MAN advocates local patronage, incentives for backward integration

Beyond the imposition of restrictions by the Central Bank of Nigeria (CBN) on food and other commodities, the Manufacturers Association of Nigeria (MAN) has advocated the need to support patronage of local products and incentivize operators investing in backward integration.

According to the manufacturers, while the government’s initiative on food sufficiency is laudable and supported by local operators, patronage of made-in-Nigeria products should be encouraged, while smuggling should also be checked.

MAN in its position on the recent directive by President Muhammadu Buhari to the CBN on food importation said the association actively supports resource-based industrialization, and this is based on our position that we should significantly improve our local sourcing of raw materials and develop sustainable value chains.

It, however, raised concerns that close examination of the directive reveals that it is broad and would have to be both specific and targeted, noting that these should also be strategic implementation to achieve the purpose intended by the government.

Though laudable, MAN noted that clarity is needed and stakeholders have to be deliberate and strategic in pursuing such a far-reaching monetary measure, especially in the light of the nation’s vulnerability occasioned by trade agreements that require the country to be more open to imports and the well-known antics of neighboring countries.

“For instance, we need to know what type of food, finished and ready-to-eat or as input for further processing? In the case of the latter (in particular), we need to know the local capacity available compared to national demand and if not adequate, creditably determine what time and resources are needed to ramp up capacity and production.

“It is pertinent to pre-determine these suggestions as part of the implementation strategy. To achieve sustainable self-sufficiency, local producers ought to be incentivized otherwise we may be inviting a looming barrage of smuggling activities.

“Clearly the objective of Mr. President is noble. The directive, we understand is aimed at consolidating the progress made towards food sufficiency, conserving our foreign exchange and encouraging consumption of locally produced food”, MAN said.

MAN’s position, which was made available by the Director-General, Segun Ajayi-Kadir stated that value addition to products creates more jobs and wealth for the Nation.

“Our mantra is clearly harped on the patronage of made in Nigeria products as we believe the country can only experience development when we buy what we produce and produce what we consume. On several occasions, we have engaged the government to provide support for local manufacturers who have embraced backward integration in the course of manufacturing with records revealing the positive impact on the agricultural sector.

“Without mincing words, MAN is for local sourcing of raw materials and production, patronage of locally produced goods and the general growth and development of the manufacturing sector of the country”, he added.

On the apex bank’s autonomy, MAN described the directive as an expression of Mr. President’s mindset.

“We are sure Mr President is aware of the independence of the CBN and that such policies may be counterproductive if implemented by fiat, without ensuring necessary alignment with the fiscal policy and other economic policy initiatives of this administration. The necessary support that would sustain the “steady progress in agricultural production” and the attainment of “full food security”, for instance, would have to be considered. On the matter at hand, what is needed is clarity.

“The Apex bank will have to do an assessment of where we are in practical terms and realistically weigh its options before embarking on such a far-reaching policy. There should also be a process to be followed before such a plan is unfolded. On an issue as critical as this, a unilateral decision could be counterproductive when the operators are not duly consulted. We must consider the state of our infrastructure and its capacity to respond and support the policy”, Ajayi-Kadir added.

 

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