THE EFFECTS OF UNRESTRAINED IMPORTATION IN INDIGENOUS INDUSTRIES (A CASE STUDY OF NIGERIA BREWERIES PLC)
ORIGINE OF THE SUBJECT MATTER.
Shoal Fadeyi (2003:26) recorded that Nigeria custom service realized about N31.4 billion was posted import duty within 3 months N15.3 billion was posted just in march whileN16.2 billion and N16.8 billion were realized in April and may respectively. A very substantial amount it is isn’t it?. But this portray to save extent the rate of goods importation into the country’s territory. This practices never starts in a jiffy, its origin follows a chronological order.
Through some frenzy elements of importation do occur before the advents of the while merchants and missionaries in the early 19th century, but the concept of importation started taking proper shape with their (the whites) discovery of our Nation’s coast. Importation then was on spirits, firearms and other products of European’s industrial revolution. And the cocoa, rubber, cotton and palm plantation was shun. More pressure were diverted to any thing foreign to actually how rich we have grown.
During the regime of president Shehu Shagari, the concept has crested its Zenith. The border was relatively thrown open eve rice which we locally produces in commercial quantity in many parts pf our country like Abakalike, Anam, Igbariam AND MANY PARTS OF THE north was abandoned for foreign ones.
Things continue thus that “trade statistic” put beer importation alone country live in fool’s paradise, those who can read the hand wring on the wall shout themselves raucous.
Alhaji Shehu Shagari in his 1980 budget under import licenses subsection critism of this to say. “The administration is aware of public critism of the procedures for the granting of import licenses. Accordingly machinery will be set up to streamline the procedure”
The effectiveness of the said machinery is for all to see. At the receiving end of these are our local industries streamlined to 17% from the period, 1958-1963 to 14% from the period of 1970 to the early 80s. The years 1981 specifically recorded the whopping sum of N13 billion to be seen by Odo (1998: pg. 170) as the peak of importation in the country . Nigeria external debt cair heap shopping it self to N12, 179.7 million ($6.1) billion) in 1986.
Things continue degenerating from bad to worst that in 1999, the growth rate of the GDP was 2.7 percent as against his targeted figure of 3percent. Industrial production aggregate index have to hose- drive from 3.7 percent in 1998 to an appalling 1.4 percent in the subsequent year of 1999.
Manufacturers association of Nigeria be moaning their woes at the hand of this unchecked importation in the year 2000 said that about 150 companies within its fold closed shops in 1999. and unsold inventory mounted to N3.5 billion. But this is just the beginning. with the discovering and shifting of attention of Nigerian business men to Dubai, a greater blow was dealt to our economy. The local producers can’t simply sellout their producers many more and have to take a bigd8ive into closure.
Today, our country have turn to be one of the biggest dumping ground in the world. To get employment became as hard as going to heaven alive for few industrialist can afford to risk their capital in a country where imported goods keeps on flying in just like a weaver bird spinning it’s nest.
- SCHOOL OF THOUGT WITHIN THE SUBJECT AREA.
Two distinct schools of though can be said to be inherent within the subject area.
- Those who believe that the poor performance of our indigenous industrial have a lot to do with this unrestrained importation (external factors school of thought, and
- Those who that our industry are suffering as a result of internal maladies (internal factors school of thought).
- EXTERNAL FACTORS SCHOOL OF THOUGHT.
This school of thought vehemently stamped their fact on the fact that our indigenous industries inefficiency and ineffectiveness has a lot to do with excessive importation.
Prominent among them is the late action president of Nigeria manufacturers association ?(M.A.N) Mr. Rufus Giwa. In one of his numerous articles, critising the hydra headed monster of the importation he saw the critical problems that are besetting the manufacturing sector among others thus
“ Lack of level ground for local industries to compete with imported finished goods waiting to premature and uncoordinated pursuit of import liberalization. Massive influx and dumping of all manner of imported finished goods, including fake and standard, as well as second handed producers”.
Also under this marquee is Tunji Okegbola. His article to “Daily Time” dated 21 June 2000 and titled”. Ailing industrial sector”, he was much worried about our country’s continue witnessing of deluge in imported finished goods from the west and Asia. He added up correlation the for below installed capacity production of our industrial sector to the threat of importation.
Sir Nick Odo N. in his book “ Introduction to public finance”, saw the said excessiveness in importation level as the factor that have led to the train – problem of poor local industrial performance and external debt accumulation.
The current president of (M.A.N.) Chief Charles Ugwu also speaking on behalf of manufacturers at their annual general meeting in Lagos this years, enjoined the government to engineer a new initiative with the private sector to reduce importation rate and its resulting consequence of dumping from other countries. He coined that such move will go a long way in putting the economy on the path of growth..
The organized private sector (O.P.S) . In their own angle has always pressured the government to take measured to address the issue of dumping foreign goods. In social dialogue with government, the OPS never failed to impress on government the need to address the of dumping. In their year 2000 pre- budget memorandum, they urged the government to take measures to address the issue. According to them, the world Trade organization do not prevent member countries from taking measures to protect local industries.*
- INTERNAL FACTORS SCHOOL OF THOUGHT.
This school of thought believed that our country have left their pot of internal problems unwashed, hence their industrial food can’t heep burning. They dismissed by the wave of the hand the much emphasis ascribed on importation by the external factors school of thought as the corsage of our local industries loose .
But instead, they correlated it to below internal factors line:
- Poor investment climate and .unfavorable government policy
- Inadequate and creatic power supply.
- Poor communication network.
- Water scarcity.
- Throat cutting tax by the government.
- Poor consumer buying capacity and so on.
Major proponent among them was Chris Uba. In one of his articles to “Daily Champion” titled “the real bane of industrial growth,” he stated: “The National Electric power Authority (N.E.P.A) supplied 1600mega watts of electricity as against the industrial demand of over 4000 mega watts. This has inevitably given rise to frequent power outage in the country. Many manufactures have had their plant changed on account on the poor power supply.”
He further stressed that some of our local industries spend up to #3 million every month on diesel alone. This he said is beside an additional #3 million on the event of petroleum scarcity.
In support this is Willy E. Nwoko, (1999:p.21), who pessimistically viewed N.E.P.A as collapsed. Telecommunication Plc (NITEL) as another factor hamstringing economic activities in Nigeria. He claim they are only able to acquire 77,000 terrestrial lines and about 370,000 mobile lines, a far cry from the over 3 million outstanding application. This he pointed add extra cost and of business to our indigenous industries.
Other major figures under this view are neimeth international
Pharmaceuticals chairman and managing Director, maxisam Ohabunwa ,and Dr.mr. Dayolawuyi, the managing director of Dunlop Nigeria Plc. They chorused that this albatross of local industries wield a lot of power and they attributed their still remaining in business to the grace of god.
Other proponents are Chidi Ozochi (2000: pg 86) who sited other problems like poverty, political insatiability, corruption, and structural problems as other figures in the arsenal of this blow to our local industries.
Adeboye Badejo, president, institute of chartered accounts of Nigeria equally harped on the issue of poor port condition and interest rate as militating against our industries.
Conclusion can be made on this broad school of thought with that Chris Uba said analyzing the 2000 budget proposal: that until these problems are checked, the problems of our local industries remain undressed.
2.3 THE SCHOOL OF THOUGHT RELEVANT TO THE STUDY*
The external factors school of thought stand our to be much relevant to the problems of this study .they uphold the Imperialism of excessive importation and dumping to the abysmal performance of our indigeneous Industries. The pin point the impact of severe competition between foreign firms and our teething industries as our of the constraints towards better performance by our local industries.
This late former president of MAN Chief Rufus Giwa hence while analyzing the situation articulated the critical problems besetting the manufacturing sector among other things to include massive influx and dumping of all manner of imported goods. Some of those goods are substandard and fake, and render level ground competition between then and our locally made our impossible.
The managing director of consolidated Breweries, Mr. Jean Poizat, criticizing the government for not checking the rate of importation in the country ended up seeing it as penalizing of those who create wealth for the Nation.
Tunji Okegbola (2000, p.8)
“more worrisome is that our country continue to witness a deluge of imported finished goods from the west and Asia. As a result of this threat, the sector is not only producing far below installed capacity, but also collapsing”.
Also professor S. N. Essano, analysis 1980 federal budget proposals explained that to protect our local industries from this Herculean threat of importation. The federal government can’t heep but to increase the items in its import prohibition list.
So this school of thought believe that external factors (importation) is the arrow head for the critical stage of our indigenous industries. They see it as the harbinger of unemployment, inflation, poor value of our currency and generally, degeneration of our nation’s economy.*
- DIFFERENT METHOD OF STUDYING THE PROBLEM. METHOD OF SAMPLING.
The method of sampling applied in this research work is stratified random sampling method. This is to ensure the sample was a well representative one and also to hear from all angles how they felt about the issue under study.
The research work was aimed at collecting information from the case study to see likely competition’s (foreign) they are contending within the market and how it have affecting their performance.
METHOD OF DATA COLLECTION
The method of data collection can be categorized into two major part
- PRIMARY METHOD: Under this category two distinct means was adopted.
- ORAL INTERVIEW: Oral interview were employed in soliciting information from people who think they have valuable wealth of knowledge to the people and other respondents that were easily accessible.
To avoid interviews bias, the project group make sure they collect the information directly from this respondent rather than from any intermediary.
- Questionnaire: this contributed immensely towards the gather among of primary data needed in this research work. To reduce inconvenience and increase the chance of obtaining favorable Reponses, multiple choice questionnaire were used in the solicitation of information.
SECONDARY METHOD: Difference means used under this category are as follows:-
- libraries, textbooks and past project works.
- Magazines and newspapers.
- Journals and periodicals.
Tabular form is used in the presentation of data collection from respondents.
DESIGN AND COLLECTION OF QUESTIONNAIRES.
Questionnaire were designed and randomly distributed though the organization used as case study (Nigeria Breweries PLC).
A representative sum of ten people were randomly selected from the various echelons and departments in the organization for this research work.
THE SCOPE OF THE STUDY
The scope of the study was restricted to Nigeria Breweries PLC situated at 9th mile corner in Enugu state and in the Eastern part of the country Nigeria. The limited scope enables the research term to be more detailed leaves no stone unturned in their work..
From the length covered so far, it can be deducted that the industrial sectors country cannot be the economic emancipating of the country be over- looked. But in a country like Nigeria where there capacities and existence were threatened by some firms like importation, one can’t heep wondering what the future holds for such a country.
Many writers and some stakeholders may point at some internal factors like poor infrastructure, unfavorable government policies, power supply the rest as cause, but the truth remain that the hydra-headed monster of importation still stand out as the chief tormentor of our indigenous industry. It subjects our indigenous products to in due competition from their advance foreign counterparts. It also fill the country with fake and substandard goods that normally mislead the customers which way to go due to the low price of these counterfeit goods.
The most annoying is that the government which suppose to put forth a resistance towards this ugly situation, comfortably sit on the fence with arms supporting their checks. This research work leaven no stone unturn to elicted the extent of damage and hardship that this importation concept have done to our local industries.