‘Manufacturing exporters are determined to diversify Nigerian economy’
TUNDE OYELOLA is the chairman of the Manufacturers Association of Nigeria Export Group (MANEG). He is also the vice-chairman of PZ Cussons Nigeria plc. In this interview with ODINAKA ANUDU, he speaks on the general state of the manufacturing export sector of the Nigerian economy and other cross-border issues. Excerpts:
How do manufacturers benefit from MANEG?
We protect the interests of manufacturers who are in export business. We look at the problems affecting exports and liaise with the government to solve them. We are all members of MAN and are an advocacy group, seeking to protect the interest of Nigerian exporters.
The Common External Tariff (CET) regime began on January 1, 2014. Do you foresee challenges?
The good thing is that we will have a common tariff, which will help us a lot. If you have different tariffs, you encourage smuggling. But if you have the same tariff, why should you have a problem in Togo or Benin Republic? The ECOWAS Trade Liberalisation Scheme (ETLS) will have zero duty. Another good thing is that it is the first step towards unified customs. So, I see more opportunities than challenges. We have almost 170 million people; we have the oil; we have manufacturing here, so we will stand to gain more. There are 360 million people in the region, meaning we have a very big market. Nigeria is well-placed because between 60 and 70 percent of factories in the sub-region are here.
The Export Expansion Grant scheme, which seems to be the only assistance given to manufacturing exporters, has been on suspension for over nine months now. The co-ordinating minister for the economy once said the scheme was under review, given that the previous regime was unsustainable.
What is the solution to the series of suspensions the scheme has suffered?
The solution is that there should not be interference. All countries in the world – China, South Africa, Brazil, name them – support exports. Government has to support exports, whether you call it EEG or whatever. Brazil’s exports increased tremendously with the EEG. For Nigeria, non-oil exports increased from about $600 million to $2.5 billion between 2002 and 2013, when the regime was on. People are looking at EEG but nobody has said how much dollars it has brought to our economy. It is not free money, because you cannot get it if, as an exporter, you cannot repatriate money. If I export goods worth $200 million, I have to repatriate the money through my bank and get the certificate from the Central Bank of Nigeria, and out of that, government gives me 30 percent. It is this 30 percent that is talked out. Of course you have to re-invest the 30 percent because you need to expand your operations. But the problem is that between 2005 and now, the scheme has been interrupted eight times. We are manufacturers and we factor in this 30 percent we get into our pricing. If I sell soap in Liberia without EEG, nobody will buy it, because when you get there you see soap from Turkey, China and other countries which are cheaper. But with EEG, you will say, if these people sell at $10, I will also sell at $10. So with this scheme, volumes of exports have risen and more employment created because manufacturing exporters have expanded operations. We look at the cost of the scheme without looking at positive things it has done for the Nigerian economy.
Does it mean you manufacturing exporters cannot run your businesses without the EEG?
That is what I am saying. All over the world, nobody does. You are going to another country. Without EEG, you can export, but at what volume? Can you ever compete with others when your prices are eventually higher in the international market?
Are you satisfied with the government’s temporary rejection of the Economic Partnership Agreement (EPA)?
Yes, we have some items that we are not satisfied with. EPA can only benefit Nigeria if we are able to export. This is why we say that the government has to find a way of giving more incentives to exporters. In EPA, Europe says they will open their door to ECOWAS on a 75 percent basis, and the region will open its on 75 percent basis too. But what do we have to export? Nothing, compared with Europe. You cannot open your market to those you are not equal to. This is why Nigeria must look at research, packaging and other issues. If we do that, Europeans will come here and set up industries and produce instead of importing to our markets. We do not have the transport, so how can we get to them?
What other hurdles do manufacturing exporters face?
There are lots of non-tariff barriers. You see, we had a meeting in Ghana and while we were discussing, something caught my attention. One of our members said his container stayed at Aflawo border for over 48 hours. The minister of trade and industry in Ghana stood up and said, ‘I am speaking on behalf of the president of Ghana. If we get this type of report again, we will sack the customs boss.’ And he said he would go by taxi to ascertain what was happening.
You see that? If you keep bringing in goods from other countries, you simply import poverty because importers will multiply this cost and Nigerians will pay.
We planned to go to Liberia in June last year then and put goods in Apapa ports. We got to Liberia but the goods were still here. So, we did not make any impact. This is a hurdle we face at the ports. We need to build railway. We have started the sea link within ECOWAS through the Nigerian Export-Import Bank (NEXIM), which raised over $60 million. In Burkina Faso, people are looking for ‘bathroom slippers’ but there are hurdles for people who wish to export.
If you check Europe, you find out that they have train services between countries – very fast trains. We tell the government of the need to develop logistics because no country can isolate itself, believing it is developing trade.