Bag, suitcase makers invest N400bn into Nigerian economy

Manufacturers of bags and suit cases in Nigeria say they have so far invested N400 billion into the economy, attaining 85 percent technology transfer in the industry.
In a statement obtained by Real Sector Watch, the manufacturers say to encourage the viable economic sub-sector, the Federal Government should retain items on prohibition list, which include suitcases and traveling bags under the HS Codes 4202.11.90.00 – 4202.99.90.00 listed as item No. 19 on the Policy Guideline Circular No. F17146/133 of 29/11/2016.
They say raw materials or components of suitcases and travelling bags, which currently attract 10 percent import duty, should be reduced to five percent as is the case with parts for furniture, GSM and bicycle.
“This is because these components, as listed, even though are classified as either semi-finished or finished products according to their respective HS Codes, are, indeed, basic raw materials for our factories,” the statement from the manufacturers says.
They call on the government to declare a state of emergency on the petro-chemical industry to enable players source raw materials locally.
They say as at 2006, finished goods were packaged abroad but the situation has now changed as the sector is patronising local industries for nylons, cartons and other packaging materials and will continue to do so.
The manufacturers state that as at 2006, 6,000 units of 40-foot containers of imported products came into Nigeria annually at an average rate of $45,000 per container, amounting to $270,000,000 for all the units. But they say that last year, 7,200 units of 40-foot containers of locally made suitcases and bags were exported to various countries at the average rate of N16,000,000 per container, which amounted to N115.2 billion.
They say the group is targeting 10,000 containers in 2020, adding that investment and expansion in the industry will hit N500 billion in 2020 as against none in 2006.
“As at 2006, there was no local content addition in the industry, but now, we have achieved 80 percent local content in poly propylene (PP) and 50 percent in ethylene vinyl acetate (EVA) respectively. We are targeting 90-100 percent when the petro-chemical industry starts working better,” the group states.
The manufacturers point out that the sector made no contribution to the Nigeria’s GDP in 2006, but is now contributing four percent to the manufacturing sector while eyeing six percent contribution in 2020.
“In 2006, Nigeria experienced huge capital flight during importation of the finished products. However, capital flight is now stemmed and huge foreign exchange is earned in naira through informal export. We are targeting direct export by 2020,” the group says.

ODINAKA ANUDU