Interview: Kola Jamodu
To what extent have policies concerning local content benefitted Nigerian industries?
KOLA JAMODU: Although the Local Content Act is applicable only to the oil and gas industry, there is a firm policy regarding the patronage of locally manufactured products. The government is now willing to pay a bit more for domestically produced goods to encourage local manufacturers. One of the best ways to create and sustain job opportunities is for the government to empower and encourage investment in manufacturing. Existing manufacturers must have the facilities and opportunities to expand production capacity in order to employ more people and generate more economic activity. There is no point in importing products that can be competitively manufactured in the country, thereby denying job opportunities to Nigerians.
The policy of favouring Made-in-Nigeria products has been of tremendous benefit to domestic industries, particularly in areas where backward integration initiatives have been embraced. Success stories have been recorded in the cement industry, where Nigeria has moved from a major importer to self-sufficiency, as well as other sectors. The local content policy has encouraged the transfer of technical skills that ordinarily would not have been available in Nigeria. In this regard, capacity building has enabled steel fabrication firms to participate in welding, including under-sea welding in the oil and gas sector. The policy has substantially boosted job creation, especially in the small and medium-sized enterprises sector, which makes use of local materials and acts as an important link in supplying larger manufacturers.
What further steps need to be taken to firmly establish a viable domestic automotive industry?
JAMODU: The first step is to correct past errors in policy that did not provide enough protection for motor vehicle assemblers. It is necessary to create adequate tariff differentials between knock-down kits for assemblers and imported fully built units. Strict adherence to the age limit on vehicles imported into the country would also help. Improvements in the iron and steel industry are a must in the effort to breathe new life into the sector and to engender the manufacture of essential components required in assembly plants.
Furthermore, in view of the high dependence of the local automotive industry on manually welding parts and components, as compared to robotic operations in industrialised economies, providing uninterrupted power is essential to revitalising the industry. Along with these measures, buying local is key. The government, as the largest single spender in the economy, should patronise locally assembled vehicles in the spirit of the ongoing Made-in-Nigeria campaign.
In your opinion, what needs to be done to help reestablish the textiles industry?
JAMODU: Today most textiles in the country are imported, smuggled or dumped. A significant proportion of imported textile products are cheaper alternatives to those manufactured locally. Infrastructure is again the primary issue. There is a need for a degree of protection to help spur the sector’s development. Nigeria has resources, both human and material, an internal market, a strategic location and access to a large export market. The opportunities are very promising.
Additionally, the textile industry is a heavy user of energy. The present state of power distribution is being addressed through privatisation, and is a major challenge to the competitiveness of the sector. Restoring the textile industry to previous levels also calls for new investment to replace out-dated technology. Aligning the Nigerian textile industry with the best in new global practices will improve the quality of output and enhance competitiveness.
Furthermore, the local petrochemicals industry has the potential to ameliorate the obstacles the sector faces in obtaining raw materials by providing inputs for the manufacture of synthetic fibre, which now has wider application as compared to natural fibre (cotton).
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