June 15, 2009

We are Creating more Poverty

By Naomi Uzor

In this interview conducted by Naomi Uzor, the President of the Lagos Chamber of Commerce and Industry, LCCI, Chief Solomon Onafowankan, believes the way things are in the country at the moment, the leaders may just be creating more poverty instead of taking people out of it. Excerpts

Would you say industries have fared better in the 10 years of democratic rule in Nigeria?
It is sad. The situation of the manufacturing industries is currently at four per cent. It’s so pathetic and the reason is poor power supply. Power accounts for so much of production cost. President Yar’Adua came to power and said he needed some time to find out why so much money that was spent during Obasanjo’s regime has not brought about increased power supply.

That took him about one year to do and even though he said in 100 days he would declare emergency in the sector that has not been done. In 1999, when Obasanjo came to power, in the first three years, the production capacity moved from 30 per cent to about 60 per cent but later dropped to between 30 and 40 per cent.

Would you say the democratic system is better than the military rule, when it comes to the industrial sector?
Of course, anytime, even the worst civilian regime is better than the best military rule. Democracy is far better than the military regime.

Is the present government giving enough support to the industrial sector?
Well, my advocacy is that we will keep drawing the attention of the government to what they need to do, how they need to support the small and medium scale, because that is the bed rock of any developing work in the whole world.

Malaysia did it, they were successful, China did it, they were successful, Singapore did it, India did it, and they were successful. That is what the government should be doing, that is what we are encouraging our members to do. The constrain are so enormous we cannot access money because there is no collateral, most of them don’t have, they don’t have power, they cannot afford alternative energy, so all that are inhabiting the progress and we can’t stop shouting.

Over 70 per cent of industries are said to be dead in Nigeria, what do you think is the cause?
The main reason is the cost of production. The cost of production is too high, it cannot be competitive, and so if it is not competitive, the only way out is for them to close down, because these goods are coming in from every where and unfortunately Nigeria is a representative to WTO, which was signed at the time of Abacha. So if you say you have to open your doors, you can no longer impose too many bans, you cannot impose too much of high duty rate.

I think the maximum now, except where you have to use levy is about 20 per cent and if your cost of production is 40 per cent higher than your labour, then you can imagine how much it would be higher for China or India where power supply is taken for granted.

Nigeria has been tagged an import-dependent nation, what is your take on this?
Of course that is what we are saying, because if you are no longer producing and whatever you are producing is too expensive, and people need to consume materials and you are not able to make it, what will happen is that they are transferring your production from here to another country and will be creating jobs there, creating more investments at that end and you are suffering here. So we are creating more poverty instead of taking people out of poverty.

What measures will be the best to curb this situation?
The best way will be for the President to organise the problem in the power sector. He is a listening president and we are appealing to him that his next two years should just be focused on power supply, road transportation, rail transportation and marine transportation.

Now they have promised us 6000 mega watts by December. South Africa, half of our population is doing 45000 mega watts and we are still battling for 6000, it is a shame. During the time of Idiagbon, I was already in the council, there was a time that he called NEPA and said what does it entails for you to give us uninterrupted supply? They gave him a budget, and on top of that, he gave them 25 per cent more.

I’m aware, and for the period that the man was there, there was constant power, which means the problem is man made. So if that will make people to perform, for God sake, let’s do it. If they know that PHCN is too much for federal government to administer, privatise it or allow the states to run it. Give it to states and let them develop it on their own and I’m sure that they will do well, because there will be competition, people will then work hard.