Executive Order : “Local Content is our last chance to industrialize Nigeria” – Oye
Vassily Oye Barberopoulos was born in 1962 in Lagos, Nigeria. He holds a BA in Economics from Rollins College, Florida, USA and a MIM degree from Thunderbird, School of Global Management Arizona, USA. He is the Managing Director of the Nigerian Foundries Ltd which incorporates two steel foundries, one aluminium foundry, a fabrication company and a Service/trading provider. Vassily is Chairman of Manloc Group (Manufacturers Association of Nigeria, Local Content Group) and represents on NCCF all material and manufacturers stakeholders. He is also member of the Governing Council of NECA, Executive Director of Nexportrade Houses Ltd - a platform to promote non-oil intra-African trade for manufacturers, SMEs and all other stakeholders, - Member of the Nigerian South African Chamber of Commerce and Director of the Nigerian Kenyan Chamber of Commerce. In this interview with Orient Energy Review Editor, Margaret Nongo-Okojokwu, Oye speaks on the recently passed Executive Orders by Nigeria’s Vice President, Prof. Yemi Osinbajo, aimed at improving private and government’s business operations in the country and its impact on standards, manufacturing and local content in the oil and gas industry amongst others. Excerpts.

What does MAN stand for?

MAN is basically the voice of manufacturers; you can only be a member of MAN if you are a manufacturer. And you can apply to become a member and your facilities would be vented. It is basically the main body to talk about manufacturers, about their problems and successes and how to industrialize the country forward. Each country of the world has a manufacturer’s association or industrial association as the case may be and it is tied also to the government of the country because you cannot talk of increasing the Gross Domestic Product (GDP) or Grass National Product (GNP) of a country without talking about the manufacturers. Manufacturing cuts across every sector of an economy.

 

Zeroing it down to manufacturing in Nigeria, what has MAN been doing all these years? We know from statistics that manufacturing contributes very little to the country’s GDP. How has the Association been surviving over the years?

 

Let’s put it this way. Many past governments did not see the relevance of manufacturers. Manufacturing was very big in the 60s and late 70s when most countries that had gotten independence from the colonial masters followed import substitution industrialization. Afterward, with the oil prices plunging, manufacturing took a huge hit. So, prior to the entire period, the fortune of manufacturers dwindled and successive governments saw the organized private sector more as an evil than as partner. The organized private sector was seen more or less as being the problem of Nigeria especially by the many successive military governments. By and large, I think manufacturing has assumed better relevance since we have started having civilian governments since the time of President Olusegun Obasanjo when we put focus on exports grants. But again, MAN should be at a much higher place than it is today. I will say relevance is starting to come back. The fact that our Acting President has signed these Executive Orders promoting manufacturing and it is not coincidental that the three of them have to work together and the aim is to promote industrialization. It is admittance that we need local content for the entire country because local content is our last chance to industrialize Nigeria.

 

On May 18, 2017, the Acting President, Prof Yemi Osinbajo issued three Executive Orders following the campaign for Nigerians to patronise more of the country’s local content and or product and jettison the consumption of foreign goods to boost the country’s economy; What do these Executive Orders mean for MAN and the entire country and what would be the shape of manufacturing going forward?

 

An Executive Order is meant to drive the formation of policies and the framework for implementation. These Executive Orders are basically for public procurement and a framework will have to be set up. Right now, I understand that at the House of Representatives, they are talking about local content for the entire country which is an important aspect. We are hoping that these Executive Orders is the beginning of getting local content for the entire country. This means a lot to the manufacturers. One of the biggest problems we have is the lack of adequate demand for our products. We have other problems including the infrastructural challenges that we all know about but the lack of demands for Made-in-Nigeria products is an important aspect. If you don’t have people buying what you make, even if you are producing at a standard, if you don’t have the liquidity either to expand or meet up to quality standard; that is a huge challenge. At the end of the day, it falls down to each manufacturer, to each company who have to seize this as the way forward. There might be companies who want to have their products patronised but who are not willing to meet the quality standard. An important aspect of these Executive Orders and for local content manufacturing in Nigeria is that when the government issue out tenders, the tenders should not only specify the description but should specify the quality. If the quality is not specified, there will be problems because people will be supplying different types of quality at different prices and that means we are not having standards. One of the aspects that we have succeeded between NCDMB, MANLOC and MAN is to bring the Standard Organization of Nigeria (SON) into our fold because there is a need to start setting for the oil and gas industry the right standards and adopting those standards into Nigerian standards. Once tender is issued, the standard, quality and quantity should be there. Once this is done, those who cannot meet the standard will have to find a way to meet it.

 

Quality is one reason people don’t patronise Made-in-Nigeria goods. What is MAN doing to ensure that products meet the required standards? What is that marginal effort being put in place to prevail on your members to improve on their quality?

 

I don’t agree with your submission. That is what people say but I don’t agree with that all the same. Any company that has survived in Nigeria for over 15 years has only survived because of quality. What Made-in-Nigeria products may probably have is competitiveness with products from China and India where there are export subsidies and so on. Here, we are working in an environment that is extremely harsh from the interest rate being too high to getting financing and so on. An example is the cable industry. People are buying Nigerian made cables because they are of good quality and they are not fake. You can be sure that your house will not get burnt, just like that. In my own line of business, we have only succeeded because we stick to quality standard and international standard. What does it mean to stick to standard? It means you need to have a laboratory that can attest to that quality. One thing is to have laboratories but they must be accredited too so that they can give you the right readings. We have come a long way when it comes to setting standards.

 

So, what are you doing to up your game in that aspect?

 

We have actually brought in SON and we are collaborating with them to create enlightenment amongst manufacturers on the importance of quality. There has been a lot of talk anytime a building collapses maybe due to the quality of cement or steel rods and so on. It boils down to everyone. If you are a quality manufacturer, you should be able to show that you’ve got the equipment, accreditation for your laboratories and your laboratories that your quality is standard. In a country like India, the job is done by government or government agency. Unfortunately, we don’t expect everything from government.

 

During your presentation at the Bonga event, you mentioned Nigerian standard. Can you elaborate a bit more on this?

 

Every country has its own standard and some countries have developed their own while some have adopted theirs. So, Nigeria standard means if you are producing paint for oil and gas; Exxon Mobil has its standard, Shell has its standard, you should have standard. It is an international process of bringing standards together and it becomes the Nigeria standard. That is the job of SON. You will then be able to show which other standard this Nigeria standard is agreeable with.

 

But you see a lot of people flout the ISO standard…

 

(Cuts in) …ISO is only a management standard. It is essentially about how you run your company. Basically, ISO is document what you do what you document, that’s all. Even Mama Osaro who has a bukka can easily get ISO. If you are documenting and you state that you are going produce a product to a standard that is very low and you go ahead to do it; you’ve gotten an ISO. There’s a big misconception about what standards are.

 

Do you have the assurance that when it comes to Nigerian standard, it will be up there with international qualities?

 

It is an international process and once standards are set, it is up to manufacturers to enforce those standards or not. Enforcing standards is also based on those who are issuing out the tenders. So if Federal Government Issue tenders and insist that specified standards are met and ensure that those who don’t meet those standards are disqualified; compliance will come. If we are ready to accept any kind of standard, compliance will be there.

 

Do you agree that policy making and implementation has important role to play in all this?

 

Very well! As a country, we have about 20 years’ experience in local content especially in the oil and gas industry, so there’s nothing new for us to reinvent. It is basically to take all our experience and whatever we’ve done in oil and gas and pass it to the entire country. We should also create an apex organization under the Presidency or close to it that will enforce, monitor and evaluate whatever the Nigerian content emphasizes.

 

What is MANLOC’s relationship with the NCDMB?

 

On NCCF, we represent materials and manufacturers. Recently, we have been put in the committee of the NCDMB. We represent MAN on local content committee in the power industry which is under NERC. So, we represent MAN, we are an arm of MAN on anything that has to do with local content.

Tell us more about the R & D and….?

 

(Cuts in) …It was basically our first meeting and most likely, it will be before the end of September and it is going to involve R & D done in the universities, research organizations and companies. Everybody should be able to come and showcase what they are doing. In the United States, they have succeeded in making a certain product for the last 20 years and here we have never succeeded; there’s still an R & D involved.

 

How closely do you work with the universities especially in the area of research because R & D is very important to manufacturers in Nigeria?

 

MAN suggests to the association on what needs to be done. It is up to each manufacturing company to spend money on it. We make suggestions but the decision is left for the company to make. In Europe and America, you see universities partnering with industries to be able to develop projects and new materials and so on.

 

Have you suggested this government at all as it is done in the United States of America where a company gives students some form of scholarship to learn from the manufacturers?

 

We have all these systems in existence. Research institutes are in existence as well. The challenge is that there appears to be no modus operandi on the way forward. The problem in Nigeria is that there are often too many singular efforts but no concentrated effort. Yes, MAN is pushing for local content, so is the Chambers of commerce and others. But that togetherness is not there. At the end of the day, it turned out that it’s more a divide and rule kind of effort and that’s sad.

 

Thank you very much for your time

 

My pleasure.

 

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