‘Implementation of patronage policy will assist manufacturers out of recession’
In a bid to check the unintended effects of economic recession on the real sector, especially among manufacturers, operators have urged the Federal Government to ensure the implementation of the patronage policy.
Such efforts will assist local producers reduce their inventories, improve their turnaround time and also aid the repayment of various loans that have been sourced for manufacturing.
Indeed, latest data from the Manufacturers Association of Nigeria (MAN) showed that productivity in the real sector was grossly undermined as manufacturers were not able to optimize their production capacity following their inability to import requisite raw-materials that are not locally available.
With increased unsold inventory, operators say job losses remain imminent alongside the potential shut down of factories if trend continues, as the growth of unsold Inventory of manufactured goods in the sector stood at 16.14 per cent in 2016 from 13.7 per cent recorded in 2015.
Managing Director of Crown Natures Nigeria Plc., a textile and apparel outfit, Mrs. Omolara Aromolaran decried non-patronage of locally produced goods, especially by ministries, departments and agencies of government even when they meet international standards.
According to her, the inability to sell produced goods has led to operators incurring huge operating costs while the turnaround time has continued to expand.
“If you are running on a loan, you would have defaulted already due to goods that are yet to be sold. Loans are being used to repay loans. DFIs are operating like commercial banks in terms of loan recovery. The business is in a bad shape as capital is sitting down.
“Patronage policy needs to be implemented for industries to survive. Government parastatals don’t buy even from projects sponsored by them. Funding an industry is an issue but buying from the businesses that they have funded is also an issue.
“If the trend continues, jobs would be reduced. The volume of available stocks will determine the amount of labour needed. Every company has a projection and many of these projections are being extended. Government has tried but not really done anything in the real sense of it. The economy needs to be buoyant for operators to survive”, she added.
Corroborating this view, the Chartered Institute of Purchasing and Supply Management of Nigeria (CIPSMN) expressed worries over the weak public procurement practices especially in federal ministries.
The president of the institute, Diekola Oyewo, said: “Bureau of Public Procurement (BPP) is weak and we are ready to train people to become professionals in procurement services. Procurement professionals prevent corruption at no cost and it is better not to fight corruption because it is very expensive to combat. We believe the present administration has the political will to change the weak nature of the industry”.
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