The Manufacturers Association of Nigeria (MAN) has identified the high cost of production as a primary barrier to the competitiveness of made-in-Nigeria products. According to Segun Ajayi-Kadir, the Director General of MAN, while Nigerian products are of standard quality, the challenging operating environment significantly hampers their ability to compete against imported goods. The unfavorable conditions include high production costs influenced by various macroeconomic factors, which have made it difficult for local manufacturers to establish a foothold in both the domestic and international markets.
Despite the challenges, Ajayi-Kadir emphasized the potential of exporting Nigerian products as a path to enhance profitability and bolster the economy. He noted that while export presents opportunities for manufacturers to earn foreign currency and import machinery and raw materials, simply exporting goods is not enough. He underscored that Nigerian products need to be competitive in the global marketplace, where they face stiff competition from products from other countries, including those produced locally in the destination markets. Therefore, ensuring that the prices and quality of locally manufactured goods are aligned with international standards is crucial for success in exports.
Ajayi-Kadir pointed out systemic inefficiencies in export processes that result in delays, often leading to products nearing their shelf life before they can be shipped. He explained how these logistical issues, including export documentation and inspection delays, inhibit manufacturers from achieving export competitiveness. Consequently, he articulated the need for a conducive macroeconomic environment to support growth in manufacturing operations. The Director General rejected the notion that the inferiority of Nigerian products is widespread, attributing such views to products from unregulated manufacturers rather than an overall standard of local goods.
He defended the quality of regulated Nigerian goods, asserting that they meet globally accepted standards as verified through the Mandatory Conformity Assessment Programme (MANCAP). Ajayi-Kadir pointed out that it is misguided to label Nigerian products as inferior when they comply with rigorous quality checks. Despite the quality, the fundamental issue remains the high cost of production, often exacerbated by consumer preferences for lower-priced imported options that frequently benefit from cheaper production environments and tax evasions, which further undermine local industry competitiveness.
The MAN has engaged in advocacy with the Federal Government to address these challenges, recognizing some ongoing initiatives such as the Accelerated Stabilisation and Advancement Plan and fiscal reforms. However, Ajayi-Kadir stressed that these efforts are insufficient in the face of rising operational costs, particularly power and interest rates, which have skyrocketed. He highlighted the impossibility of thriving under interest rates that reach up to 40%, stating that such figures make it nearly impossible for manufacturers to remain profitable. He argued that good government policies often struggle to deliver tangible results because of these underlying economic pressures.
In addition to advocating for better operational conditions, Ajayi-Kadir proposed implementing a concessionary rate for import duties on raw materials to alleviate production costs. He suggested that lowering import duties could help bring down inflation and lower production costs, thereby making locally manufactured goods more competitive. By emphasizing these measures, he believes local manufacturers would have a greater capacity to compete effectively with imported goods, ultimately contributing to a more robust Nigerian economy and enhancing the overall manufacturing sector.
