You may have recently seen the #BuyNaijaToGrowTheNaira phenomenon going on online for almost two weeks now. If you are out of the loop check out some of the recent posts here on twitter. This has been spurred by the actions of the Senate President and Sen Ben-Murray Bruce to support Nigerian-made products in order to boost the declining Naira. We are glad to see this discussion on the forefront of relevant online topics because this has been a focus here at kpakpakpa.com – raising the consciousness on local manufacturing and providing information on the manufacturing industry in Nigeria.
One of the ways proposed to support local manufacturers is through the amendment of the procurement act. The amendment of the Public Procurement Act of 2007, will make it obligatory for Ministries, Departments and Agencies of the Federal Government to first consider and patronize Nigerian products before their foreign alternatives. The belief is that making it mandatory for the government to buy locally manufactured products will provide a sure and ready market for locally manufactured goods.
Is this sufficient?
Is the amendment to the procurement act sufficient to boost the manufacturing industry in Nigeria?
As mentioned, we are glad to see the dialogue on local manufacturing and governments role in the industry, but are weary of the extent of governments involvement. We do not believe in local manufacturers wholly (or entirely) relying on the government for all solutions, or the government being their sole customer. Having a high number of local manufacturers with the government as their sole consumer could have an adverse effect on the industry. The government as a guaranteed customer could provide the Manufacturers too much comfort of always having a “market” and decrease the incentive to improve their quality and produce the best product.
Along with other Nigerians – we know our people, so it is easy to remain skeptical about the intentions of the government, but we hope this is a starting point for what will be a continued effort to support local manufacturers.
What the government can do
We have a few quick thoughts on things that the government can do to empower the manufacturing industry in Nigeria. This includes:
- development of industrial clusters so that manufacturers can share some of the fixed costs of running their facility with other manufacturers.
- improving roads and other transportation outlets that will facilitate the movement of goods around the country.
- reducing the barriers required to start a business and register each product manufactured.
- encourage the ease of exporting products out of Nigeria to facilitate competition in the global market.
- carefully choosing a restricted list of imported goods that flood the Nigerian market but can be easily produced in Nigeria.
Yes, this list could be much longer (we didn’t even talk about power generation, but as Nigerians, we have been talking about that for a while now) but it’s our thoughts on areas that the government can come to play in the manufacturing industry. Check out our article on incentives for government to support manufacturing
What do you think? What role should the government play in boosting the manufacturing industry in Nigeria?