THE MADE IN NIGERIA GOOD CAMPAIGN AND MY COMMON SENSE FOR THE GOVERNMENT - TUNDE ADENUGA

The on going campaign for made in Nigeria goods especially from the political class seems like a good development especially in saving the Naira but unfortunately something seems to be missing in the campaign especially on how to go about it. Firstly, the earlier we realise that Nigeria is a country of not less than 170M people , the better it will prevent us in handling her like Ghana and cotonue of less than 50M put together. Local production capacity operates on a system frame work that is monitored over a particular period of time if the government truly wants the current people to still be alive to benefit in the new idea. It is natural that a generation should make life better for coming ones. But it is not a crime if they also demand for some taste in the juice. Everyone seems to be clamouring for made in Nigeria goods but only few are asking for the national current capacity, government policy structures, production time frame and resources, the issue of standard and specifications etc.

Pls get this! There is a modern away Nigerian government can champion this campaign and yet the currently existing people won't suffer. The question is how?

CURRENT DIRECTIVE AND IMPLICATIONS : The first question is on capacity . For instance on Aba shoes. If we must all wear shoes made in Aba, the question is what is Aba production capacity that will meet the demand of the entire country?
Who are those also producing shoes and their capacity. Let us assume Aba can give us 20% of the national demand and other states including new guys coming in can give 30%. This make is 50% altogether. How will the balance of 50% be met? With this, you will automatically create a scarcity that will in the long run jack up the price per unit. Here, people will spend more because of the competition. The people suffer here. This goes to all other products that you can't guarantee 100% local production capacity. It is not peculiar to Nigeria. It is universal. Local production doesn't grow on government instruction but by a well time guided policies.

 WAY OUT

I have said this couple of times that the Naira won't come up in one day and the current restrictions won't help this matter in the end. There must be a time bound policy frame work that must be monitored over a period of time. The first question is, out of all our imported goods that seem to be eaten up our Naira value, how many of them do we really have capacity to produce locally if we haven't started at all? 2. Those ones we seem to have substitutes at home at the moment like Dangote cement, Lafarge etc. What is their production capacity on the aggregate? If we shut imported cement today through either by Custom or Forex restrictions if not both, can the local production capacity meet the need for 170M without creating scarcity and inflation? If the answer is yes, then the government can go ahead and close it 100%. But if the answer is No, then shutting it now, will not only create scarcity, the people will end up poorer. 3. Having been able to gather production capacity statistics through a well designed data analysis, then, it goes into the expansionary policies from the government through various business finance support system that will encourage the old,new and potential business men into the local production stream. The bank of industry can be strengthened more in this area. With all these being put in place, the local production capacity will grow. Until the local production growth can meet our local demand level, there must be a data monitored importation that will augment the local demand shortfall. This will prevent scarcity and unnecessary inflation along the line. With a good data figure, we can get it done. 4. The standard organisation must step up their work. Local good must go through standard lines in order to maintain quality and for the local goods to be exportable in the long run. 5. This is the way to go to control the current economic pressure especially on the production side. This may take 2, 3, 4years and more to achieve 100% local production capacity. But until that is established, there must be some measures of augmentation of importation to remain alive.

Recommendations in summary

I. Get the data base of the current local capacity (Old, new and potential manufacturer) .
I. Build infrastructure that will reduce the cost of production and finance support structure that will expand the existing and new business.
III. Free the dollars restrictions on items we don't have local capacity and until we reach 100%. This will prevent uneccesary scarcity and inflation.
V. Monitoring of local production growth and gradually reduce importation on such items as local production climbs on the growth ladder till will reach 100% as we are currently experiencing in the Oil sector . With this being put in place, we will get there, Naira will gain value over time as local production improves gradually , the people will not suffer along our policy line. And we will be self sufficient in the end.

God bless Nigeria

Tunde Adenuga
Economist and Risk Manager