Currency fluctuations and Nigerian made products: Time to lead by example

Events in the foreign exchange market have given Nigerians no cause for celebration. The global glut in the oil market caused by the massive incursion of the American Oil industry as a major player in the global oil market has brought about a sharp decline in the cost per barrel of Nigeria’s biggest export, from around $120 per barrel to as low about $40 per barrel. What this means is that Nigeria’s output has dramatically reduced in comparison with the volume of import which has remained steady. The consequence of this is the resultant reduction in the value of the Naira. The Nigerian government and the Central Bank of Nigeria, CBN, have put in place measures to ensure that, at least officially, the value of the Naira has stayed at around N200 to the Dollar. This regulation has not affected the black market, where the rates had gone up to N400 to the Dollar and currently sits at around N320 to the Dollar. While it is obvious to some that the current situation where the government is subsidizing the currency is not sustainable, another school of thought believes that the government has to continue to put up stop gap measures until a permanent solution is found.

Economics experts in the country have had a field day trying to explain the situation and to proffer their own unique solutions. It seems that every expert has his or her own take on what should be done to reverse this trend. One common solution that has been proffered by many experts is simply to increase internal production and reduce dependence on imported goods. This will spur growth internally, increase exports and make our currency more robust. There have been several attempts by many notable Nigerians to encourage people to follow this trend and embark on a sort of Nigerian product revolution. Nigerians have used social media hashtags like #BuyNigerianToGrowTheNaira as a means of pushing the idea of buying Nigerian.

However, while some youth have accepted the message, others seem completely uninterested. But then, why would any sane person disagree with this? What argument could any right-thinking patriotic Nigerian have against buying made-in-Nigeria goods to help salvage the economy of the country? The answer to this is that consumers care first about the quality of goods and services they pay their hard earned money for. Quality and customer satisfaction cannot be sacrificed on the altar of patriotism. The argument for quality first is something that needs to be addressed. While Nigeria has the capacity to become a major industrial player in the West-African sub-region and indeed in Africa as a whole, there is still a need to seriously address the gap in quality between what is obtainable locally and what comes in from abroad.

Branding and marketing also need to be improved. Many Nigerian producers are not yet bold enough to display the “Made in Nigeria” tag on their products. They prefer to attach the labels of more respected international brands. Some critics also argue that goods made locally are of a lower standard of craft and do not last as long as foreign made goods. The result is that many manufacturers have not been able to place their locally made products in the minds of consumers as top quality brands.

The government can also be said to be contributing to this lack of confidence in Nigerian made goods. It is generally believed that the government sources most of its own day to day consumables from outside the country. From toiletries to furniture to assorted cuisine and wines, the government, at all levels is seen to generally patronize imported goods. Individual government officials are also perceived to be lavish importers of expensive foreign cars, jewelry and other luxury goods. The penchant for government officials to fly abroad for treatment for even the most common illnesses has also been counted as another point against them. Whether this perception is accurate or not, the fact is that it exists, and for members of government to be taken seriously in their campaign for Made in Nigeria Goods, they have to be seen to be at the forefront of the revolution.  So, aside from providing an enabling environment for businesses to prosper through the provision of infrastructure and security, the government must be seen to be patronizing made-in-Nigeria goods as a matter of choice except when it is absolutely necessary to use imported goods.  How is this possible? Here are some suggestions.

Firstly, the government must commit to outright banning of products that can be produced abundantly within the country. While this may seem harsh, it is the only true way to encourage local production. Also, while it is true that some imported goods are actually cheaper than the locally produced ones, it is generally believed that the multiplication of local producers within the country will foster healthy competition that will see prices reduce and quality improve. Government can also play a regulatory role in ensuring that the quality of the locally made goods matches up to international standards. This will no doubt be controversial and have its critics, but the government must stick to its guns. The government should also give local manufacturers like Xinox and Innoson vehicles a try on a large scale to prove to the average Nigerian that they are serious about the “buy made-in-Nigeria” campaign.

Secondly, Government and Government agencies must commit to patronizing local service providers. For instance, local healthcare providers should be patronized except in serious cases where facilities and expertise for treating such cases cannot be accessed within the country. The habit of flying out of the country for vacations should also be reduced. Resort and relaxation facilities are fully available in Nigeria and should be patronized exclusively. This may sound harsh, but how else are our authorities going to demonstrate to Nigerians that our goods and services are functional and world class? Why should our leaders expect us to use products that they deem unsuitable for their own personal use?

Thirdly, the government needs to play a more strategic role in raising product standards. On one end, it can do this by embarking on massive programs to enlighten local craftsmen and manufacturers about ways to boost productivity and improve quality. It is clear that these manufacturers have the basic skills and knowledge but need support to raise their level to international standards. Incentives such as tax and tariff reduction can also be given to local manufacturers to enable them to start and run their businesses effectively. Buying Nigerian, however, should not come at the expense of enjoying one’s money’s worth. There must be efforts to ensure that both objectives are met simultaneously and the Nigerian government and its officials must spearhead these efforts. Anything other than that will make the campaign to continue to be seen as an exercise in hypocrisy.

Fourthly, there should be a concerted export promotion drive. Nigerian business owners need to adjust their outlook on the current situation. Crisis situations can sometimes provide opportunities that can be taken advantage of for profit. In the current situation, a higher value of foreign exchange means that any amount of value that can be provided for people in Europe or America can yield higher profits. Businessmen and women should be thinking of ways to provide goods and services that are needed by those overseas. The question to ask is; what is unique about Nigeria that people outside the country will be willing to pay for? Apart from oil, Nigeria is rich in other mineral resources such as gold and iron ore; tin and bauxite etcetera. Investing in the mining and export of these types of products can turn the disadvantage into an advantage. Also, agricultural products like rubber and cocoa will always be in demand abroad. Smart businesses would be wise to invest somewhere along the value chain to reap benefits. There is also an opportunity for Nigerians to show the world things that are unique to our culture in exchange for money. Music, movies, fashion and art are areas where the world seems to look to Nigeria for leadership in the 21st century. There are virgin lands that can be invested in for foreign exchange. In all this, the government still needs to provide support and policy guidelines for the initiative to be successful. The government still has to show leadership by brokering relationships between Nigeria and its potential partners and customers overseas.

American author, Henry David Thoreau once said that; “If you would convince a man that he does wrong, do right. But do not care to convince him. Men will believe what they see. Let them see”. It is high time Nigerian leaders stopped telling the people what they are doing wrong and what they should be doing right.  Rather, they should actually be a shining example of how to do things the right way. Those in leadership positions need to take it up as a challenge to live up to the values they try to enforce on the populace. This goes beyond buying Nigerian. It includes living within the tenets of the law just as every other Nigerian. If the Government and Government officials expect Nigerians to bear the brunt of possible increases in price and to live with the reduction in the quality of goods and services they have grown accustomed to, they must also be ready to live within the guidelines they have set for others.

MUNA ONUZO