Adeola Odutola lecture as well as an evening with the Director General, World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala on October 26; which will be chaired by the Minister of Industry, Trade and Investment Adeniyi Adebayo.
We would round off the event with MAN at 50 dinner/award night on October 27. On that same day, we will unveil our new logo and mission statement, as well as launch the MAN at 50 book; a compendium of the activities and history of the association over the years. Nigerians who have contributed to the growth of the sector will also be honoured with awards.
We are seizing the opportunity of the AGM to look at our mission, what we are set up to do and our vision; our future. It will be a flow from the past to the future.
We are even more prepared now for the AfCFTA than we were two years ago because the stand we took as MAN forced us (the government and the association) to look at the way it was approaching the AfCFTA.
In the past, we signed documents without engagements, but today we must understand what we are signing. Government’s approach has changed.
The 1.2 billion market is a great opportunity. Advisers like to talk up the potential offered by the AfCFTA, which became operational on January 1. At least in West Africa, Nigeria would indeed benefit since its manufacturing is easily the most developed in the sub-region.
Advisers keep saying we need to industrialise, produce competitively and compete in the regional market. Industrialisation plays an important role in the promotion of trade. The advanced nations gain in trade than countries that are industrially backward. When it was announced many foreign agencies swamped on AUC and indicated interest to help the country decide how to approach the intra African trade.
This is a different approach which will enable us deliberate on the trade more than if we just signed like the past.
I’m not saying we are totally prepared, we are more prepared today better than we would have been if we had not taken this approach.
Remember that when the issue of AfCFTA started, MAN took a position which some people misunderstood. They thought we were objecting to it, but what we wanted was to understand the impact and implication of the agreement and the context of how it was going to impact our country before signing the agreement.
The AfCFTA, no doubt, is going to have a significant impact on our economy and industrial sector, but how we respond to this development is very important. So, some of the discussions that will take place at the event will centre on bringing together people who have experience on the matter to discuss them. That is why we have government at both the national and continental levels, key industrialists and policymakers that know where the shoe pinches us. We have identified three key industrialists from Africa; a Southern African in the mining sector; an industrialist from Tanzania, Mohammed Dewj and Aliko Dangote from West Africa.
AfCFTA is our trade. We have always felt that Nigeria has not done well in trade, especially globally. But the intention is that the trade is expected to turn things around. In our understanding of the total global trade, Africa is only responsible for about four percent and that is why Africa is not taken seriously. We end up dancing to the tune of other people simply because in the market, we are not fruitful. So, we will bring that conversation with one person who has the responsibility of conducting global trade from the perspective of Africa, the WTO DG.
For the made in Nigeria exhibition, we have invited non-Nigerians and key business people from other parts of Africa.
It is also going to be streamed live and we are telling all our connections across Africa to reactivate the platform called Federation of West African Manufacturers Association (FEWAMA). We were in Ghana two months ago to work with the ECOWAS to bring FEWAMA together. They will be aware and we are hoping they will key into the project.
Secondly, we are also part of the efforts of the continent to establish the Pan African Manufacturers Association; the purpose of this is to bring members together, so they are also going to be aware of the exhibition.
Lastly, there is going to be an intra African trade fair coming up in South Africa in November, which is the second. It is promoted by Afriexim Bank. We had the first one in Egypt about two years ago. We are trying to use this exhibition to try to recruit those who are members, in a coordinated manner. We have had discussions with Afriexim bank, we agreed we can have a Nigerian MAN exhibition that will bring our members and other Nigerians to exhibit. We have also discussed with the Nigerian Export Promotion Council (NEPC), they are helping to make sure we have a well consistent organised exhibition. This time, it will be significantly based on manufacturing capabilities. In such exhibitions it’s mostly raw materials, but we are now incorporating a manufacturing industry exhibition which will ensure our members participate fully.
We also want to challenge government’s policy position on this made in Nigeria thing. A number of presidential orders have been issued, which are intended to push the consumption of local products, but they are not working well because no efforts to actually make them work properly. We want to seize the opportunity to do that during this event, that will be part of the reasons for the three-day exhibition .
I think inspite of what I see on ground, there are a number of Nigerian products that can actually compete favourably even outside Nigeria. It’s just lack of policy support, but also we have to continue to push these made in Nigeria Products for our people to learn to consume our products.