Government can grow economy by strengthening the manufacturing sector —MAN President

WHAT is the purpose of your visit to British American Tobacco factory in Ibadan?

I am here for obvious reasons, and just as you know, it is not quite long I assumed office as president of Manufacturers Association of Nigeria (MAN). Shortly after assuming office, the first thing, of course, is to get acquainted with our members, interact and get to know them. It is important to understand what their needs, concerns and plans are going forward, so that MAN can represent their interest and make sure, through our advocacy efforts, we do as much as we can to promote those interests. Since British American Tobacco Nigeria (BATN) is a key member of our association, this is part of series of visits we are making to ascertain where the industry is and where it is going and what are the things, we, as an association and a platform for coordinating and pushing the interest of the industry, should be doing over the next three or four years.

What is your assessment of British American Tobacco Nigeria?

“First and foremost, I’m extremely impressed by the company, its operations especially its relations with its staff, understanding of its position in the industry and in the economy and its long history over the several years it has been in Nigeria. I’m happy that it’s making the kind of contribution that industries should be making, and I think that one of the goals of MAN and of course, the Nigerian government, is to grow the industry through expanding the manufacturing business, strengthening the manufacturing business and therefore creating the quality jobs that we see that are taking place here.

What new ideasare you bringing to consolidate the effort of MAN?

Well, it is not particularly about what new idea we have, but about how we can build on what has already been achieved. I think that is something every person who has followed the MAN history will do to try and carry forward and improve on what has already been achieved. Of course, MAN has made tremendous progress in creating a platform to support government’s policies with regards to the manufacturing sector of our economy.  Our key goal is to continue to grow the sector. As you are aware, the current level of contribution of the sector to the economy is nine to 10 per cent of the GDP. I think given the resources of this economy the manufacturing sector should be doing a lot more than that. I think this is one of the key concerns that the association will continue to pursue.

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What are the hindrances that have slowed down MAN from reaching its optimum?

First of all, the operating environment has to continue to be conducive and supportive for improved performance of the sector.  We are all aware of the issue that power-infrastructure is causing. The fact that it is making it more difficult for companies like BAT to compete with their peers outside, largely because they have to literally build their own infrastructure; that is power supply, water supply, road  network, among others. Secondly, there are other major infrastructural issues like the ports, which seriously impede economic activities, particularly companies that engage in import and export who are worse hit by it. So, working together to ensure that government remains focused on the development, expansion and improvement of infrastructure service is one of the critical areas that our association will continue to pursue.

We have about five ports in Nigeria, and only two are functional in Lagos. Do you advocate that other ports should come on stream to help your members outside Lagos?

For a country of our size, one port is obviously inefficient. It’s just not enough. We need to improve the current facility – the Apapa Ports, and also begin to improve the alternative ports outside Lagos and create new ports. Obviously, this economy is growing, albeit at a low rate of about 2.3. At the current level, we ought to have at least two or more ports already existing to support the level of development. So, there is a need for improvement in existing facilities, improvement of existing ports but also creating new port facilities.

One of the challenges your members face is the sourcing of forex to enhance their jobs/ production. How has it been and how is MAN proposing to the government, especially with regards to manufacturing?

MAN has been engaging government and CBN on forex for a long time before this administration came in. And to be honest we are making some progress. There are windows created for manufacturers which have been helpful, but not all that adequate. However, I think the key thing one can say is that at least for some time now there has been some level of stability in the Forex rate. Clearly, more needs to be done because the demand is increasing but obviously in excess of supply. The CBN has tried to identify various limits to the availability of forex in the system. The system is improving but we expect that it will continue to improve with regards to access to forex and the stability of the rate. In that area, we must continue to work with the government to ensure that we sustain the operations of our members.

What is your advice for the new government?

I hope that it is a continuation of the same administration where over the last three years we have managed to get some policy positions and some strategies that appear to be working remain focused on the development of infrastructure. We have to continue to be innovative because the demand for infrastructure in this country, far exceed the capacity the government provides. So it’s important for us to start looking for new approaches to providing better infrastructure and services including the partnership with private sector entities which we started. The overall effort to continue to improve the business environment needs to be sustained. A good example is the presidential Enabling Business Environment Council (PEBEC) which was set up two year ago. We have already seen some improvements in the position of the country in terms of the ranking both in the World Bank and the ease of doing business and what the world economic forum said about competitiveness. I think we are not yet where we should be. If indeed Africa is contemplating to open up to trade, in terms of the African operating agreement, Nigeria has tremendous opportunity if it can improve its competitiveness, investment planning and create incentives for great investment and expansion of the manufacturing sector.

 What is capacity utilisation like?

At the moment, it is 50 to 60 per cent. If we can increase the capacity utilisation by 30 per cent, the amount of the new jobs you can create almost immediately will be enormous and if you want to create same number of jobs by bringing in new investors, it will take up to three years. There is huge advantage in assisting the existing investors and manufacturers because that immediately translates into products as well as more goods and services. It may even have some impact on inflation.