Patronage of Nigeria-made products still low - manufacturers

Manufacturers of products in Nigeria have said that the patronage of made-in-Nigeria goods have remained low, despite the Executive Order 003, which mandates all government establishments to make Nigerian manufactured products first choice in public procurement processes.

This was contained in Manufacturers Association of Nigeria’s CEOs Confidence Index for the third quarter of 2019.

The MCCI is an index created by MAN to gauge the pulse of the economy on a quarterly basis.

It deploys a set of diffusion factors such as current business condition; business condition for the next three months; current employment condition; rate of employment; employment condition for the next three months and production level for the next three months to measure a quarterly perception and confidence of manufacturers in the economy.

In the report made available to our correspondent, the manufacturers also lamented that inventory of unsold products in the country had not reduced.

Concerning the low patronage of made-in-Nigeria goods, it stated that 62 per cent of the CEOs of manufacturing companies interviewed disagreed that patronage of Nigerian manufactured products had improved as a result of implementation of the Executive Order 003.

It stated, “This response clearly shows that the Executive Order 003 which mandated all government establishments to make Nigerian manufactured goods first choice in public procurement processes has not been conscientiously implemented.”

The report further indicated that 28 per cent of those interviewed agreed that it had improved, while the remaining 10 per cent were not sure of the status of its implementation.

The manufacturers said Nigeria’s challenge had never been formulation of laudable policies, but “evidence has shown that poor policy implementation has been the challenge in the country.”

The manufacturers said there was a need to properly review the implementation processes of the Executive Order 003 to ensure that government’s patronage of goods manufactured in Nigeria improved this year to boost the performance of the Nigerian manufacturing companies.

This, they said, would ensure increased contribution to national output and increased employment opportunities from the manufacturing sector.

On unsold manufactured products, the report indicated that 61 per cent of the CEOs interviewed said the inventory of such products had not reduced; rather, their factories were still stocked with such products in that quarter.

It added that only 24 per cent agreed that the inventory of unsold products had reduced while the remaining 15 per cent were not sure.

“This differing positions of manufacturers underpin the need for government to introduce fiscal policy measures that would be in sync with existing monetary policies to improve the purchasing power of the citizenry in order to stimulate household consumption in the country,” the manufacturers said.

However, the aggregate Manufacturers CEO’s Confidence Index for the third quarter of 2019 of 51.7 points presented a marginal increase of 0.8 index point over the 50.9 index point recorded in the second quarter of the year.

The slight increase in index in the review period, according to the manufacturers, showed that manufacturers’ confidence in the economy improved in the third quarter.

They attributed the slight improvement in performance to their doggedness “as the operating environment remained very challenging.”

They noted that the backward integration policy and the import substitution strategy of the government was gaining traction as evidenced by responses from CEOs of manufacturing concerns, as only 43 per cent of them disagreed with this.

The report stated, “Only 38 per cent of those interviewed agreed that the level of local sourcing of manufacturing inputs had improved, while 19 per cent were not sure which shows that there still exists a larger room for improvement.

“Therefore, government needs to sustain the implementation of the backward integration policy by properly funding relevant institutions, initiating policies that will give priority attention to the development of local raw-materials in commercial quantity, creating friendlier environment for investment on the value-chain of these materials as well as ensure that adequate forex is made available for importation of vital raw materials that are at the moment not available locally.”

They said the government also needed to strategically involve the private sector operators in the crafting and implementation of its backward integration policies to facilitate the creation of industry-friendly and enduring policies that would not erode the little gains made so far in the nation’s industrialisation drive.

In the area of sectoral performance, it was a mixed bag of performance across the sub-sectoral groups, as over 50 per cent were recorded in beverage and tobacco (60.9); textile, wearing apparel, carpet, leather and leather footwear (56.8); followed closely by non-metallic mineral products (56.7); motor vehicle and miscellaneous; Assembly (55.3); while pulp, paper & paper products printing, publishing and packaging stood at 50.7 points.

Five other subsectors recorded below 50 points in the following order: Chemical & Pharmaceuticals, 49.7 points; followed closely by domestic/industrial plastics, rubber & foam with 49.0 points; while basic metal, iron & steel, fabricated metal recorded 47.0 points; electrical & electronics stood at 46.2 points and wood & wood products stood 44.8 in the third quarter of 2019.