…As poor market access limits MSMEs’ potential
Nigeria’s goal of achieving the ‘Go Local’ vision, which prioritises locally-made products over imported ones, is hard hit by high logistics and energy costs.
This was echoed at the gathering of manufacturers in Lagos on Tuesday at BusinessDay’s Go Local Summit, themed, ‘Go Local: From Raw Material to Market Power’.
At a power-packed panel session, manufacturers decried the impact of bottlenecks stifling market access. They also flagged unnecessary customs levies, insufficient government support, and rising energy costs incurred in production.
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Seromume Ikogho, founder of Detail Africa Group, a fashion brand, said that while it is the dream of every manufacturer to upscale, market access to raw materials as well as transportation to consumers has been a huge challenge in achieving the Go Local dream.
“Logistics is a very big issue still, both from the supply and purchase side,” he said. “It is very interesting that logistics within Africa are more expensive than outside the continent. I find that very surprising.”
According to him, upscaling and preserving Nigeria’s indigenous heritage do not go hand in hand.
For Ikogho, if Nigeria is to become a global brand that can compete in international markets, bottlenecks around market access must be resolved.
“Nigeria is not ready for ready-made brands because access to raw materials is challenging unless one is into backward integration,” he said.
For decades, market access has continued to hold manufacturers back from upscaling and moving beyond the small and medium scale business level.
Amit Bose, chief financial officer at Valency Agro Nigeria Limited, an agribusiness company, noted that several manufacturers expend huge costs on energy owing to the country’s epileptic power supply.
This prevents manufacturers from upscaling and drives additional cost on finished goods, he said.
“Some of the local challenges that you see in Nigeria are high energy costs and inconsistent power supply. According to reports, Nigeria has one of the highest energy costs,” he said, adding that power supply from the grid is not consistent as many manufacturers either operate on diesel or gas generators.
Data shows that manufacturers’ total expenditure on alternative energy sources surged by 42.3 percent to N1.11 trillion in 2024 from N781.68 billion in 2023, painting a clearer picture of how energy costs are stalling expansion in the industry.
Uche Nnaji, founder and creative director of OUCH Lifestyle Brand, a clothing fashion brand, called for private-public partnerships in ensuring that the Go Local dream is achieved.
Nnaji said there are two kinds of nations – Jacob and Esau – two biblical characters. And according to him, Nigeria belongs to the Esau group, which always waits for others to produce and then imports.
“As we preach ‘Go Local,’ we must be willing to go beyond being an Esau nation that waits for its borders to be open to import everything,” he said.
Stressing authenticity as a key foundation in upholding the ‘Go Local’ dream, Flora Mbeledeogu, founder of Made in Africa Brand Ambassador (MABA), a fashion brand that produces bags and shoes, shared how at the beginning of her business, she was advised to add a ‘made in Italy’ signage to her brand for them to be preferred in markets.
Her refusal to do that has come with more gains than regrets.
“The musicians who have remained authentic with the Nigerian brand have shown longevity in business compared to those who did not.”
Ayoola Oduntan, GMD, Amo Farm Sieberer Hatchery Limited, reiterated the essence of authenticity. “The reason why our products have gone global is because we did not try to be something else.”
According to him, Nigeria has become a brand owing to the dynamic resilience of the Nigerian people.
“The power and our wealth come from empowering farmers. Nigeria must go local. This is the source of our wealth,” said Oduntan.
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Poor market access limits MSMEs’ potential
Similarly, Olubunmi Dawodu, Lagos State manager at the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), emphasised that Nigerian economy suffers as several micro, small and medium enterprises (MSMEs) operate at the fraction of their potential due to lack of market access, skills or creativity.
“Nigerian entrepreneurs are among the most resourceful in the world, not because they lack creativity. Our fashion, our music, our technology, our innovation are celebrated globally.”
He emphasised that these entrepreneurs operate below capacity because of poor market access and local demand. “We have textile manufacturers in Kano with machines running at 30 percent capacity. We have leather goods producers in Aba compelled competing with counterfeits from abroad,” he noted.
Dawodu reiterated that MSMEs need to build tech solutions that foreign apps cannot understand. Besides, he encouraged Nigerians to patronise made-in-Nigeria goods and services to boost the country’s GDP.
“When you spend N1,000 on an imported product, that money leaves our economy. It supports jobs elsewhere; it strengthens another country’s currency, and it contributes to another nation’s GDP. But when you spend that N1,000 on local products or locally-made products, the manufacturers earn revenue.
“They pay their workers. Those workers buy food from local farmers. These farmers then send their children to school, and the school employs teachers. The teachers patronise local businesses, and the cycle continues,” he said.
