Lack of CBN’s Forex Incentive is Responsible for High Cost of Cables CAMA President

Lack of CBN’s Forex Incentive is Responsible for High Cost of Cables CAMA President

 

Bukola Adubi doubles as the Chief Operating Officer of one of the foremost cable and wire companies in Nigeria, MicCOM, and the incumbent President, Cable Manufacturers Association of Nigeria (CAMA) respectively. In this interview, she spoke extensively on challenges facing the industry as it affects general product’s price in the Cable manufacturing subsector and how the federal government could nip the menace of counterfeit wires and cables in the bud.

Our correspondent, Shola Akingboye captured the media chat during the Business Week media parley. Excerpt:

The reality of inflation and global economic disruption is one the big element we have to deal with. What are the challenges of cable manufacturers at this point as it affects the tumultuous reality of the supply chain, poor infrastructure base and the local content performances of local players?

Adubi:
One thing I am proud to say is that we at the cable manufacturers association have been given a good deal, in the sense that cable has become one of those items that the federal government of Nigeria identified as a major consumer item.
I am sure you are aware of the Local Content Act. The good thing is that is working perfectly in the oil & gas sector.

There is a Nigerian Content Monitoring Board (NCDMB). They have the power to ensure that every service rendered in the oil & gas syndicate uses local content; cable being one of them and we have far enjoyed that privilege.

Also, the federal government through its Executive Orders has mandated federal parastatals to use local content on items in their supplies, cable being one of them.
But that rule is not as stringent as that of local content and this is where we are going to need extra intervention from the federal government. We still have federal government parastatals that still don’t use local manufacturers.
Some of them still bring in foreign companies that imports cables from wherever, and still gets duty waiver simply because they are doing the federal government job.

So this is where our problems lie. There are lots of construction companies, buildings, and even general infrastructure that it is the government that is generally responsible for that project, we cable manufacturers should have a big intervention there.

There is so much that can happen in our industry, but we do not have assurances of projects that will find whatever investment that we chose to do in our country, otherwise we would continue to be where we are.
So this is our prayers with the federal government, and the kind of discussion we would want to have with the federal government. You cannot have contracts and give them to us, and then import the same thing into the country, and on top of that these foreign firms gets waiver on duty. It is very unfair to us the local players.

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At the moment, we bring in a whole lot of our raw materials, there is no proper grade of the raw materials that we need. The problems start from the port where we encounter all lots of problems bothering on tariffs, forbidden items for forex excuses and so on. Ultimately, all this falls on the cost of production and eats into the price of commodities making them expensive, that’s problem number one.

Problem number two; we don’t get allocation for the CBN rate on forex. We at the cable subsector are deprived of all sorts of CBN interventions for manufacturers. To buy raw materials, we have to buy the black market, raising our funds ridiculously and there is no magic here that we have to be more expensive. So they don’t use us because we are more expensive, we have no incentive on our raw materials, and they get more prospects.
On top of that, they are getting a waiver on their duty, and then of course it will be a lot cheaper for them. This is where the problem is.

These are areas that the federal government can help. They need to make life much easier for us, we would grow, and we would continue to make the country proud. This is what we can do, and the more we grow the more employment we generate; the indirect job will be created and there will be lots more for people to do.

Let us look at the prospect ahead for cable manufacturers this year, what do you see facing the market in the second half of the year into 2022?

Adubi:
When it comes into the election year, there are always big loss indices because everything is kind of on hold. Everybody wants to be sure that they dont take decisions that will get thrown back to their faces.
We are going to have a lot of brake in the system till the half of next year when there will be a transition from one government into another, which is usually due to fear of policy continuity or not.

This is one of the bigger issues with the election year in the country. This also affects the people that are taking contracts, because they run on huge contracts asides from the government’s contracts, but the good thing is that there will still be jobs going on.

 

 

 

 

 

 

As the president of CAMA, How would you describe the influx of imported substandard cable and wire products into the country?

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Adubi:

It is huge problem and I can’t even begin to quantify how big it is. It is a threat to the life and properties of end users, a threat to the industry, a threat to our livelihood, its a threat to our company legacies given the fact that a lot of our companies are old companies. For example, the company I represent MIcCOM is over forty years, some are fifty years, thirty etc. So is a problem we have faced for so many years and it is heartbreaking. It is bad enough that each time we decide against the importers of substandard products, these guys will go ahead to take a step beyond.
So we have to keep on our toes and work with our regulator, the Standard Organisation of Nigeria SON. We have a fantastic relationship with them, and part of my role as the leader of CAMA is to ensure that this problem becomes a thing of the past. It is a problem we can begin to say it happened way back, and we won.

We have SON at the port, to regulate and monitor where these items are brought into the country. Why do you think the problem still lingers?

Adubi:
Undoubtedly, probably 80% of these fake products come in through the port. The guys at the port have a huge role to play. I want to suggest if there could be more enlightenments and more education for the guys at the port. They appear not to know what they are looking for in tracking down counterfeit products. Maybe these importers have been frustrating the port for so long.

What we now have is many cables are coming into the country that has not even been laid off. There are factories that SON is closing up.

There are three range types of substandard cables when they come into the country; they stamped them different names, different companies names. It is this old face of different problems that we keep having without a solution. It is like the same conversation we are having over and over again, and this problem needs to stop.

So the reason why we have the documentation process in the first place is to be able to authenticate products, where it is coming from into the country, who and who is behind it, to show it is ok to come into the country or not, that is the whole idea.

Then what happened, it is either these importers can find their way to the port with fake documents, but whatever it is, it is amazing that they get this documentation done to bring fake products into the country.
I am still trying to figure out how they get their way into the port. Could it be that they make it so good that at the port you cant get it?
But I want to assure you that, if the check and balances with which we that are local manufacturer are monitored are applied, we won’t be having these problems.

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What other steps is your association taking to prevent these items from getting into the main marketplace when it is discovered?

Adubi:
It is one of the reasons we were tasked at one of the meetings we had with SON.
A couple of weeks ago, we were invited to the port, though we discovered that some cables that are insulated with copper cannot be born either. This is due to the environmental hazard it could cause.
What I found them doing makes a lot of sense. You know cables come in the coil of a long line, and they cut it into pieces with a powered saw. They use it in dividing the cables into pieces such that it becomes useless and cannot be used for anything again, except they discard them for people that will use them as scraps. That makes a lot of sense, it will be useful for other industries, including tyres we saw them destroying.

What level of citizen engagement would you suggest in identifying fake cables and joining in the fight to nip the menace in the bud?

Adubi:
There is also the fear factor. I won’t lie to you, some of our members have been threatened by the fact that they were able to identify shops and their ownerships that engage in sales of fake and substandard cable and wires.

So, a few of our people are truly afraid for their lives. What we want to do to fight the menace is there is power in numbers. How many people do you want to kill or threaten among us when we work together? It will get to a point that it is the people doing this that will be afraid of being mob in the long run if they are apprehended trading in fake cables and wires due to the dangers inherent in people’s life and properties.

I’m at a disadvantage if I dont have the power to identify the bad guys out there. The bigger issue is in enlightenment, telling people what to look out for in cables, establishing the fact that these things kill.

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