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2010: Mixed Grill For Nigeria’s Manufacturing Sector

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From all indications, Nigeria’s manufacturing sector has recorded some improvement last year due to a number of reforms initiated by the Federal Government.

The Manufacturers Association of Nigeria (MAN) says that macroeconomic indicators in 2009 showed that the country’s Gross Domestic Products (GDP) grew by 7.0 per cent in the third quarter of  last year, compared with 6.13 per cent in 2008.

The association says the growth was driven mainly by the non-oil sector, particularly agriculture, which accounted for 45.35 per cent of the GDP.

Industry operators attribute the feat to the latest round of Central Bank’s banking reform programme, which started in August 2009, saying that the reform has impacted positively on the manufacturing sector in 2010.

They also note that the Federal Government’s Power Sector Reform Programme, aimed at fully liberalising power generation and distribution, has also boosted production in the manufacturing sector.

They say that the two reforms, if well implemented, are capable of reviving manufacturing activities and the national economy, while aiding the fulfillment of the Federal Government’s Vision 20:2020, aimed at making Nigeria one of the top 20 industrialised countries in the world by 2020.

MAN, at its last annual general meeting, described the latest banking reforms as “timely, creative and critically beyond the teachings of liberal economic theory where the primary role of the central bank is macroeconomic stability and to ensure a stable banking sector’’.

The immediate-past President of MAN, Alhaji Bashir Borodo, conceded that it was rare for the CBN to initiate such initiatives to redeem the real sector of the economy directly, adding that such tasks often fell within the exclusive preserve of politicians, ministers of finance or national planning.

He noted that the World Bank and the International Monetary Fund (IMF) often viewed developing countries’ efforts to inject funds to prop up the real sector of their economies with scorn.

Borodo said that the banking reforms had a three-stage process which was first of its kind in any developing country, adding that the first involved the restructuring of existing short-term, high-interest loans into long-term loans with a low interest of seven per cent per annum.

Under this requirement, banks are expected to give loans to the real sector, using at least 50 per cent of funds received from the Bank of Industry (BOI), while the CBN guarantees loans given to

manufacturers and SMEs under the Medium Enterprises Credit Guarantee Scheme.

“We believe this bold initiative by the CBN will set the standards for monetary intervention in the real sector and will ultimately define the relationship existing between the banking sector and the real sector,’’ Borodo said.

The MAN chief, however, said that for the manufacturing sector, there had been “growing challenges’’, induced mainly by the economic environment of the country.

Industry watchers, nonetheless, commend the Federal Government for approving N150 billion for the manufacturing sector and N100 billion for the textiles sector, out of which N30 billion has already been disbursed through the Bank of Industry (BOI).

In spite of the intervention, experts say that many challenges are still confronting the manufacturing sector, stressing that a major limitation was the country’s energy crisis.

However, the Federal Government is not unmindful of the energy constraints, as it has repeatedly pledged to make electricity more available by 2012 via its power reform programme.

On August 26, for instance, President Goodluck Jonathan launched the roadmap to power sector’s reform, in which Federal Government is expected to sell off its 51 stake in electricity distribution companies and thermal power stations to private investors.

Under the new arrangement, however, the Federal Government will still own the transmission grid but the facility will be managed by private sector operators.

Prof. Barth Nnaji, the Chairman of the Presidential Taskforce on Power Issues, said that the Federal Government was working hard to ensure that some of the electricity companies were sold before the expiration of the administration’s tenure.

The measures notwithstanding, economic analysts contend that the limitations of the manufacturing sector include inconsistent government policies, poor infrastructure, multiple taxation, smuggling and importation of substandard goods.

They also criticise the new Federal Government policy lifting the ban on imported products such as textiles and fabrics, toothpicks and beverages, while extending the age of imported second-hand vehicles to 15 years.

The Minister of Finance, Mr Olusegun Aganga, who unveiled the new policy, defended it as a strategy aimed at encouraging Nigerian importers to use the country’s seaports for imports to generate revenue for the government and discourage smuggling of vehicles in particular.

However, Mr Jaiyeola Olanrewaju, the Director-General of the Nigerian Textiles Manufacturers Association (NTMA), said that the textile sector did not perform well in 2010.

He, nonetheless, said that some textile producers were able to have access to N30 billion, out of the N100 billion which the Federal Government gave to BOI for the development of the textile sector.

Olanrewaju bemoaned the state of Nigeria’s infrastructure, deploring the dismal state of the country’s energy situation in particular.

“Unless the power situation is improved, our industries cannot produce competitively, as imported items will continue to be cheaper than locally produced products,’’ he said.

The NTMA chief stressed that no country could develop without a productive industrial base which was hinged on regular electricity supply.

He described the new government policy lifting the ban on imported items, including textiles, as “absurd’’, particularly when locally produced fabrics could not compete with the foreign ones.

“Stakeholders believe that the ban should be maintained until the operating environment is conducive enough, as most of our textile products cannot compete with imported ones because of high costs of production,’’ he said.

Olanrewaju said that it was incongruous for the government that was struggling to ensure the revival of the country’s ailing industries to initiate such a policy that could provoke the closure of more industries and worsen the unemployment situation.

He wondered how textiles manufacturers would be able to pay back the loans they got from BOI if they were unable to produce and sell fabrics because of the new policy.

“It means the government will have to take over the factories sooner or later when they cannot meet their obligations to the bank,’’ he said.

Olanrewaju identified some of the problems plaguing the sector as poor electricity supply, prohibitive costs of diesel, gas and transportation, as well as bad roads.

Apart from textile manufacturers, other industrialists have bemoaned the government policy relaxing the import restrictions placed on certain manufactured goods.

They argue that the country would soon become a dumping ground for substandard products, stressing that the Federal Government must reverse the policy which, they say, is inimical to the growth of the manufacturing sector.

Alhaji Amuda Obelawo, the Chief Executive Officer of LOPIN Industries, identified the influx of substandard goods into Nigeria as the bane of the country’s industrial development.

Obelawo, who made the observation during a recent inspection of one of his factories by the Standards Organisation of Nigeria (SON), stressed that the importation of poor quality goods would thwart efforts to foster the country’s economic development.

“Government should stop the production and importation of substandard products because the buyers are just being hoodwinked to buy products that are not durable.”

“The proliferation of substandard products in our markets is affecting the national economy and is posing serious threats to the survival of indigenous companies.

“The government is also responsible for the problem because its agencies do not buy ‘Made-in-Nigeria’ products and quality goods because of selfish gains,’’ he said.

Obelawo alleged that many contractors handling federal, state and local government contracts were fond of using fake products in the projects, adding: “That is why we often see new buildings collapse.”

Still on the Federal Government policy, Dr David Obi, a member of MAN’s executive council, stressed that the lifting of the ban on the importation of certain categories of second-hand vehicles was an example of policy inconsistency.

Obi, who is also a member of the governing council of the National Automotive Council (NAC), urged the Federal Government to rescind its policy that increased the age of imported vehicles to 15 years, saying it would cause more harm than good.

He said that such a policy was a disincentive to some automobile companies itching to establish vehicle assembly plants in Nigeria, adding that such plants would also create more employment in the country.

Obi urged Nigeria to take a cue from China, a country which started the development of its automotive industry instead of relying on cheaper alternatives offered via the importation of used vehicles.

“In fact, China was offered thousands of used vehicles free of charge by Japan some years ago but China turned down the offer because it would interfere with plans to build its own automotive industry.”

“Nigeria now wants scraps to be brought into the country as vehicles without regard for the development of its automotive industry,’’ he said.

Obi stressed that the Federal Government ought to protect and nurture the development of the country’s automotive industry, urging it to learn lessons from the U.S. government which had always protected the country’s steel industry against unfair competition.

Reacting to the criticisms of the policy, Alhaji Jubril Martins-Kuye, the Minister of Commerce and Industry, said that the new policy on importation of used vehicles was not just to earn more revenue for government but also to make more vehicles available for the citizens.

He noted that neighbouring countries, such as Benin Republic and Togo, had 15 years as the age-limit for imported used vehicles, adding: “Somehow, these vehicles find their way to Nigeria through smuggling.

“And since the vehicles are smuggled into Nigeria, the Federal Government loses the revenue that should normally accrue to it and this is what we want to stop,’’ he said.

Besides, Martins-Kuye stressed that government only lifted the ban on those textiles that were not produced in the country, saying: “We only unbanned the importation of goods, including textiles, that we are not produced locally.’’

The minister pledged the Federal Government’s commitment to promoting Nigeria’s industrialisation, and explained why it had placed appreciable emphasis on the power sector’s reform, so as to make the country more investment-friendly.

All the same, industrialists have been commending the campaign to promote increased patronage of Made-in-Nigeria products, which started in August 2009, as a tonic that would boost the development of the manufacturing sector.

They, nonetheless, insist that the government should make concerted efforts to tackle the country’s energy crisis, saying that the achievement of a stable power supply in the country would play a pivotal role in transforming the national economy.

The experts also urge the government to provide low-interest credit facilities for manufacturers and reduce taxations on manufactured goods, while raising the duties payable on imported items to encourage local production.

All said and done, the experts believe that the development prospects for the manufacturing sector are quite bright in 2010.

 

Grace Yusuf

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SMEs Dev: Firms Launch N100m Loan Scheme 

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The Coalition of Microlending and Cooperative Institutions in Nigeria (COMCIN), the umbrella body of non-bank microfinance institutions and cooperative societies in Nigeria, in partnership with NEAT Microcredit, has unveiled a N100 million joint loan facility aimed at supporting small and medium-scale enterprises (SMEs) across the country.

The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.

The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA),  said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.

Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.

“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.

He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.

According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.

“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.

Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.

He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.

“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.

He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.

“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.

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Yenagoa’s Radisson Hotel Ready  December   — NCDMB, Other 

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The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Felix Omatsola Ogbe, has expressed confidence that the five-star Radisson Hotel and Conference Centre, Yenagoa, Bayelsa State, would be completed and commissioned this December .
He said this while addressing visiting top executives of Edison Corporation  and Megastar Technical and construction company at the conclusion of a one-day project management tour and workshop at the headquarters of the Nigerian Content Tower (NCT), Yenagoa, weekend.
The Board in a statement from the Directorate of Corporate Communications said  all other stakeholder assured of the delivery of world-class services in the hotel upon it’s completion.
Ogbe described the hospitality facility as a top priority project of the Board whose progress he would be following up every day and week.
“This project is critical to the Board, critical to Yenagoa, Bayelsa State and Nigeria. With this hotel becoming functional at the end of the year, I believe there will be tourism in Bayelsa State, and that’s one of my dreams.
“When I took up this job as Executive Secretary in December 2024 I said I must make this hotel work”, the NCDMB boss said.
He commended the team from Edison Corporation and the project contractor, Megastar Technical and Construction Company, for the quality and pace of work, adding “much is required from the Management to meet up the schedule delivery
“Most of the critical aspects of the project have been resolved in terms of mark-up room, scope of work in terms of financing and contracting strategies”
The Board’s  Scribe said he was sure all hands would be on deck to ensure that work proceeds unhampered.
In his remarks, the Chief Executive Officer of Edison Corporation, Mr. Vivian Reddy, said the team from Edison Hotel Group was very excited to come into a contractual arrangement with NCDMB, assuring the project will put the city on the world map.
“What is so important with the group Radisson International is that, if anyone around the world looks for Radisson Yenagoa, they will see this place pop up, and it’s going to help to uplift the area in terms of visitors and tourism.
“Our role is to make sure we deliver a world-class quality hotel from start to finish. We will open the hotel, we’ll furnish it. We’re working with the main contractor to make sure the facility meets world-class standards”, he said.
Speaking on the sealing of the contractual deal with the NCDMB, he noted it took great efforts, saying “getting Radisson in the agreement was not easy, and it took several months and cumulative one and a half years of discussions and documentation”.
The Edison boss, who is reputed to be the first South African businessman to lead a high-level business delegation from that country to Nigeria during the tenure of President Thabo Mbeki in 1999, was full of commendation for the NCDMB boss, describing him as “a great and visionary leader”.
“The vision and dream of the Executive Secretary of the NCDMB are going to become a reality.  We’re going to help him and make it a reality and it’s going to be the best hotel in this region”, the   boss noted.
Mr Reddy also commended the project contractors and professional teams involved, stating that his team has every confidence in their technical competence.
By: Ariwera Ibibo-Howells, Yenagoa
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RIRS Sets Tomorrow As Deadline For Individual Tax Returns Filing    

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The Rivers State Internal Revenue Service (RIRS) has set tomorrow as the deadline for the filing of  all  Annual Individual Income Tax Returns  for all taxable residents of the state.
This was contained in a public notice  by the Service to the taxable residents of the state in compliance with statutory provisions.
The notice was signed by the Executive Chairman of the agency, Sir Israel O. Egbunefu, and made available to the public in Port Harcourt recently.
 Egbunefu stated that the directive was in line with the provisions of the Nigeria Tax Administration Act 2025, which mandates individuals to declare their income for the preceding year of assessment.
 According to the notice, the obligation covers all categories of income earners, including employees in both the public and private sectors, self-employed individuals, business owners, and professionals operating within the state.
The agency reiterated that the timely filing of tax returns remains critical to promoting transparency, accountability and efficient tax administration in Rivers State.
 It further noted that compliance with tax obligations plays a vital role in enabling the government to meet its developmental goals and provide essential public services.
 RIRS urged all eligible taxpayers to ensure that their 2025 tax returns are properly completed and submitted through its approved channels before the stipulated deadline .
The Service warned that failure to comply with the directive may attract penalties and other sanctions as prescribed by relevant tax laws.
 It also stated its commitment to enforcing compliance while maintaining a taxpayer-friendly approach in its operations.
 Taxpayers requiring assistance were advised to visit any RIRS office or access its official platforms for guidance on the filing process.
The agency assured residents of continuous support, including professional advisory services, to facilitate a seamless and stress-free compliance experience.
 The notice forms part of ongoing efforts by the Rivers State Government to strengthen revenue generation and enhance voluntary tax compliance across the state.
 Residents are therefore encouraged to take advantage of the available support systems and meet the deadline to avoid unnecessary penalties.
By:  King Onunwor
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