•••As firms lay off workers
FLORENCE UDOH, Assistant News Editor
IT is indeed lamentations for Nigeria’s manufacturers on President Muhammadu Buhari first year anniversary as the administration appeared to have failed to make critical structural changes considered necessary for the transformation of the country into the economic giant it is reputed to be.
Today, the sector remains structurally weak and basic industries such as aluminum and iron and steel are not fully in place. The technological base for manufacturing is lacking in the sectors. The skilled manpower necessary to guarantee competitiveness in today’s dynamic and globalised world is insufficient. Systemic issues of infrastructure, mostly related to power and transport, have led to escalating costs and non-competitive operations.
Some manufacturers, who spoke with Daily CHAMPION, lamented the rapid decline in industrial activities in Nigeria and increasing number of manufacturing entities closing shops.
They described the present situation as the worst for industrial sector in the country as over 300 industries have totally collapsed.
The manufacturers also called on the President to look critically at all factors militating against the establishment, survival and growth of the industrial sector of the economy, including lack of access to funds, poor electricity supply, poor transportation network, unbridled importation of goods that can be made locally, excessive taxation, and overbearing regulation.
But according to the Managing Director of Stella Com. Limited, Mr. Ikpong Umoh, Nigeria’s manufacturing sector is yet to find a lasting solution to its various structural problems, resulting in a slow growth rate in terms of output and exports, low level of investment, high concentration of manufacturing industries in certain areas, resulting to uneven development, technical inefficiencies, poor quality of products, and low level of research and development activities which are necessary to be put on positive directions for successful implementation of the country’s transformation plan.
Umoh, who also the Vice Chairman of the Toiletries & Cosmetics manufacturing Group under the aegis of Manufacturers Association of Nigeria (MAN), said the manufacturing sector was greatly affected by government’s policy inconsistency within one year of this regime.
“Of course, the manufacturers made a lot of losses in the investment portfolio which resulted to low income to most of them,” he explained.
He noted, it is well known thing that investment in manufacturing requires long range planning which can only work well with stable and consistent policies.
One of Fad selling points of Muhammadu Buhari’s campaign promises was employment generation for the unemployed, mostly the youths, who form over 50 percent of the nation’s population. According to the National Bureau of Statistics in its 2012 national youth survey report; youths of working age, in the age bracket of 15 to 35 years are nearly 70 million persons in a population of 166 million Nigerians; of these youths 54 per cent were unemployed then. The Central Bank of Nigeria (CBN), reports in 2014 showed that the figure had risen to 80 per cent. The nation’s population is also reported to be over 170 million.
However, one year into the present administration, it is not just bad enough that significant jobs have not been created, rather millions of jobs have been lost and still counting , thereby swelling the statistics.
It would be an understatement to say that Nigerians, most especially the working class, are facing serious hardship amidst the current economic challenges. In the last one year, with millions of job loss and still counting as a result of skeletal production or outright closure of companies due to the Federal Government policy on restriction of foreign exchange for 41 raw materials, high cost of living, poor wages, further deterioration of power supply with high tariffs, persistent fuel crisis with the new pump price of petroleum of N145 per litre, workers indeed are the endangered species.
Although in reaction to this, and before the present nationwide strike in protest of the hike in price of petrol by the Nigeria Labour Congress (NLC), the Organised Labour had decided to hold a one-day nationwide protest along with a warning strike to draw the attention of the Federal Government to the innumerable hardship conditions workers and Nigerians in general are facing.
It could be recalled that the CBN had in a circular dated June 23, 2015, stated that the policy, restricting allocation of forex to some locally produced raw materials would help to conserve foreign reserves and facilitate the resuscitation of domestic industries as well as generate employment.
But the present scenario in the country is clearly the reverse as earlier predictions in the year by stakeholders across different sectors of imminent job loss, low productivity, under capacity among others have now become a reality.
The Lagos Chamber of Commerce and Industry (LCCI), at the inception of the policy had warned that most manufacturers might be forced to shut down and move their operations to neighbouring countries due to their inability to access foreign exchange for raw materials and other critical inputs.
The Chamber specifically had said then that one of the downside of the policy was that it could lead to massive job losses, as an estimated 40, 000 Nigerians in the manufacturing sector may be laid off.
But this may have been underestimated, as operators in the food sector, which is most hit by the policy, revealed that over two million jobs may have already gone in the sector.
The Manufacturers Association of Nigeria (MAN) early in the year predicted that towards the end of the first quarter many of its members would close shops, if the present situation prevailed.
The MAN President, Frank Jacobs, then equally warned that unless government devised a way of making the scarce foreign exchange available to the manufacturers that need them for their raw materials, Nigeria’s economy might be heading to a shambles in relation to the real sector.
He had said that some of the MAN members might have closed their factories and laid off a lot of workers and some of them have as many as 500 workers. The implication, he warned, might be disastrous in a country that has no social security.
His prediction then that prices of commodity would soar for companies whose raw materials were not under restriction, but all the same could not get forex, and has to resort to parallel market has already come to pass, as prices of commodities have gone up with the dollar exchanging for as much as N360 in the black market.
The Nigeria Employers Consultative Association (NECA) also confirmed that there has been mass retrenchment going on all across the sectors.
“The human beings will have to be sent home, and that is exactly what is happening all across our sectors, on the account of the fact that we are still import dependent, and if these businesses cannot access foreign exchange to bring in raw materials or machine components or even import machines to expand their operations, they have to do the needful in terms of cutting down on their expenses and those expenses, include salary that are paid to workers”, the NECA Director General, Segun Oshinowo had said.
Sectors mass retrenchment
Manufacturing sector using crude palm oil as raw material in their daily production of goods like biscuits, noodles and cosmetics are already cutting down on production, while the food sector generally have commenced massive downsizing of its workforce.
Organised Labour confirmed that employers had commenced redundancy discussion with the union to forestall industrial crisis.
So far, the National Union of Food Beverage and Tobacco Employees (NUFBTE), said Floor Mill in January this year sacked 800 workers, Seven-Up Bottling Company axed 150 workers, Cadbury, 40 workers, La casera, 150, while WAMCO sent 40 homes under a ploy, calling for voluntary retirement for workers with 16 years in service or above 50 years.
Other companies presently negotiating with the union include Nigeria Bottling Company (NBC), makers of Coca Cola, B Cola, while Vital Products and other makers of tomato paste, about 10 of them have already shut down due to lack of raw material.
The national president of the union, Lateef Oyelekan, lamenting the ordeal said the sector could provide employment for over 10 million Nigerians if operating in full capacity.
The story is not different in the chemical sector, whose leadership said it had gotten about 10 letters from the companies signifying interest to downsize.
The President of the National Union of Chemical Footwear, Rubber, Leather and Non-Metallic Products Employees (NUCFRLANMPE), Boniface Isok, said another downsize in the sector would amount to total closure.
“Before now, there have been series of downsizing and some of these companies presently have about 200 staff and this time around they’ve signified that they want to do 80 per cent, that is like closing down,” he said.