Worried about the lack of competitiveness of local manufacturing companies as a result of inadequate infrastructure, operating environment and low patronage, manufacturers have charged the Federal Government on the need to revisit its procurement thresholds and integrate them in the value-chain.
According to the Manufacturers Association of Nigeria (MAN), integrating local producers in the value-chain through policy frameworks will help revive the ailing sector as well as promote job creation efforts of the real sector.
To this end, MAN has concluded plans to promote the cause by deepening intra-membership patronage among its members by first sourcing inputs from one another before contemplating import, noting that the Federal Government can boost this effort by increasing patronage of Made-in-Nigeria goods.
Through the intra-membership patronage, MAN hopes to ensure that the community working capital of operators will continue to revolve in the sector and in the economy without significant import leakages.
Specifically, MAN recommended the adjustment of the Bureau for Public Procurement thresholds for local companies/suppliers of works and goods to N30billion and N10billion respectively, from a threshold of N1billion and N100million.
Furthermore, the manufacturers want government to set a realistic margin of preference to 60 per cent in favour of Made-In-Nigeria goods, especially across the tiers of government, as well as promote an increased participation of Small and Medium Enterprises in public procurement to a minimum of 40 per cent.
Addressing journalists in Lagos, yesterday, the President of Manufacturers Association of Nigeria (MAN), Dr. Frank Jacobs, said that using public procurement as a strategic fiscal tool will assist the nation to develop the manufacturing sector, adding that continued patronage of foreign goods will put the local economy at a detriment.
Jacobs said government’s quest to promote patronage of locally produced goods can best be achieved if the executive order on such patronage is based on sector-specific margins of preference (MOP), whereby the peculiarities of each sector are recognised.
He identified five sectors under MAN sectoral groups that have been selected for the MOPs, with special recognition for small businesses in order to improve manufacturing output growth, additional investments, income, employment and government’s tax revenue.
The sectors included in the MOP are textiles, wearing apparel, carpet, leather/leather footwear; chemical and pharmaceuticals; pulp, paper and paper products, printing and publishing; basic metal, iron and steel and fabricated metal products; and wood and wood products industry.
“I will like to solicit further patronage through procurement value-chains and the effective implementation of the executive order, using the margins of preference of at least 35 per cent in favour of products that are made locally. Although, the MOP for the five pilot sectors averaged 63 per cent, MAN suggests 35 per cent for starters.
“In the same vein, I implore all Nigerians to keep our factories running and our teeming youths gainfully employed by patronising Nigerian products and dropping the bloated appetite for imported products,” he added.