Members of the Manufacturing Association of Nigeria (MAN) have continued to cry out over the negative effect of cheap imports, bad roads and gridlocks on their businesses in Lagos as well as other parts of the country.
Businesses operating along the Lagos-Ibadan Expressway, for instance, appear to be facing hard times following incessant gridlocks occasioned by endless road rehabilitation in that corridor.
Lamenting the havoc being wreaked on his business located in Mowe axis of the expressway, Sehinde Johnson, chief executive officer of Infinity Paints Limited, said: “Government should look at the issue of gridlock because if you put a vehicle on the road, it takes up to 4-5 hours to move from Lagos-Ibadan Expressway to your destination, which should not have taken up to 30 minutes. I can tell you frankly that if a study is carried out on our manufacturers in that belt, it would be difficult to find manufacturers that are making use of 40 percent of its capacity.” “Look at the impact of the gridlock on that axis on the market and when you operate in a competitive market, how many buyers would want to take the trouble of coming to your factory when they can easily get somebody that within a space of 30 minutes, they would be there? Of course, we know that it would not be forever, but this project has lasted for more than two years as it is now and most of the manufacturing companies in that belt have been groaning under revenue losses, and you know that there are some of the costs that are fixed,” he said.
According to him, “Nobody is going to ask you a question of how you are coping or if you are utilising your full capacity. You just have to pay your tax, pay your bills and others. These are the realities and how long can an industry survive in that kind of climate? Government is doing great by constructing the road, but on the other hand, one would have expected that alternative routes should have been created if we put into consideration, the economic price because production has gone so low. A lot of companies have sacked their employees. Markets have also gone low and they are not running at optimal capacity. These are some of the challenges but we trust that the road would be done in a short while so that we can have relief after so much pain.”
Johnson, whose business started ten years ago, also noted that: “As it is today, the real sector is in comatose because the enabling environment is begging for answers. If you look at the other neigbouring countries in the West Africa sub-region, some Nigerian companies have moved out to those countries because the Ease of Doing Business in Nigeria is still very poor. Then, the infrastructure development is still in comatose. These are the realities.
“If you go to Ghana, Benin Republic, you will see a lot of Nigerian companies. These countries give companies tax relief and other incentives to attract investors into their countries. Nigeria should not be left out. We should look at our real sector by re-engineering our policies to encourage more investors. All of us cannot be politicians but if you look at the large population of our youths that are unemployed and the multiplier effect in the economy as well as the security issues in this country, I think we have had enough and if we don’t deal with it today, it will affect our tomorrow because the more our youths are idle, the more they involve in crime.”
On the negative impact of cheap import on local manufacturing, he said: “The industry generally is facing a lot of challenges. When you look at the paint sub-sector in the country, it is a turn-over of about $250 million (Two Hundred and Fifty Million Dollars) annually. Unfortunately, we don’t have a protectionist policy for the indigenous manufacturers. The trend over time is that you see an influx of foreign paints into the country, in the market place. Not only that, it is as good as dumping from India, China, from all over the place. They just bring in paints and flood the market; that makes it even more difficult to now say, this is the size or percentage of the market that you share; because most of the players in the industry merely trade; some of them don’t even have traceable offices and addresses. So, it is not helping the local manufacturers.
“The Paint Manufacturers Association of Nigeria has been in the vanguard of government raising duties on imported paints as a way of protecting the local players. Because, when you now reduce manufacturing to a situation whereby it is even more profitable and better for them to trade; local manufacturers might even want to close shop and begin to import and you can imagine the multiplier effect of that on the labour market. How many people can a trader employ compared to a full-fledged manufacturing company that has all strata of workforce in their employ?”
