New investments
The Minister of Trade and Investment, Olusegun Aganga, look back and said that the problem of insecurity didn’t stop the flow of new investments into the country as $8.9 billion foreign direct investment was recorded during the year under review.
“The sector made significant achievements within the last one year. In terms of investment inflow, at least 30 per cent of the investments coming into Africa come to Nigeria, which makes the country number one investment destination in Africa. But what makes this very important is that it does not include oil and gas investment, it is in the real sector of the economy,” he said.
Ease of doing business
Similarly, the country was rated 6th best place among top ten countries with favourable investment climates for small businesses to thrive.
The result came from a survey of more than 24,000 people across 24 countries. It was conducted for the BBC by the International survey firm Globascan together with International Policy Attitudes at the University of Maryland, U.S.A.
The report said that corruption, notwithstanding, Nigeria is the 6th most favourable place for entrepreneurs to start business.
The survey ranked Indonesia first most favourable country for entrepreneurs, followed by United States of America, Canada, India and Australia and Nigeria
“As you are aware, CAC is charged with the responsibility of registration of companies, business names and incorporated trustees. ICT infrastructure ensures greater efficiency of the system and high data integrity. In order to actualize its ICT thrusts, the Commission embarked on a total upgrade of its WAN from VSAT –based network to a more reliable fiber based system this was meant to improve availability and also enhance transactions.”
Success story in cement sector
In his own assessment, Engr. Joseph Makoju, Chairman, Cement Manufacturers Association of Nigeria (CMAN), said: “This year 2012 is the year when as a result of the 2002 Federal Government’s backward integration policy in cement production, we have seen installed local cement production capacity rise exponentially from 3.0 million metric tons per annum in 2003 to 18.5 million metric tons per annum with another 12 million metric tons expected from the expansion and new plants currently under construction across the country by the manufacturers.”
This, he said, has moved the country from the position of the world’s leading importer of cement in 2006 to a position of not only self sufficiency today but indeed potential net exporter of the product.
Alhaji Aliko Dangote, President of the Dangote Group, noted: “With this achievement, the era of cement importation into the country is over as we now have capacity to surpass local demand. In 2011, the total national demand for cement was 17.0 mmtpa. The current combined capacity of Dangote Cement plants alone is over 20 mmtpa and total installed local production capacity now stands at 28.0 mmtpa.
“In fact, we are currently engaged in converting our import terminals to export terminals in readiness to export our excess capacity in cement to neighbouring West African countries, where there is a cement deficit. I am delighted that Nigeria is today transforming from being one of the biggest importers of cement in the world into an exporting nation, within a short while,” he said.
New electricity tariff
Moving away from the positive side, conversely, the year was challenging for manufacturing companies as a result of the newly introduced electricity tariff; high level of smuggling and multiple taxes.
During the year under review, industries across the country felt the negative impact of the new electricity tariff which they say eroded their profits margin as operating cost increased by 440 percent. The new tariff was introduced in June 2012 by Nigeria Electricity Regulatory Commission (NERC).
According to the Managing Director of Alind Nigeria Limited, a private limited company based in Bauchi, before June 2012, the company was classified as 03 (industrial) for tariff classification and paid a fixed charge of N43, 471 and an average monthly electricity bill of N110, 000. However, after the introduction of the new electricity tariff in June, 2012, their classification moved to D4, and they now pay a fixed charge of N106, 000 and an average electricity bill of N212, 231, representing 143 percent and 93 percent increases in the fixed charge and average electricity bill, respectively.
Multiple taxes
The Chairman, Manufacturers Association of Nigeria, Ogun State Branch, Dr. Dolapo Ogutuga, commented on the menace of multiple taxes during the year:
“On continuous basis, local government councils, regulatory agencies of government came out with one form of taxation, levies or charges which stalled operations of factories to a near halt. The year was also challenging for the manufacturing due to security challenges caused by the Boko-Haram sect. The effect of this development is that supplies of product to the Northern states were adversely affected. This affected the manufacturing business in the country as companies had to maintain higher inventories,” he said.
Expectations for 2013
Concerning stakeholders’ expectation for 2013, Chief Kola Jamodu, President of Manufacturers Association of Nigeria, said they would like to see new manufacturing investments spring up and some old manufacturing plants revived this year. In 2012, President Goodluck Jonathan commissioned some new manufacturing investments in Lagos, Ogun, Imo, Rivers, Enugu and Anambra states. This is a welcome development for the manufacturing sector and I look forward to seeing more of such happening in all states of the federation soonest.”
He said that the stakeholders also wants long term loans at lower single digit interest rate and zero percent duty on all manufacturing machinery and equipment to facilitate retooling and replacement of obsolete parts; the recent increase in the price of electricity tariff, LPFO, AGO should also be addressed including downward review of corporate tax to 20 percent and removal of VAT on raw materials,” he said.
So far, now that the achievements and challenges recorded in the outgoing year have been juxtaposed, how would you rate the performance of the sector? Perhaps, the performance is 50, 50.
In the words of Mr. Yinka Akande, Director General of Manufacturers Association of Nigeria, not all is negative about Nigeria; there are a lot of good things happening in the economy. It’s high time we amply our successes and downplays the negatives. Let’s stop being negative as opinion molders. This is the only way to build confidence in the economy.”
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