The Manufacturers Association of Nigeria (MAN) has advised the Federal Government to tread with caution in granting trade access to European Union countries and China to avoid plunging the nation's industrial sector into unimaginable distress.
The association's president, Mr. Kola Jamodu sounded the warning in his address at the 41st Annual General Meeting of the group held in Lagos recently. Jamodu says the country is the target of the industrialized countries of Europe, America and Asia; and that as a result, there is the need to be wary of the level of access to be granted their products in order not to compromise Nigeria's fragile industrial sector.
The MAN president said the incursion of Chinese investors into small vendor businesses like retail trading, textiles, electronics, et cetera was more worrisome because of the faking and other underhand dealings involved in the process of bringing their wares into the country.
"While we appreciate Chinese investment in the country, we do not think they should be allowed to venture into distributive trade", Jamodu stressed.
The country's organised private sector as a whole and MAN, particularly, deserve commendation for their unwavering consistency in offering informed comments and researches on the Nigerian economy.
On several occasions, they have provided alternative national economic performance indexes that interrogated the veracity of official claims and statistics on the performance of the Nigerian economy. Without any grain of doubt, EU countries and China enjoy startling access to the Nigerian market for their manufactured goods.
The country's competitive market-based policy supports the liberalization of trade relations between Nigeria and other countries.
The neo-liberal policy direction seems premised on the notion of limited government's role, and support for the supreme place of market forces in the allocation of resources. Besides, Nigeria is a signatory to the World Trade Organization (WTO) agreement that that sermonizes on trade liberalization.
Unfortunately, however, Nigeria's liberal trade policy, as conceptualized, seems disconnected from the country's historical specificities. Ours, for example, is an economy that thrives on ridiculously low export capacity (except for crude oil), on the one hand, and very high imports, on the other.
In other words, the country is a dependent economy, which makes it vulnerable to the vagaries and vicissitudes of the global economic stage.
The low export slant of the Nigerian economy had resulted from heavy dependence on crude oil export and huge import that have telling effects on the country's foreign reserve and the value of its national currency.
Since the 1980s when the country commenced the implementation of neo-liberal economic reform measures, Nigeria has been witnessing an unmitigated penetration of its economy by EU nations and China, with the latter being feverishly aggressive in retail trading and the textile sector. Imported Chinese textiles, for example, enjoy the economics of scale and lower pricing relative to locally produced textile materials.
The textile factories in Sharada, Kano, Kaduna and Lagos have virtually collapsed as a result of the hostile local business environment imposed by trade liberalization. The FG's spirited bail-out efforts in the textiles sector meant to, among others, create jobs and re-industrialize the economy, will yield little or no dividend without concrete measures to protect the country's larger strategic interest and local businesses.
It sounds paradoxical that a country with a structurally disarticulated and underdeveloped economy like ours would shy away from intervening in critical sectors of its economy, whereas countries in Europe, Asia and North America intervened decisively and played major roles in their national economies when they were at the developmental stage like Nigeria's presently.
The Nigerian government should stop shirking its responsibility in the management of the nation's economy. Urgent steps on policy shifts should be taken to review the unbridled entry of EU and Chinese products into the Nigerian market. Indeed, quite instructive is the recent warning by the United Nations Conference on Trade and Development (UNCTAD), that African countries (Nigeria inclusive) should either watch even their promotion of free barriers to intra-African trade or lose out to foreigners if caution is thrown to the winds.
The UNCTAD 2013 Economic Development in Africa Report says, for instance: "Having cleared the field for increased regional trade and the economic growth that it promises, African nations need to provide the goods to sell to each other, or foreign competitors will fill the vacuum". The import of this crucial advice is unambiguous.
