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Nigeria Customs policy eliminates gains of backward integration, says manufacturer

January 29, 2018459 views0 comments

Manny Igbenoba, and engineer and managing director, 7T Microns Powder Limited, has told Businessamlive.com that Nigerian manufacturers engaged in sourcing local raw materials are not benefiting from such engagement because of problems created by Customs officials at the ports when additional supplementary raw materials are imported.

For instance, Igbenoba says the amount he pays to import 30 per cent of raw materials needed to complement the 70 per cent got through backwards integration, on the long run, is at par,which does not favour local entrepreneurs.
Igbenoba, a pioneer of thermoplastic road marking paints production in Nigeria said: “I can say that 70 per cent of our raw materials are sourced locally while the remaining 30 per cent are imported, but the cost of importation and delivery to the warehouse, is almost the same as the 70 per cent sourced in Nigeria. That means we are not making any headway because if the cost of bringing raw materials is high, the cost of production will also be high. So the 70 per cent sourced locally has been rendered useless.
“For example, the imported thermo plastic road marking paint is sold at about N12,500, but our final product manufactured here is sold for N11, 600. What are the enhancing factors? If we import the raw materials to produce, clearing it would be a herculean task in spite of being a member of various groups like the Manufacturers Association of Nigeria (MAN) and others”.
He told Business a.m. at an interview that the impact of ease of doing business on private sector has not been positive as the percentage of effectiveness is not up to 10 per cent.
“The ease of doing business is on mental policy, but the attitude needs to change. Nigerians are corrupt from the top to the bottom. That’s the truth. Because if the government says it is supporting the investor to have an industry here, from the local government, to state and federal governments, all that you have to pay is really frustrating. Not until the federal government says specifically what an industrialist would pay. And not until it finds a way of enforcing that and making it easier for manufacturers to get their products at the right time, then setting up an industry in Nigeria would not be effective  as people are seeing it in the papers.
“I am still emphasising it, if you have an industry in Ghana, it would not take you one week to clear your raw materials. But in Nigeria, even if you have all the documents right, you cannot clear your goods easily; it takes more than  a week,” he added.