The Nigeria Employers’ Consultative Association, NECA, has decried the stifling of manufacturing and other businesses by those it described as principalities and powers in government.
The group also said it was painful to talk about business closures and job losses in the economy as a result, lamenting that unemployment and insecurity remained some of the consequences.
In an exclusive chat with Vanguard yesterday, the Director General of NECA, Adewale-Smatt Oyerinde, who made the iobservations, said: “To talk about business closures and job losses is like asking a father that has lost some children to list how many children he has lost.
‘’It will be a disheartening scenario for him. If a business closes down, let us say when GSK left, it had over a thousand direct employees and many indirect employees. These are businesses that are doing supplies to GSK.
‘’Once GSK leaves Nigeria, we have incapacitated 1,000 able-bodied Nigerians from their ability to generate income. We have incapacitated school owners the ability to collect school fees from those 1,000 people because most of those 1,000 are probably parents.
‘’We have also incapacitated the landlords of those 1,000 individuals from the ability to collect rents. We have incapacitated the woman selling tomatoes because if you do not have disposable income, you probably will not patronise those market women. The consequential effect is massive.
“Now look at 50 companies with 1,000 staff each, making 50,000 individuals that lost their jobs. You can now contextualise the effects of their economic states because they can’t patronize or spend. Disposable income for them is zero.
‘’Then, they will feel the effects first line as well as every other person they are servicing. All of these also have consequential effects. It is a massive challenge. Unemployment and insecurity that we see now are part of the consequences.
“At the last count in the manufacturing sector, we reported over 200 billion unsold stocks. It is also a consequence of the inability of the consumers or household to purchase. If they don’t purchase those stocks, there is likelihood that those stocks will expire.
‘’If they expire, then the business cannot sell. That is a business that has collected loans. That is the main reason we need to address all these contradictions. The businesses that have collected loans, let us say the loan from BOI (Bank of Industry), and that same business is unfortunately located in the band A area.
‘’It unfortunately has to pay all these taxes, levies and fees. How will that business survive? Yes, you have supported the business with a low interest loan, or even a grant. But the business is facing principalities and powers; some of them call themselves regulators that are positioned to stifle that business so that it does not survive, and it does not fulfill its potential. These are the critical issues.’’
On the influx of fake products, he said: “What influences a buyer, everything being equal, is quality and price. But when everything is not equal, there are parallels. When everything is not equal again, what influences the purchasing of the lower and middle classes is price.
‘’At this point, you cannot go for quality because quality will be directly proportional to cost. So because your disposable income is less, you look for the closest substitute. What will influence your purchase will be price.
‘’That is the dynamics of what we currently have. Because the disposable income of an average Nigerian is low, so it is secondary whether the goods are substandard or not, provided it can provide some shade of quality.
‘’What influences purchasing when things are not equal, like now that the purchasing power is low, is the price. That is why substandard goods are thriving. Because those goods come from abroad, they are not experiencing the kind of strangulation that an average manufacturing firm is struggling with here.
‘’So they produce cheaper from those areas and Nigerian business is not able to compete within the context of the pricing.’’
Peoplesmind
