Again, industrialists bemoan high cost of trade in real sector
By Oghale Mafuru
Players in the manufacturing sector have raised concerns over the high cost of trade which hampers the level of productivity and growth of the economy.
Chairman, Sona Group of companies, Arjan Mirchandani added his voice to the many who have decried the high cost of manufacturing in Nigeria and its effects on investment.
The Sona Group boss said: “Manufacturing is difficult in Nigeria. Many people told me I am crazy for setting up this kind of investment.”
According to the business tycoon, “The cost of manufacturing is growing every day. Most times, to get a container from Tincan Island or Apapa seaport and so on, you have to pay #1.2m for one container each.”
Similarly, Shopper/Customer manager, Beiersdorf Nivea, Olukayode Faizal, expressed concerns over inaccessibility to Forex.
He said: “A lot of our raw materials are still imported and that means we need to source foreign exchange. A lot of these materials that are used for personal care products are not on the exclusive list to source foreign exchange from the CBN.”
He added: “So it means that manufacturers like us have to source Forex to buy some of these raw materials. Forex has been a major challenge to us. We just have to keep running and ensure that we continue to stay in business.”
Urging the government to match intent with action, Mr. Olukayode said: “sometimes, government intent is very good and noble but the way and manner the policies are executed might actually create some infractions on the operations of the manufacturers which is where a lot of focus needs to be put to ensure that the execution of these policies are seamless as much as possible and it does not have negative impact on manufacturers.”
According to the World Bank-ESCAP trade costs for 2019, trade costs for African countries are on the average equivalent of a 304% tariff and for Nigeria, it’s even slightly higher at 306%.
Recently, the Director-General of the World Trade Organization, Dr. Ngozi Okonjo-Iweala, and former finance minister of the Federal Republic of Nigeria, in a virtual address at a two-day Mid-term Ministerial performance review retreat organized by the Office of the Secretary to the Government of the Federation, decried the high cost of trade in the country warning that it will discourage investment in the country.
The World Bank DG emphasised the need to improve security to attract foreign and domestic investments. She urged the country not only to slash trade costs but also infrastructure cost, linkage cost, regulatory cost, customs cost, and all costs associated with moving goods from the factory to the final consumer to complement investment facilitation.
According to her, congestion, capacity constraints and high costs at Nigerian ports do not encourage investment as they make it difficult to build supply chain operations in the country.
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