WTO Policy Unfavourable To Nigeria’s Local Industries- Adhama

WTO Policy Unfavourable To Nigeria’s Local Industries- Adhama

Saturday, July 25, 2015 7:56 am


Adhama

Adhama

Alhaji Saidu Dattigo Adhama (MFR), a Fellow of Textile Technologies of Nigeria and Chairman, Adhama Textiles And Garments industry spoke to MADUABUCHI NMERIBEH on the need for the Federal Government to look into the World Trade Organization agreement with Nigeria and how it has been killing the fortunes of indigenous manufacturers.

Excerpts:

You are one of the major players in the textiles and garments industry. How has your business been surviving in the face of the hijack of the textile industry by foreigners who flood Nigerian markets with their ready-made goods?

The fact is that the World Trade Organization, WTO, issue which leads to total liberalization, total deregulation of the economy; and the porous border and so many things that are linked with the WTO agreement and even going beyond, are the factors that forced we the local manufacturers into this terrible situation. We are at a standstill—we produce under harsh economic conditions. The situation of manufacturing in this country will continue to suffer if that WTO agreement is not checked and reviewed.

What I mean by that is that in that agreement, one of the conditions, to my understanding is that signatory member-nations should open their borders, remove all the subsidies in their business—particularly agriculture. And they are very painful conditions for a developing nation that cannot compare their economy with other countries like America, China and all these G7 and other strong economies. These strong economies for more than 100 years have already developed their agriculture.

Now for a developing country like Nigeria to agree that they will remove subsidy in agriculture, I don’t think that is right. Removing subsidy and opening border for everything to come in should be reconsidered for the interest of our local manufacturers in one hand, and the development of our economy in the other hand. It is wrong and very injuries to our economy for every business to be open to everybody. There is no difference between a foreigner and a Nigerian in terms of trading—this is wrong! It cannot be so, otherwise it is going to be a competition or time-bomb for future youths to tolerate.

The future generation of our youths will not tolerate idleness. And with the present circumstances we find ourselves where you see a foreigner doing everything a Nigerian can do, including sewing and ordinary tailoring. A foreigner cannot come and set up a tailoring firm in
this country and employ our youths, rather he will bring in his own shirts, pants, jackets, caps, everything and what have you and flood them in our markets to the detriment of local products. They will not employ Nigerians; they will bring in finished products from their country and dump it into our markets for our youths to buy, for our elders to buy, for our babies to buy—and most of these products they bring in are substandard.

So, what we are demanding is a complete reverse from this situation. We have to go back to the 1972 Entrepreneurship Military Decree. If you look at it, you find out that we have not benefitted anything from the abrogation of that decree. Is the abrogation of the decree to the interest of foreign investors or is it to the interest of Nigerian businessmen and employment of our people? With the abrogation of that decree, we have been having mounting problems of mass unemployment. Foreign direct investment now is not in the employment sector. It is in the trading sector which negative impacts on our economy—they bring goods, they mop out money; we want them to come in and set up industries here in Nigeria, employ our people and they repatriate their profits.

Now, look at the way they behave, they employ people in their country to produce goods and they bring it into our country to sell the goods and mop out the money. To my understanding, this can be called financial crime; because if a clear investigation is done, you will understand that the money is moved out of this country not in a legal way. So, you press men should try to find out whether all these products that are brought into this country: one, are they being brought in accordance with the laws of this country; two, the money being repatriated out of this country, are they being transferred to them through official means—I doubt very much.

So, these are the things I want you to really go to the banks, go to the Bureau De Change, go to the EFCC, go to even the traders in the market and find out the billions of Naira trading going on in various markets—how is the money being transferred to these foreign business men in various countries outside the shores of Nigeria—is it official, is government getting its due tax? There is a big question there. The EFCC just have to come in and find out what is happening in our markets; how do the foreigners transact their businesses, how do they do it—the EFCC should find out because their operation should not revolve only within the government circle.

There is need to find out all these things. There are economic crimes going on in our markets and within the business circle; not only in the government that you have financial crimes. Let me tell you that I am fully convinced that economic crimes amounting to hundreds of
billions of Naira are going on in the private sector—so, let the EFCC come in and investigate.

So, with this incursion of foreign goods into the markets, how have the locally produced goods been faring?
We have been saying this that we cannot compete with them—even in the production—always you have to go to these strong economies to buy your machines. You want to modernize your factory, you have to go and buy their machines. But if you want to buy a good machine, I will give you an example: a machine that can produce I inch in one minute of fabric, for example in textile, if you go to country A, perhaps, they will not sell to you the same machine that they use in their home industry, rather, they will say that this will have to pass through their legislators or parliament or whatever they call it, they will give approval for it to be considered for export market. That may take a year, two years, five years or even 10 years, depending on their governments’ considerations; but they will sell the product of that machine to you and say it is exportable without government considerations!

How can I compete with my machine that I bought from country X which is exportable which produces one inch in three minutes, and the one they use in their country which produces five inches in one minute; and their products is exportable to my country; and I buy their machine and bring it to my country and it produces one over seven of what they can produce in their country! They have legislation, they protect their own industries, but here we don’t. Even in the WTO agreement from my understanding, it says that every signatory nation has the right to protect its home base industries. What protection has Nigeria given to its home base industries? Even in the past when there was to be consumer protection law or agency that they wanted to set up, I appealed several times to the authorities to please include the manufacturers. Let us have Consumer-Producer-Protection-Agency; let us have a small seat there. Let us have a small forum from where we can be heard. We have a lot of complaints to make. Our voice needs to be
heard so that Nigerians will come to understand the magnitude of difficulties we have been passing through manufacturing and producing in this country.

Manufacturers should have a place in our laws and we should be given the opportunity to express ourselves and bring our problems and challenges to bear. If you dig into it in logical argument, if you protect the consumer and you don’t protect the producer who produces the product the consumer consumes, what is the sense in it? So, in the other hand, how can you adore foreigners who bring in sub-standard finished products in your country and mop up your money, and you punish the local manufacturers—your own citizens who face discrimination and embarrassment outside the shores of this country? This is totally unacceptable. You don’t protect the local producer in your own economy—he has no basis and you ask him to compete! Now, tell me how a Nigerian manufacturer can compete with a Chinese manufacturer—this is impossible because they are two different economies.

You cannot compete because there is no level playing ground. We don’t have technology, we don’t have favorable government policy; in fact, we have nothing at all to compete with them. So, what we are saying is that our industries should be categorized. The young men of today must be protected. They must be provided with the required resources to do what their mates in other countries are doing so that in the years to come, Nigeria will be able to meet up and rub shoulders with countries like India, China and Brazil who were at about the same pace with us several years ago, but have left us behind in almost everything.

It is not fair for our teeming youths to continue to line up under the whims and caprices of foreigners who will fly in to dictate to our leaders how our own economy should be run. They would come in, exploit us and brand us live slaves to our own economy! This is what is happening—you will go and vote for somebody to be in government, at the end of the day, that person will abandon you, abandon your welfare, abandon the interest of your country, his own country, and go out of his way to romance with foreigners whose primary aim is to meek your economy dry and keep Nigerians in perpetual poverty; and they would say they are attracting foreign investors!

Here in our factory, we produce quality T-shirts, but you would allow somebody to bring sub-standard T-shirts and compete with me in my market, and you cannot support me to go and export my own product to his own country. I cannot go to his country and sell because he has regulations there that can make it very difficult or even impossible for me to sell a Nigerian made product in his country; but in our country, it is open, very simple, very cheap; and when they finish cheating us, we will graciously say thank you to them!

So, it high time we would come and say, foreigners this is the kind of business you have to do here with X amount and Y amount—and anything above that will be unacceptable. Let us take for instance pure water business, for heaven’s sake, why would you allow a foreigner to do pure water business in Nigeria? Or Juice business in Nigeria? Look at all these confectionaries, biscuits, Sweet—Nigerians were doing this business before now but all the factories are closed! Now, we import biscuit, sweet, cake and what have you from China and India——this is very shameful! Look at ordinary matches, we cannot do it. Now, let me tell you, in the 1960s, Alhaji Inuwa Wada who is still alive today. I think he is the first Nigerian Defence Minister; he is from Kano here. In the 1960s, he set a matches factory here in Kano. That factory was the first one in the whole of northern states. He supplied matches from Kano to all the neighbouring countries; but today, we buy matches from China and India!

See what we can do here in Kano with 95 per cent Nigerian workers, today, we can no longer do it, we have to import it! A N5 packet of matches, we can no longer produce in Kano. We have over one million houses in Kano and every household has a matches. Every household consumes at least a packet of matches here in Kano and that is over five million packets of matches consumed in Kano alone every week! Now, what are our legislatures doing? What type of laws are they doing? Can they make laws that can protect small and medium scale enterprises? This is the challenge before us. This is the challenge before all Nigerians now—job creation; we have the resources to employ every employable Nigerian, but we lack the political will to come with adequate policies that can create an enabling atmosphere for our economy to thrive. So, we cannot compromise our own economy and boost the economy of China and India because we are signatory to the WTO.

We have agencies like the Customs and the Immigration responsible for checking the movement of foreigners and foreign goods into the country. Do you think they are doing enough to curb this menace?

Within the limits of their capacity, I think they are what they can do; but, let me ask, how many Customs men do we have in this country? Are they more than a hundred thousand? How can one hundred thousand Customs men man Nigerian borders? This is impossible. So, what I am saying is that government should enact laws that should encourage the protection of local manufacturers and this will make it impossible for foreigners to use our markets as dumping grounds. Producers’ protection laws will reduce corruption in our markets, in the manufacturing industry and in the private sector. It will make it difficult for these foreigners to connive with unpatriotic and greedy Nigerians to kill our economy. These foreigners aid and abate corruption in Nigeria because our government does not care about the welfare of the citizens; the government has refused to look into the future and plan for the progress and success of the Nigerian youth who is determined to go
out there and compete with his mates in the global market.

Our government should make laws that will encourage these so-called foreign investors to come in here and set up industries, employ our people and buy raw material from our farmers; and not to concoct sub-standard products in their countries and smuggle it here for us to buy. In textile business, for instance, we have the land to produce cotton, we have the industries, we have the market; so, what else are we looking for? Let the foreigners come and establish textile industries, let them operate in the hash manner we the indigenous producers are operating, so that when we go into the market with them, we can compete on a level playing ground. But when you allow them to produce in their country, employ their own people, get all the kind of subsidies they get in their country, get all kind of support they get from their government; and then, you come and allow the WTO agreement to thrive to the detriment of we the local manufacturers—this is not fair at all.

Let us face the reality, this WTO agreement is not good to Nigeria for now, we have to look for an exception to certain sections of that agreement. We have to ask for some concessions considering the situation we find ourselves. Otherwise, the issue of security of this country remains an emergency arrangement. So, we need something that is sustainable. We don’t have to continue to allow foreigners to manufacture biscuits, T-shirt, singlet, pants; any ready-made garments. We have enough people to produce all this things that we have been doing in the past. Why not now, that we have more population than in the past? It is unfortunate that our legislatures are not looking into the protective sector of the economy.

You can also agree with me that these foreigners are not alone in killing our economy. We still have some bad eggs within the business sector that collaborate with them. What do you think should be done to call them to other?

Yes, I agree with you. And I have mentioned it already. They collaborate with some Nigerians to do what they are doing; but if there is a good law that will say don’t do this—particularly to the foreigners, we will make a head way. For example, in some countries—I don’t want to mention their names; the Chinese don’t even go to those countries to do business. They don’t go, what they do is that whatever the Chinese want to do there, they get an agent from the country, give him your conditions. Let him place order, let him import goods from his country, he will sell. You will never see Chinese in all these big countries, but you will see Chinese products in the country. Who sell that products—the indigenes of those countries sell the products; but in Nigeria, the reverse is the case. You will see Chinese going into the local markets and buy everything by himself; even agricultural products. They fix price for our farmers; our farmers have no protection in their products.

A foreigner will come and say this your product is grade B, while it is grade A. No laws and no regulatory authority that will say this groundnut, this cotton or leather is grade A. We have the experts. Government should provide an agency that will be regulating these activities. When they say deregulation, they know what they mean, they deregulate everything! How can you be deregulating everything—there must be regulations that should protect the poor.

Can Adhama Textiles And Garments product compete anywhere in the world?
In terms of quality, we have no problem with quality; we can compete with other products in the global market. However, there are two areas that we cannot compete—we cannot compete in price because our production cost is very high; we may not be able to compete in quantity now because we do not have the required technology and how to recapture the market. If we have the required technology and an expanded market, then we can compete in quantity. So, our challenges now are not quality. We have no problem with the quality of our products, we can do lower quality, medium quality, high quality, depending on what our customer wants. And our machines are not as in high speed with those they use in the western world because they don’t sell it easily to us. They will give you time and say we don’t sell this one until so and so time; and by that time, they have developed higher speed of the same machines which they use in their countries alone. You will not
say no to their conditions because you don’t have a choice; and they have a signatory with the WTO backing their policy. So, you have to wait.

They will sell to you a brand new machine, but will make sure they defeat you speed-wise. Now, in WTO agreement, Nigeria has to open her market, you have to open your borders; then they will bring in their products, in most cases, sub-standard, and dump them in our markets. When they sell you their machine, it will produce in a month what the one they use can produce in a week. So, how can we say there is a level playing ground to compete—there is no fairness? So, we appeal to the legislatures to look at this issue and know what to do save our economy. We are already in for it; so, let us see how we can amend things without confrontation with the WTO. But I am hundred per cent sure that things will not continue like this. If the generation of today accepts this fact, in the next 10 years, the same generation will get some revolution.

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