If 5-6 years ago you had commenced building of a factory that manufactures textiles you may probably still be struggling to break -even. You would have been faced with doing business in a harsh economic environment burdened with power failures, high interest rates, inadequate forms of transporting your goods, multiple state taxes and competition from smugglers. Of all the challenges mentioned above, the Federal Government has decided to remove one; Smuggling!!!
A few days ago the Federal Government announced that they had lifted the ban on importation of certain items such as textiles, furniture and also increased the age limit on imported vehicles. Their reasons were basically that the Government was loosing a lot of revenue to smugglers due to our porous borders and the inability of the customs to curb smuggling.
As frivolous as their excuse may sound, Sadly, that was all we were told was their reason for the ban. The government in typical fashion did not come up with statistics of how much is lost to smugglers everyday especially when compared to how much is saved by having our factories run. The number of jobs that might be saved or lost is with the lifting of the ban is also not highlighted. How much tax revenues they hoped to get from this was also not highlighted.
The Minister of Finance hoped to placate minds by asserting the revenue obtained from the high tariffs imposed on the now banned items will be mostly channelled to the Bank of Industry who will in turn lend these money to small businesses and textiles as well. A futile move that’s always destined to fail. The Government is robbing Peter to pay Paul.
Supporters of lifting the ban also sight the need to booster international trade as a reason for their support. But then, if there has been one big lesson of the Global Economic Crisis its the need for countries to protect their borders, local industries and thus the larger economy. Rather than strengthen the borders and root out corrupt Customs officials manufacturers are forced to pay the price. The Government would rather ignore Manufacturers Association of Nigeria and listen to freight forwarders and clearing agents who care less about the local industries.
I am not against curbing illegal importation of textiles but not without rooting out the real causes of the problem. No country can thrive economically when it’s borders are open to all sort of imports to the detriment of local companies. Importation should only be considered if the supply is inadequate to meet demand especially if the industries are confirmed as producing at full capacity. For Nigeria to become a leading economic power it MUST revive and safe guard it’s real and productive sector. They can’t be economic development without it.
This is no more than another policy summersault and another reason not to invest for the long term in Nigeria.
