Govt Incentive To Foreign Firms A Challenge To Local Cable Manufacturing Sector – Adubi
Bukola Adubi is the President of the Cable Manufacturers Association of Nigeria (CAMAN) and the Chief Operating Officer of one of the foremost cable and wire companies in Nigeria, MicCOM. In this interview, she spoke extensively on challenges facing the industry in Nigeria and recommended ways the Federal Government can address the challenge of price discrepancy, nip the menace of counterfeit wires and cables and encourage the growth of local manufacturers. Shola Akingboye captured the media chat during the NOG Business Week media parley. Excerpt:
How would you describe the influx of imported substandard cable and wire products into the country?
It is a huge problem and I can’t even begin to quantify how big it is. It is a threat to the lives and properties of end users, a threat to the industry, to our livelihood and our company legacies given the fact that a lot of our member companies have been operating for years. For example, the company I represent MicCOM is over 40 years, there are some companies that are 50 years, 30 years etc. So it’s a problem we have faced for many years and it is heartbreaking. It is bad enough that each time we decide against the importers of substandard products, they will go ahead to take a step beyond, so we have to keep on our toes and work with the Standard Organisation of Nigeria (SON). We have a fantastic relationship with them, and part of my role as the leader of CAMAN is to ensure that this problem becomes a thing of the past.
Why do you think the problem still persist despite the presence of the Standard Organisation of Nigeria (SON) at the port to regulate and monitor items brought into the country?
Undoubtedly, probably 80% of these fake products come in through the port. The workers at the port have a huge role to play. I want to suggest more enlightenment and education for the workers at the port. Some appear not to know what they are looking for in tracking down counterfeit products, maybe these importers have been frustrating the ports for so long. There are ranges of substandard cables when they come into the country they are stamped with different company names. It is this old face of problems that we keep having without a solution, same conversation we are having over and over again, and this problem needs to stop. The reason why we have the documentation process is to be able to authenticate products – where it is coming from, who is behind it – to show if it is okay to come into the country or not. But it is either these importers can find their way to the port with fake documents, or whatever it is, it is amazing that they get the documentation done to bring fake products into the country. But I can assure that if the check and balances with which local manufacturers are monitored are applied, we won’t be having these problems.
What other measure is your association taking to prevent these items from getting into the marketplace when they are discovered?
We have been having meetings and working closely with SON in this regard. A couple of weeks ago, we were invited to the port; we discovered that some cables that are insulated with copper cannot be burnt due to the environmental hazard it could cause. But what I found them doing makes a lot of sense; you know cables come in the coil of a long line, so they cut it into pieces with a powered saw. They use it in dividing the cables into pieces such that it becomes useless and cannot be used for anything except they discard them to be used as scraps.
What level of citizen engagement would you suggest in identifying fake cables and joining in the fight to end the menace?
There is the fear factor, I won’t lie to you. Some of our members have been threatened because they identified shops and their ownership that engage in sales of fake and substandard cable and wires. So, some of our people are truly afraid for their lives. However, we intend to leverage the power of numbers to fight the menace. How many people can they threaten when we work together? It will get to a point that it is the people engaging in the illicit trade that will be afraid of being apprehended due to the dangers it poses to people’s life and properties. The bigger issue is in enlightenment, educating people on what to look out for in cables and establishing the fact that the fake kills. Another big element we have to deal with is the reality of inflation and global economic disruption.
What are the challenges of cable manufacturers in terms of the reality of the supply chain, poor infrastructure base and the local content performances of local players?
One thing I am proud to say is that we at the cable manufacturers association have been given a good deal, in the sense that cable has become one of those items that the federal government of Nigeria identified as a major consumer item. I am sure you are aware of the Local Content Act, the good thing is that it is working perfectly in the oil and gas sector. The Nigerian Content Development and Monitoring Board (NCDMB) have the power to ensure that every service rendered in the oil and gas sector uses local content; cable being one of them and we have so far enjoyed that privilege. Also, the federal government through its Executive Orders has mandated federal parastatals to use local content on items in their supplies; cable being one of them. But that rule is not as stringent as that of local content in the oil and gas sector being enforced by NCDMB; this is where we are going to need extra intervention from the federal government. We still have federal government parastatals that don’t use local manufacturers. Some of them still bring in foreign companies that import cables and get duty waiver simply because they are doing the federal government job. This is where our problems lie. There are lots of construction, buildings and general infrastructure projects that government is generally responsible for, local cable manufacturers should have big intervention in them. So this is our prayers to the federal government, and the kind of discussion we would want to have. Government cannot give contracts to us and then import the materials into the country, and to make matters worse, the foreign firms get waivers on duty. It is very unfair to us the local players. At the moment, we bring in a lot of our raw materials. The problems start from the port where we encounter lots of issues bothering on tariffs, forbidden items for forex excuses and so on. Ultimately, all this falls on the cost of production and eats into the price of commodities making them expensive, that’s problem number one. Problem number two; we don’t get allocation for the CBN rate on forex. The cable subsector is deprived of CBN interventions for manufacturers. To buy raw materials, we have to buy the black market and this raises our cost ridiculously making us more expensive. So they end up not using us because we are more expensive, and this is because we have no incentive on our raw materials, whereas they are giving duty waivers to foreign firms making it cheaper for them. This is where the problem is. These are areas that the federal government can help to enable us grow and continue to make the country proud. The more we grow the more employment and indirect jobs we generate.
What is the prospect ahead for cable manufacturers this year, what can you project for the market in the second half of 2022?
When it comes into the election year, there are always big loss indices because everything is kind of on hold. Everybody wants to be sure that they don’t take decisions that will get thrown back to their faces. We are going to have a lot of break in the system till the half of next year when there will be a transition from one government into another, which is usually due to fear of policy continuity or not. This is one of the bigger issues with the election year in the country. This also affects the people that are taking contracts, because they run on huge contracts asides from the government’s contracts, but the good thing is that there will still be jobs going on.
