The Federal Government has commissioned $1 billion (N364 billion) locally-assembled vehicles through collaboration with the National Automotive Design and Development Council (NADDC). The disclosure was made by the Minister of Industry, Trade and Investment, Mr Adeniyi Adebayo. According to Adebayo, the vehicles, which were produced by 17 firms, including pioneers of made-in-Nigeria vehicles such as Coscharis, Nissan, Innoson, Ford and Elizade Motors. Adebayo made known that the locally-assembled vehicles would be used at the Argungu Motor Rally which is an integral part of the popular festival held in Kebbi annually, the Argungu Annual International Fishing and Cultural Festival. This Argungu Motor Rally kicked off by the President Muhammadu Buhari in Abuja. While revealing the plan of the NADDC to turn the rally into an annual event for the auto industry, the minister acknowledged the growth of the auto industry. He said Nigeria was moving forward in the area of automotive assembly, adding that from zero production level in 2012, the industry had recorded tens of thousands of newly assembled vehicles.
According to him, with the inauguration of the 10-year Nigerian Automotive Industry Development Plan (NAIDP 2013-2023) in 2013, about 62 companies have been registered to assemble vehicles. “The vehicles and brands for unveiling are a testament to the zeal and commitment of the automotive industrial subsector to the present government’s efforts towards diversification of the non-oil sector of the economy. The role of the NADDC in reviving and sustaining the automotive sector has greatly helped in stimulating growth and development in the Nigerian automotive industry.” Also commenting on the commissioning was Minister of State for Industry, Trade and investment, Amb. Mariam Katagum, who charged the auto companies to do more in the area of local content and have faith in the Federal Government’s commitment to economic diversification.
The auto industry’s role in the economic activities of all countries is undeniable and it now comes as one of the key sectors of the international economy. Car manufacturers jump into a big game to design, develop, produce, do marketing and sell their cars, forming a dynamic yet competitive auto industry. Almost all industrialized nations have the ability to produce cars applying indigenous technologies with the resources available in their manufacture. That is a great advantage for these countries as they can provide more job opportunities for their people, improving the living standard and drive the local economy forward. Nigeria hasn’t been left behind as our country followed the global trend in term of developing economy and industrialization. For many years, the government has enacted tax policies and favourable laws to encourage the foundation of native auto assembly and manufacture plants, allowing the industry to flourish.
Back in October 2013, the Nigerian Government introduced a new automotive policy which discouraged completely assembled cars to be imported to the country. As a result, car manufacturing companies in Nigeria started to take the benefit of the newly-launched policy and roll up their sleeves to make or assembled cars by themselves.
The Federal Government disclosed that the country would not attain the much needed economic growth and development without a strong foundation and emphasis on made in Nigeria goods and services. Speaking at the 22nd Nigerian Economic Summit in Abuja, President Muhammadu Buhari also stated that the diversification of the Nigerian economy remained a cardinal point of his administration, adding that his greatest desire is that Nigeria moves from import dependence to self-sufficiency in local production, becoming an export-led economy in goods and service. According to him, this had been the commitment and mandate of this administration, while he noted that he has remained focus on it each day since the assumption of this administration. He said, “I am also delighted that you have chosen as your theme: ‘Made in Nigeria’ which lies at the heart of so many of the efforts we are making to lead us through this troubled times and to lay a firm foundation for the future. “As I have said in the past, we need to diversify the economy so that we never again have to rely on one commodity to survive as a country, so that we can produce the food we eat, make our textile, produce most of the things we use and create the right environment for our young people to be able to benefit and create jobs through technology. “There is no better way to achieve this without building our economic foundation made in Nigeria goods and services. Fortunately, we have champions of made in Nigeria that had defied the odds over the years to produce locally and contribute to our economy.
It would also be recalled that, the Federal Government says it has put plans in motion to enforce the buying of Nigerian products by government agencies. The Minister of Information, Culture and Tourism, Alhaji Lai Mohammed, said that the Act establishing the Bureau of Public Procurements would be reviewed to enforce the buying of Nigerian products which would, in turn, boost the economy. He said, “Talking about Made-in-Nigeria products, let me use this important national platform to announce that the Federal Executive Council has already approved measures to sensitize Nigerians to patronize such products. “These measures include the approval given to the Bureau of Public Procurement to increase the patronage of Made-in-Nigeria good and services through a review of its Act.” While commending the Abia State Government for its ingenuity in the production of Nigerian products, the minister said the Nigerian military was already wearing boots made in Abia State. He said the production and sale of such products would help diversify the economy which is still dependent on oil.
Mohammed said, “Patronizing Made-in-Nigeria goods and services is also key to the success of the policy. In this regard, I can boldly say that Abia State is a pacesetter. Today, the state supplies high-quality military boots to our military and that is just one of such impressive ventures by the state. “So, while the state is boosting local production of goods and services, the military is patronizing Made-in-Nigeria goods. It’s a symbiotic relationship, and there is no better way to give teeth to the economic diversification policy.” Mohammed added that the Presidential Enabling Business Environment Council, which is presided over by the Acting President, Yemi Osinbajo, had approved a 60-day national action plan for ease of doing business in Nigeria.
The reforms, he said, include “making it possible for new businesses to be registered online from start to finish without having to visit the Corporate Affairs Commission office, streamlining the number of agencies operating at the nation’s ports to just six, introduction of Visa on Arrival, Tourist and Business Visas and 48-hour Visa processing procedures by the Nigeria Immigration Service, reducing the number of forms required to incorporate a business in Nigeria from seven to one, and opening of additional 28 offices for issuance of Residence Permits in Nigeria, thus bringing the issuance of Combined Expatriate Residence Permit And Aliens Cards closer to the doorstep of employers of expatriates in all 36 states and the FCT.”
It is important to note that, the textile industry in Nigeria is one that ought to be very vibrant and thriving, creating employment opportunities, generating wealth, reduce poverty, increase the capacity utilization of industry, make the economy strong and increase the revenue base of the country, but the textile industry in Nigeria has been on a steady decline, apparently due to several identifiable factors which include among others, infrastructure decay, lingering economic recession, inconsistent government policy, energy crisis and the propensity of an average Nigerian for imported textile products. To a large extent, the persistent crisis in the energy sector, particularly as it relates to electric power generation and supply has over the years remained a major albatross to sustainable growth and development in the real sector of our economy. Energy is vital and central to industrial growth and economic development in any society. In a developing economy such as ours, achieving a stable electricity generation and supply should be top on our priority; which the present government is undertaking A situation where manufacturers and industrialists rely on alternative source of power supply to sustain their production level and remain in business does not augur well for our economy. In fact, from experience, it has rather proved to be counterproductive, as, in the long run, it makes a negative impact on the overhead cost with the corresponding effect on the eventual cost of goods produced by the company.
To this end, President Muhammadu Buhari, recently, ordered that immediate attention be given the revival of ailing and moribund textiles, mining and agro-based industries. Buhari gave the directive when he received a delegation of foreign investors, who were proprietors of Olam Farms Nigeria Limited, led by Mr Mukul Mathura. President Buhari declared that the creation of more jobs for Nigeria’s unemployed youths was the key objective of his administration’s economic agenda and will be pursued with the greatest possible dedication. He said: “I still recall with clarity that at some point, the textile industry in Nigeria was employing about 320,000 Nigerians. But today, the same industry employs far less than 30,000 people and the factories operate below capacity or they are completely closed. “I have made a promise to Nigerians that jobs will be created as part of efforts to revive the economy and that promise will be fulfilled. We will move as fast as we can to resuscitate the textile and mining industries, and also improve production in our agricultural sector. “Now that we are trying to create jobs, we cannot allow industries and factories to close down. Instead, we should be making every effort to ensure that we re-open the closed ones and attract new ones to reduce unemployment.” The President further stated that his administration would encourage investments in agriculture and other sectors of the economy by creating a more favourable environment and enabling laws, stressing that he had already ordered some immediate interventions to address current challenges faced by industrialists.
It is instructive to note that, the textile industry played a dominant role in the manufacturing sector of the Nigerian economy. With a record high of over 140 companies, Nigeria witnessed a boom in the textile manufacturing industries in the 1960s to 1970s with companies such as Kaduna Textiles, Kano Textiles, United Nigeria Textiles, Aba Textiles, Texlon Nigeria Limited, First Spinners Limited, amongst others, employing about a million people, contributing about 15 per cent of the manufacturing sector earnings to the GDP of the Nigerian economy and accounted for over 60 per cent of the textile industry capacity in West Africa. The story however changed for the industry in the 1980s. Following the oil boom, the government became reliant on oil and abandoned agriculture. The neglect of the agricultural sector hurt the textile industry. The production of cotton, the basic raw material used for the manufacture of clothes regressed rapidly as its production capacity declined by 50 per cent. It has however been proven that the textile industry is indeed a driver of growth and employment globally. For example, the exports of the textile industry in Hungary edged up to 3.2 per cent in 2014 to $1.62 billion from $1.57 billion in 2013. With a strong labour population of over 43, 000 in the textile industry, the involvement of medium-sized enterprises in the industry and a robust export of textile products to countries such as Germany, Italy, Austria, France and Romania, tremendous improvement has been forecasted for Hungary’s economy in 2016.
The influence of the textile industry is bigger in China with more than 100,000 manufacturers employing over 10 million people. The industry is estimated to contribute about 47 per cent to the country’s GDP with its value of garment export believed to be around $153.219 billion as of 2013. With its percentage of the global garment market at 38 per cent, China is the world’s largest manufacturer, exporter and consumer of garments. The Chinese textile industry remains competitive due to the continued investment in the domestic industry. Given the importance of high productivity of the textile industry in boosting economic growth and the standard of living of the people as evident by the examples stated above, and with the growing success of the country’s fashion designers today as seen in both local and international fashion shows, it is apparent that Nigeria must give priority to the textile industry and indeed, the entire spectrum of the manufacturing industry to improve the fortunes of the Nigerian people and their economy. It would be recalled that, as of the year 2005, the contribution of the industry to GDP dropped to less than one per cent. The market share of the industry equally dropped from 27 per cent in 2003 to 15 per cent in 2005. The implication of this is that Nigeria now depends almost wholly on the outside world for her clothing needs. Studies carried out on small scale traders in Nigeria showed that the country spends a minimum of about $158.4 (N19 billion) annually on importation of fabrics and textiles from Dubai alone. This figure can be up-scaled six times if we consider imports from such countries as China, India, Turkey, Hong Kong, Malaysia and other textile producing countries. Perhaps we will better understand the dilemma Nigeria is in and start seeing the textile industry as a huge foreign exchange earner if we understand the fact that China’s textile industry, the largest in the world, contributed about $420 billion (N49 trillion) to the country’s GDP. Exports of China industry were valued at $178 billion (N21 trillion) in 2007. We must, therefore, as a matter of urgency, wake up from our slumber.
Made in Nigeria shall be given overwhelming preference or at least 40 per cent of the procurement spend on locally manufactured goods and services providers. Some priority items include uniforms and footwear, food and beverages, motor vehicles, pharmaceuticals, construction materials, Information and Communication Technology, furniture and fittings and stationery. Within 90 days of this order, the heads of MDAs shall assess the monitoring, enforcement, implementation and compliance with this Executive Order and Local Content stipulations in the Public Procurement Act, or any relevant act within their agencies,” the document further stated.
*** Written by Jide Ayobolu.
