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Buy Made-in-Nigeria campaign.

  • Posted by: Center for Social Justice

The buy Made-in-Nigeria campaign championed by the leadership of the executive and legislative arms of the Federal Government is a step in the right direction. It is a welcome development particularly now that the country is faced with a lot of economic challenges which demand urgent action for resolutions. The challenges include high unemployment, low capacity utilisation in industries, soaring double digit inflation, increased inequality and poverty, lowered standards of living and depleted foreign reserves as well as scarcity of foreign exchange to import goods and services.

The campaign deserves the support of every reasonable and discerning Nigerian because it is in our collective interest that it succeeds. It is clear that this campaign was motivated by our battered economy which can no longer sustain our unthinking and unreasonable lifestyles. Even though the economic recession impacted negatively on the average Nigerian, it will be a blessing in disguise if it leads us to the utilisation and harnessing of the advantages and opportunities of the buy Made-in-Nigeria campaign.

The likely benefits that will accrue from the success of the campaign are legion. Understanding these benefits and discussing them in an empirical manner will facilitate governmental, private sector and civil societal action in support of the campaign.  For Nigerian-made goods or services procured and used, existing jobs in the economy are protected and new jobs will likely be created, especially when the demand for the products exceeds the existing capacity of the producers. Increased capacity utilization or expansion of production and services will require more hands which reduces the army of the Nigerian unemployed.  In other words, business agents and producers of goods and services require patronage to continue to be in business. Every foreign product bought or imported is a vote for jobs in the foreign lands of origin of the products, goods or services. It appears that the majority of Nigerians, across all political, religious, ethnic or other divides are agreed that we need to grow jobs in the economy.

With more Nigerians in jobs through patronage of Made-in-Nigeria goods and services, inequality will be reduced. Ability to earn a decent and living wage or income; access to basics including education, health, housing and food increases economic participation and reduces inequality in the system.  Also, the standard of living of the average Nigerian will likely increase through meaningful participation in economic life.  A good part of the local production of goods and services is in the informal sector including the poor and not so rich, whose critical contribution to the economy has not been fully recognized. This is very cognisable in the agriculture, crafts, shoes, dresses, etc. subsectors of our economy. Thus, the campaign provides an opportunity to formalise the informal sector, provide access to credit to small and medium scale producers and create opportunities for enhanced economic growth.

We have witnessed a situation in the last 18 months where the pressure on our foreign reserves has outpaced our ability to earn foreign currency. In essence, we are no longer in a position to pay for goods and services which we took for granted a couple of years ago. The ensuing scarcity of foreign exchange has reduced the value of the naira which is our national currency to the extent that it has lost not less than 100 per cent of its original value. Factories that depend on foreign raw materials and inputs have either closed down or reduced their production due to the inability to source foreign exchange. This has led to job losses, increased poverty for the retrenched or workers who are owed several arrears of salaries. It has also diminished the profitability profitability of the companies leading to reduced income which would have been the subject of corporate taxation. In essence, it has reduced the revenue available to government from personal income and corporate taxation respectively.

But there is an alternative which is to buy goods and services made in Nigeria and with a high local content instead of waiting for the very costly foreign options.  With reduced demand for foreign goods and services and greater demand for local ones, we will reduce the pressure on the foreign reserves and over time, improve the value of the naira as the demand for foreign exchange attunes to the reality of the improved production in Nigeria. This leads to increased retention capacity of Nigerian capital in Nigeria. The idea that most capital expenditure in the public and private sectors end up dissipated as an outflow, out of the country cannot encourage economic growth and development. Rather, it will guarantee in perpetuity our status as a backwater under developed economy. Thus, buying made in Nigerian goods and services is a win-win for everyone in the economy.

A good part of the inflationary spiral in Nigeria stems from goods and services denominated in foreign currency coming into the country at a time the naira is fast losing value. A product coming into the country at a time one United States dollar exchanged for less than N200 will definitely double its price now that the same currency is about N400. This will not necessarily be so for goods and services with a heavy dose of local content in terms of raw materials and other inputs. Thus, patronising made in Nigeria goods and services will in the medium term, reduce the inflationary spiral as imported inflation will be curtailed.

It is therefore within this context that it is posited that government’s economic policies and campaigns are best implemented through the annual budget in the policy, plan and budget continuum. One is therefore taken aback by provisions in the 2017 federal budget estimates that run contrary to the tenets of this campaign. A few examples are imperative. In the State House, there are provisions for purchase of 3 nos 16-seater Hiace Buses (phased replacement) in the sum of N43.2m; purchase of 3 nos Toyota SUVs for N100.8m; purchase of 3 nos 33-seater Coaster Buses (phased replacement) for N54m. Again, in the Bureau of Public Enterprises, there is a provision for purchase of two Toyota Corola vehicles for project monitoring. These provisions raise the poser; how can a government that is championing the patronage of Made in Nigeria be the one to specifically request particular foreign brands. This is the kind of conduct that lays the foundation for policy failure. When Nigerians witness mere lip-service to a particular policy, you can be sure that the policy will fail. Beyond the Made-in-Nigeria campaign, it is faulty under the Public Procurement Act for an agency to state the specific brand and model it requires in the budget. This will limit competition as the agency, once the budget is approved, sees itself under obligation to buy a particular brand. Essentially, there are other vehicle brands that can serve the same purpose including Made-in-Nigeria ones and there is no proof that the purpose will be better served by the brands named in the budget estimates. This practice is procurement rigging and it is totally unacceptable under our law.

Government through the MDAs, as the largest buyer of goods and services in the economy should lead by example and ensure patronage of Nigerian made goods and services, not only in the automobile industry but across board.

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Author: Center for Social Justice

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