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  Why SMEs  cannot fly under current Ministry of  Industry, Trade and Investment 


The  Federal Ministry of Industry, Trade and Investment is responsible for diversifying the resource base of the economy by promoting trade and investment with special emphasis on increased production and export of non-oil and gas products.

It is also mandated to formulate policies that will help create wealth and employment, reduce poverty and ensure enhanced service delivery in a manner that will stimulate the growth of the domestic economy through industrialization, trade and investment.

Close to actualizing the objective was in 2007, when the then Commerce and Industry Minister, Charles Ugwuh, introduced the Cluster Concept to drive industrilisation in Nigeria.

He did not stop at the policy formulation and introduction, but practicalised the concept by involving the United Nations Industrial Development Organization (UNIDO) in  commissioning the Common Facility Centre (CFC) for shoe manufacturers in Aba, Abia State, on May 9, 2008.

The CFC, expected to boost Nigeria-made shoes to meet international standards, provided common facility with requisite modern machines needed for the production of shoes and leather products.

The Aba CFC was the first bold step to actualise the Federal Government’s new industrial strategy anchored on the cluster concept. The project was a joint initiative of UNIDO, Abia State Government, Nigerian Export Promotion Council (NEPC) and the Ministry of Commerce and Industry.

With the training of the first batch of 32 shoemakers in the state, it was estimated that the centre would meet the training needs of over 20, 000 professional shoemakers located in the famous Ariaria market, the home of Aba-made shoes.

At the commissioning, Ugwuh said: “If the centre is well managed, it will produce about N1.6 billion-worth of leather products by January 2009.”

That was the last time Nigerians heard of the project, as ministers, who came after Ugwuh, abandoned the laudable project which would have industrialsed the country and reduce unemployment.

Since then, stakeholders in the commerce, investment and indeed the real sector of the nation’s economy have witnessed the systemic collapse of the sector through negligence of the supersory body – ministry.

The ministers, who came after Ugwuh have all failed to resuscitate the Industrial Cluster Concept or formulate new policies that would boost the nation’s economy via revival of the real sector.

It would be recalled that the rapid development in Europe was through Industrial Revolution of the 18th century in Britain.

While Britain boosted its economy with industrialisation, Nigerian government has continually shown no interest it, preferring crude oil export.

The government’s disinterest in industrialisation first hit the textle industry. It collapsed as a result of negligence by the ministry.

In December 2006, Michelin Nigeria Limited shut its factory due to the harsh operating environment (infrastructural deficiency, tariff structure, etc), disposed its equipment and left after 43 years of operations in Nigeria.

On December 2008, barely six months after it scaled down production, Dunlop Nigeria Plc formally announced its decision to cease tyre manufacturing in Nigeria.

The company at its 46th Annual General Meeting (AGM) in Lagos said that it was shutting down its tyre plant pending improvements in the country’s operating environment after declaring a loss of N2 billion.

As if that was not enough,Nigeria’s biggest indigenous manufacturing company, Dangote, announced that its cement exports from Nigeria to neighbouring countries fell 41 per cent in 2019 when Nigeria’s government closed the land borders.

It also disclosed that the development has forced the dominant cement company in Africa to move its exports to Congo Republic, producing from plants in the country.

Besides, Joseph Makoju, Dangote’s outgoing chief executive, lamented that the border closure by the Nigerian government led exports to drop to 0.5 million tonnes in 2019 from 0.7 million tonnes in both 2018 and 2017. He said that the company had exported to West and Central Africa from Nigeria.

Makoju further revealed that the total production volumes last year was flat at 14.1 million tonnes. Higher discounts, marketing and haulage cost caused core profit to fall 9.1 per cent, while margins slid 59.2 per cent, he said.

“We undoubtedly faced several challenges last year,” Makoju said.

Again, the Federal Government of Nigeria has increased Value Added Tax (VAT) from five percent to 7.5 percent without considering the consequences on the few manufacturing companies and the consumers.

In all these the Federal Ministry of Industry, Trade and Investment appears not doing enough to boost the nation’s economy via non-oil sector.

When the immediate past Minister of Industry, Trade and Investment, Okechukwu Enelamah, was appointed in November 2015, the stakeholders expected much from him but were disappointed, as his tenure never brought any positive change.

Now, his successor, Otunba Adeniyi Adebayo, is following his footsteps.

No one knows his agenda on industrialization and commerce though he oversees government’s goal of economic diversification to non-oil revenue earnings.

The ministry is supposed to be leading the promotion of government’s policies of Ease of Doing Business, job creation, poverty eradication and industrialization.

But the non-implementation of policies and programmes including: Standardization of bilateral trade agreements, stimulating growth of domestic Micro, Small and Medium Enterprises (MSMEs) and lack of roadmap to increase Nigeria’s Foreign Direct Investment (FDIs) are some of the challenges of the ministry under a new minister.

The success of Charles Ugwuh in the ministry in 2007 was largely his romance with all stakeholders including various chambers of commerce and industry; businessmen and journalists.

A regular meetings with such people will enable Adebayo to have imperical knowledge of the sector.


About Editor Charles

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