TRALAC - Trade Law Centre

Nigeria: Democracy day - commerce and industry sector in perspective

Sunday, 01 June 2008

Source: Leadership Nigeria

Commerce and industry sector in perspective: As one of Federal Government of Nigeria's critical ministries, overseeing the nation's import and export trade activities, and indeed, promoting the non-oil exports, the Federal Ministry of Commerce and Industry remains indispensable to the growth and development of the nation's economy.Even though the ministry has been, within one year in office of the present administration, pre-occupied with putting in place strategies, operational modalities and an action plan aimed at helping to ensure that the ministry plays its decisive role in the diversification of the resource base of the economy, the Yar'Adua administration recorded some achievements within the period under consideration, especially in projects targeted towards promoting export and development.

Other areas that also need to be looked at include strengthening the domestic economy; product and market development; enhancing industrial development and providing effective regulatory framework.

In the area of export promotion and development, the administration has made impressive strides, given the country's 22 free zones, with potential for cumulative investment in excess of over $100 billion. Due to the free zones’ operations, the Federal government has earned excess revenue of about $18 billion from 2007 to date alone. In addition, while these zones have currently provided employment opportunities for well over 400,000 Nigerians at various levels, the Nigeria Export Processing Zone Authority (NEPZA) within the period under review, came up with a policy thrust that has the interest of prospective investors in free zone development in the country, with a view to realising the objectives of some of the 7-Point Agenda of the Yar'Adua administration, including rapid economic growth; development of basic infrastructure and commitment to African integration. On economic integration with other countries, NEPZA has participated actively in regional and international workshops and seminars, where discussions that could help speed up free zone development in Nigeria and other developing nations were held, and these include the regional workshop on export competitive strategy held in Ghana in June 2007. While the 6th AGOA forum was held in Ghana, the second international customs forum, was held in Belgium in June 2007.The current administration has revisited most of the programmes abandoned for some years by the past administrations, among which is the inter-ministerial meeting initiated to assess the level of implementation of the decisions of the Nigeria/Namibia Joint Commission session, whose last meeting was held in 2001, but held again very recently in 2008.

The administration has put in place a committee under the supervision of NEXIM Bank, to study the operations of free zone in the country. In the area of food production in the country, the cropping season in 2006 increased by between 10 per cent and 15 per cent from the previous year and improved quality was equally witnessed, while farmers in the country received better price remuneration coupled with increased export volume and value.On the regulatory framework, the initiative of the present administration through the Ministry of Commerce and Industry is highly complementary to the overall framework for strengthening of domestic institutions and regulations.

Within the period under review, the activities of the ministry in this respect focused on the incorporation of companies; business names registration; incorporated trustees; mortgages and debentures; applications of trade marks, as well as patents and industrial designs.

It has to be noted that the ministry, through the activities of the Corporate Affairs Commission (CAC) and that of the commercial law department, has significantly experienced an upsurge in their volume of service, thus translating to increase in revenue generation. For instance, within the second quarter of 2007, 9,639 companies were incorporated, 10,647 business names registered, 672 trustees incorporated, 291 mortgages and debentures registered with 686 increases in share capital, but all these have corresponding increase of 11,191 (companies), 13,837 (business names), 843 (trustees), 201 (mortgages and debentures) and 611 (share capital) between June 1, and August 17, 2007, which is the period under consideration, and these increased figures represent a rise of about 17 per cent in the incorporation’s activities of the commission. Besides, the commission commenced the process of obtaining international organisation certification for quality management systems (QMS NIS 9001:200).

The certification which is aimed at ensuring continued improvement of quality in service delivery and customers' satisfaction, as well as encouraging and ensuring effectiveness and efficiency in internal processing, has been completed since November 2007. It is gratifying to note that CAC has been accredited full membership of Corporate Registrar's Forum (CRF), with Nigeria and South Africa being the only members of the forum from Africa. The commission has continued to be rated high by international organisations, especially by the United States Agency for International Development (USAID), as it stated in its recent publications that "Nigeria is now meeting or exceeding world class standards in the time it takes to register a business".

In the area of product and market development, under the present administration, about 37,341.7 metric tonnes of agricultural commodities had been inspected and passed by the Commodity and Export Product Inspection Development and the Ministry of Commerce and Industry. The product which valued $40.25 million met the prescribed global quality standard, while revenue accruing from petty charges meant for export stood at N433,628.

On trade legal instruments, the federal government, via the ministry within the period under review, has participated at the meeting of the Economic Partnership Agreement (EPA), held in Accra, Ghana, a development which provided the opportunity for appraising the impact of concluding negotiations with the European Union (EU). Furthermore, the ministry, via the activities of the Consumer Protection Council (CPC), has continued to offer speedy redress to consumer complaints, obnoxious practices of the unscrupulous exploitation of consumers. This, the council has achieved by stepping up inspection of products and services, industries and service providers with a view to enforcing quality standards for all products and services in the country, and this has resulted in the discovery and stoppage of the sale of fake and substandard tobacco products in the country.

Another area of achievement for the incumbent administration is the renovation, maintenance and equipment of the 100 chalet motel recovered from defaulting lessee through the Economic and Financial Crimes Commission (EFCC), after over 70 per cent of the administrative building had been vandalised and abandoned for over a decade. On the country's industrial mandate, plans are in the pipeline to develop Strategic Industrial Development Initiative (SIDI), in order to meet up with the president's seven-point agenda.

The ministry, indeed, has developed a SIDI aimed at adding value to the country's primary agricultural and solid mineral products for consumption, export and industrial applications and this initiative, which is a short-term programme, is expected to target specific industrial sectors where Nigeria has comparative and competitive advantages. In recent times, industries have began to spring up across the country.

The cases in point are Midland Integrated Sugar Company, in Agbede, Edo State; and SOSACO Nigeria Ltd, a dairy products company, in Sango-Ota, in Ogun State, both commissioned by the minister of state for Commerce and Industry, Ahmed Garba Bichi, on behalf of the federal government. However, in spite of these achievements among others, the Yar'Adua administration performed below expectation in some areas during the period under review. In critical areas like affordable shelter for the Nigerian people, in which case building materials like cement and roofing sheets were expected to be relatively cheap, the administration’s assurance and pledges were reneged upon, as government merely toyed with the issue. Despite the fact that the government has given approval to major stakeholders to bring into the country unbagged cement, the current price of the product is still very high and unaffordable for most Nigerians, as the average price of the product is between N1,700 and N2,000 per bag, while the price of roofing sheets, mostly produced in Nigeria, staggers between N10,700 and N11,000 per bundle. Besides, the food crisis currently looming in the country is indeed, a pointer to the reality that the Yar'Adua administration, like that of his predecessor, has been paying lip service to issues concerning the agriculture sector. The president failed to see the need to match actions with words, even as the country is abundantly and naturally endowed. How many farmers in the country can even access the much talked about agricultural loan, with relative ease? Cassava farmers in the country are disillusioned after the government had assured them of very high prospects in that sub-sector. While some could not market produce internationally, others could not find processing factories to process the cassava produce.Though the federal government promptly reacted to the food crisis by importing rice into the country to the tune of N80billion, this is disheartening for the nation's numerous growers of rice, because foreign rice farmers are being encouraged at the expense of ours.While existing industries can no longer operate at full capacity, due to unreliable power supply, those already dead ones are yet to be revived; hence, products manufactured locally are more expensive than imported ones and this why products from China and Dubai have swamped our local markets, even though they are sub-standard. This situation is unhealthy for our economy.

The Commerce and Industry ministry has not really changed for the better since the inception of the current administration. Both the main ministry and most of its parastatals on one side suffer the same fate of being underfunded. The most affected in this regard are the CPC and the Industrial Training Fund (ITF). In spite of their significant contributions to the socio-economic development and growth of the nation. This factor is militating against the expected progress in the Ministry of Commerce and Industry. The administration's seven-point agenda will remain far from being realised if Yar'Adua does not adopt proactive measures that would address salient issues.



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