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Nigeria’s Industrial sector is collapsing – Okolo

On October 29, 2008, Dr. Simon Chukwuemeka Okolo MFR, was elected and inaugurated the 48th national president of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA). This made him the leader of the Organized Private Sector (OPS) made up of NACCIMA, MAN and NECA. In this interview he speaks on the need to intensify efforts to instill in the psyche of the ruling class that Nigeria can never industrialize if the rough and rocky road  is not made smooth.

NACCIMA president, Dr. Simon Chukwuemeka Okolo...industrial sector in a state of collapse

AS  president of NACCIMA, could you outline some steps the chamber has taken to revamp the country’s economy?

In keeping with its objectives of promotion, protection and development of all matters affecting business; encouragement of an orderly expansion and development of all segments of the nation; contribution of ideas for the overall economic stability of the nation, encouragement and promotion of the nation’s private sector and provision of a network for national and international business contacts and opportunities among other things, the Nigerian Association of Chambers of Commerce Industry, Mines and Agriculture (NACCIMA) the umbrella body of all chambers of commerce in Nigeria – all city, state and bi-lateral chambers, business/professional association and corporate bodies have undertaken the challenge of sounding up government on the infrastructural nightmare hindering Nigeria’s march to industrial and economic greatness, while encouraging members with business best practices under Nigeria’s crippling business environment.

Since inception in 1960 NACCIMA has not relented in encouraging and availing the ruling class; offering solutions to Nigerian’s economic and social problems, the importance of enthroning a private sector led economy even as it positioned  members on the path to become leading players in the nations economic growth effort. Apart from its high commitment to the success of the enterprise of all the companies of her members by offering programmes and services geared to serve the business needs of its membership, NACCIMA has never got tired of working to achieve industrial harmony in the country.

Under NACCIMA, chambers of commerce movement in Nigeria has remained well organized and structured not only to coordinate development of businesses’ but are also working hard to ensure that most government policies are motivated by true needs of the people and not from mere immediate political considerations. In order to succeed in this effort NACCIMA has continued to embark on research activities on economic and social issues affecting businesses and the Nigerian economy even as it submits continually input (pre/post)  annual budget to the federal government.

The African Development Bank has warned that Nigeria’s economic growth would slow down by four percent this year, from six percent recorded in 2008 meaning the country’s economic growth would slide further, a phenomenon ADB blames on OPEC oil quota and low investment. How would you react to this?

As I have always said, our leaders must stop paying lip service to the repositioning of the agricultural sector and embark on serious cultivation of Nigeria’s cash crops – palm oil, cassava, cocoa, groundnut, cotton, cowpea, millet, etc. to diversify the economy from over dependence on oil back to agriculture. The current efforts of government to address the massive infra structural deficit in the country must be sustained. This will help increase Nigeria’s industrial goods production and export, that way we can run away from the hiccups of oil and OPEC quota. Also, government must rise to its promises of providing security and infrastructure for Nigerians in the face of rising waves of criminality in the country which has also adversely effected and contributed to low investments in the country.

The ADB also raised an alarm that the global financial crisis has eroded benefits accumulated over the years of reform, meaning that many will fall back into poverty. How can the country  come out of the crisis particularly as the set back appears to be beyond the control of the country’s economic planners?

Government must set up stimulus packages to resuscitate the various sectors of the economy that could no longer obtain credit from the banks which has become cautious of lending money to institutions as a result of the world financial crisis. Government should as a matter of urgency resuscitate the ailing industrial sector for it to grow and create jobs to employ people.

This brings to the fore the importance of growing the private sector to be the real engine of the economy as it is obtained in other economies. It is a viable private sector that can help government alleviate poverty through creation of gainful employment.

What tools do you think would help to shape and improve our business environment that would in the end contribute to market development, overcoming traditional infra structural constraints and reduce cost of business?

NACCIMA has consistently proposed the use of public-private partnerships arrangement to address the huge infrastructural deficit in Nigeria, this will reduce the high cost of production experienced in the country today occasioned by Nigeria’s huge energy deficit. The deficit infrastructure has made it difficult for manufacturers to produce the installed capacity of their plants (low capacity utilization). Government must mean its fight against corruption and lead by example. The high rate of corruption in Nigeria has done serious harm to the economy. It has pauperized the country and made it impossible to fund projects that will lead to our economic advancement.

The Federal government recently accused organized private sector of smuggling products, faking, dumping and evading customs duty thus messing up the nation’s economy big time. How would you react to that?

No real industrialist who operates as a NACCIMA member engages in such vices as you mentioned. Government has to address the faulty monetary system that seems to encourage numerous bureaux de change and other speculators who control the bulk of the nation’s available foreign exchange, this has rigged up naira exchange rate. This in no small measure has  hurt the productive sectors as it has channeled greater part of available foreign exchange to treasury looters and smugglers, who are on open mission to wreck the economy. The manufacturing sector as a result has remained dead even as the ports are choked with goods that ordinarily Nigeria can manufacture. So government can do its home work and stop apportioning blames or it can dust from the archives the extant CBN Act and the fiscal responsibility Act 2007.

Mining activities is fast on the decline due to poor funding. How can the chamber make the sector serve as catalyst towards achieving a buoyant economy?

The colossal neglect of the mining sector of the economy by successive governments in the country has done great harm to the economy. NACCIMA will continue to encourage public-private partnership arrangements geared toward resuscitating the sector. This can be exemplified by the recent partnership arrangements by the Enugu State Government and the IPP of Prof. Barth Nnaji to use coal to produce electric energy. We shall continue to encourage such joint efforts in various segments of the mining sector to make it contribute once more to the economy.

How in your view can Nigerian economy become competitive enough to meet the target of having its population living above one dollar per day by year 2015?

Presently Nigeria’s industrial sector is in a state of collapse-operating under crippling environment of infrastructure deficit and government policy inconsistencies. This harsh operating climate has added to operational cost of manufacturers through purchase of additional generating sets and ceaseless purchase of millions of litres of gas to run their plants in the face of Nigeria’s continual electric power blackouts. This high operational cost has resulted in low capacity utilization for manufacturers in the country as well as high cost of goods that had pitted manufacturers in steep competition with foreign manufacturers with cheap industrial goods. Several Nigerian companies have collapsed as a result.

However, the federal government has promised to provide 6000 mega watts of electric power generation by December 2009. But this can never address the huge energy deficit hampering Nigeria’s industrial sector. Nevertheless, if generated it will be a good start. If government will also fulfill its promise of further increasing the mega watts to 25000 by the year 2015 industrialists could begin to heave sighs of relief. But even 25000 mega watts will still not address the huge energy needs of Nigeria. Government must sustain the process, but if the current promise is realized, efforts being made to attract investors into the country as well as job creation can begin to yield fruit.

Government must seriously work at addressing our faulty monetary system that has resulted in continual sliding of the naira to the dollar, excess liquidity in the system that has led to high inflation that has widened the gap between the rich and the poor in the country. Also for the Nigerian economy to be competitive enough, CBN must operate good monetary system that will lead to low interest rates in the country.

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