An address by President Ibrahim Babangida at the 15th Annual General Meeting of the Manufacturers Association of Nigeria at Eko Holiday Inn Victoria Island, March 12, 1986.

 It is a great pleasure to address this august gathering on the occasion of the 15th Annual General Meeting of the Manufacturers Association of Nigeria (M.A.N.) Although since assuming office, this is my first meeting with your Association, I have had both formal and informal interactions with a cross section of members of your Association.

 I am happy to observe that the objectives of your Association include the desire to develop and promote the contribution of the manufacturing sector to the national economy and equip yourselves for influencing public policy in the areas of industry, labour relations, commercial law, etc. In this connection, I should state that during the preparation of the 1986 budget, the consultations with and contributions by your Association were found to be very constructive and useful. In keeping with the open door policy of this Administration, relevant government organs had dialogues with the organised private sector in order to evolve realistic programmes and fins; solutions to the economic problems facing the nation. It is the intention of Government to continue to involve the organised private sector in the management of the national economy in the years ahead.

It is gratifying to note that your Association has already held a seminar devoted mainly to examining the 1986 budget. You will discover that on the whole, the main concern of this Administration is to find solutions to the critical and recurring problems plaguing this economy. There was a tendency in the past to gloss over such problems because they were considered extremely difficult. In putting the 1986 Budget together, we took the opportunity to come to grips with these fundamental problems which require restructuring of the national economy. As you know, any restructuring exercise is painful, but with a clear understanding of the issues at stake, perseverance and dedication, I have no doubt that we will overcome the present difficulties.

I am aware of the fear being entertained in certain quarters regarding the ability of the country to accomplish the tasks set out in the budget; these fears are due mainly to the deteriorating situation in the oil market. It is common knowledge that oil has been for sometime the engine of growth in our economy, contributing at a certain stage, more than 90% of the country’s foreign exchange earnings. While we are very much concerned about the falling prices of oil, we believe that oil prices will stabilise in the near future. We should not lose sight of the fact that artificially maintained low prices for oil, has great potential for causing disruptions, not only in our own economy, but also in the economies of the advanced industrial nations which are themselves major producers of oil and in which the oil companies and their bankers play a pivotal role in the financial system. Such instability can lead to bankruptcies and plunge the whole world into a new round of recession.

It is clear therefore that the on-going battle of nerves in the oil industry cannot go on for too long. Whatever happens, we must now embark on an aggressive programme of promoting non-oil exports. This is the true solution to the problem which the recurring instability in the oil industry poses to the growth and orderly development of our own economy. It is indeed a sad commentary on the resourcefulness of our people that in spite of our abundant natural resources and the variety of industries across the nation, the country is still virtually a mono-product economy. This fact makes us very vulnerable to external pressures, over which we have little influence or control. It is therefore not only desirable but in fact imperative, for the country’s economic survival and self-reliance, that we should develop our non-oil exports. Indeed, this factor constitutes the rationale behind the determined policy of this Administration to restructure the economy away from oil and place increased emphasis on agriculture and industry.

There have been calls in recent times for a review of the Budget in view of the collapse of the price of oil. Our response to these calls is simply that a review is premature at this time when the market is still unsettled and a new and stable price, cannot be determined. Whenever the market settles down, we will re-assess the situation and decide whether or not a review of the budget will be necessary. Ladies and gentlemen, we must do all that is possible to ensure that Nigeria retains her pride of place in the world market  for the traditional products like palm oil, palm kernel, cocoa, coffee, cotton, groundnuts, sheanuts, chillies, etc., either in the processed or semi-processed forms. We’ must also exploit whatever potential we have, for the production and exportation of industrial goods such as indigenous textiles, wood products, processed foods and drinks based on local raw materials, etc. Nigerian-made-products command wide acceptability in the ECOWAS sub-region. It is pertinent to recall here that the package of export incentives introduced recently were designed to make the prices of our products competitive in the world market. Your Association should take up the challenge in order to free the country from overdependence on crude oil.

Mr. Chairman, you mentioned in your address that the Government should take over the Raw Materials Committee established by your Association and expand it into the proposed Raw Materials Council. This is a good suggestion and it will be carefully looked into by Government. I am also aware that some industrial sub-groups are working out arrangements to develop raw materials for the common use of their factories. This is a welcome development. Let me however mention at this juncture that the Raw Materials Research and Development Council being proposed by Government will be an umbrella Organization to co-ordinate various research efforts and evolve broad policy guidelines and action programmes for raw materials acquisition, exploitation and development. The membership will reflect the different interest groups, including representatives of industries, research institutes, Government, N LC, etc. I have no doubt that your Association will play a prominent role in the Council since manufacturing industry is the major user of raw materials. It is my earnest desire that we should achieve some breakthrough in the shortest possible time as this is the surest way to achieving self-reliance in the supply of local raw materials for domestic industries.

Mr Chairman, distinguished ladies and gentlemen, as I indicated earlier, the organised private sector should be ready to take up more responsibilities in the management of the national economy. Although profit is usually the dominant motive for your actions, Government expects that companies should respond to the needs of the society within which they operate. In this connection, I wish to remind you that the nation has a core of educated unemployed people who need to be absorbed into employment. While we are now contemplating incentive schemes for encouraging employment in private industry, Government expects to see substantial improvement in the employment performance of your members in the course of this year. The unemployed are not only our fellow citizens, they are also our own sons and daughters whom we have educated at great cost to ourselves and to the national economy.

 I should not end this address without mentioning the important role played by import licencing in the rationing of available scarce foreign exchange resources. There is no doubt that this has become the most important single instrument for managing the economy in the short run. In my 1986 Budget Speech, I mentioned that representatives of the Private Sector would serve on the Committees to consider import Licence applications. I am pleased to note that the Import Licence exercise has now been completed and licences would soon be issued to successful applicants. Let me take this opportunity to thank the Private Sector representatives who laboured night and day along with their Public Service colleagues to examine the several thousands of applications for import licence. Encouraged by this year’s experiment, we are now reviewing the method of considering import licence applications in the future. As from 1987, foreign exchange allocations will be made to various industrial groups who will in turn meet to share these allocations among themselves on the basis of criteria to be established by each group.

This method has already been successfully tried within one or two industry groups. For this approach to succeed, it is essential that every applicant for import licence should belong to an industry or trade group. I hope the new method when fully articulated, will eliminate fake applications, ensure that the available foreign exchange is distributed among, industries in a fair and objective manner, and that the business community is fully involved in the management of a very scarce national resource.