Olaleye: Government Must Do More to Curb Smuggling

 The food, beverage and tobacco sector has played a major role of providing food, jobs and wealth in Nigeria. However, the National President, Food, Beverage and Tobacco Senior Staff Association, Quadri Olaleye, spoke on the challenges bedevilling the sub-sector and the need for government’s intervention.  Goddy Egene provides the excerpt:

What is the state of the food and beverages sub-sector in the country?

One cannot say the government policies concerning the food and beverage sector have really benefitted the industrial sector because there is continuous job loss as a result of reforms in forms of mergers, acquisitions, privatisation, trade liberalisation and commercialisation. The resultant effect is loss of membership. The workers in Export Process Zone (EPZ) are still not unionised as some managements are hiding under the guise of government policy on EPZ. The food, beverage and tobacco industry in Nigeria covers the brewery, dairy, tobacco, flour milling, bottling, confectioneries, spirit and liquor sectors. It is a unique industry which over time has been fairly stable in comparison to other sectors with good conditions of service and job security. It can even be argued that next to the oil and gas industry, it is the second industry that has enjoyed boom in terms of contributions to the economic growth and development of Nigeria. Some of the socio-economic challenges facing the country include insecurity, poverty, unemployment. One cannot undermine the role the food, beverage and tobacco sector have played in providing food, jobs and wealth through leveraging on success in the agriculture sector.

Are the raw materials needed for production in the sector locally available?

In the food and beverage sector, most of our industries can only source for 40 per cent of their raw materials locally, the remaining 60 per cent is through importation. Due to the high exchange rate, employers in the sector have no choice than to downsize even though they take more advantage of the situation. But the fact is that there are no raw materials, the purchasing capacity of the consumers too has been drastically reduced, so production has to be minimised and they have to reduce the number of workers.   We have cassava in the country, the question is that is it up to the standard required in terms of quality? Take for instance, in the production of ethanol, now what must we do? This is where government should come in. The ministry of agriculture and NAFDAC and Standard Organisation of Nigeria (SON) to make sure they educate the farmers on how to produce quality cassava that can be used for Ethanol.

The year is coming to an end. How would you access your sector’s performance so far?

Though we have itemised the various challenges confronting the association, despite all that, the industry is still standing tall because of its uniqueness. The Food, Beverage and Tobacco Senior Staff Association(FOBTOB) at the national level was able to put in place a Procedural Agreement with the Association of Food, Beverage and Tobacco Employers (AFBTE). Despite incessant redundancy in the industry, we are still able to increase our membership through aggressive organizing.  Also, the Pension Act was not explicit about the provision for gratuity alongside pensions and idea of abolishing gratuity became a topical issue. However, FOBTOB was able to obtain an upward review, even though it was a slight modification to the calculations.

Specifically, what are the challenges confronting the sector?

The food, beverage and tobacco industry is confronted with the projected plan by the federal and state governments to impose tax on pensions, gratuities and terminal benefits of workers in the country while employers in the industry are also planning to abolish gratuity. Nigeria’s technological changes in production processes are wide-ranging from robotics to computerisation, automation in packaging and quality management and companies are embracing this by the day. As workplace technology accelerates, discussions on the use of such technology will likely become key in any bargaining where robots and automation are a possibility.  Economic recession in Nigeria has led to the dramatic changes in collective bargaining in food, beverage and tobacco industry both at national and branch levels. Negotiations have changed from wearing a co-operative outlook to an adversarial posture. Under the Nigerian legal system, the right of citizens to be members and join in the formation of trade unions is well guaranteed. Section 40 of the Constitution of the Federal Republic of Nigeria do not forbid anyone from joining the trade unions in Nigeria but some managements in the food, beverage and tobacco industry that are still hiding under the guise of the principle of voluntarism to use a subterranean way to prevent some categories of workers from associating freely with the union. In times of economic depression such as is being currently experienced in Nigeria employers of labour, which include the food, beverage and tobacco sector, see redundancy as a cost-cutting measure that will enable them remain in business.  Casualisation and outsourcing have taken over jobs in food, beverage and tobacco sector and efforts to unionise these categories of worker have not yielded result. Even when there is willingness on the part of these category of workers to belong to the union there are still underground moves by the management to ensure that they are not unionised.

Smuggling of goods has remained menace in the country. How is smuggling affecting the sector?

Smuggling is having adverse effects on the industry as the country is flooded with substandard products every day. Only the government can help us to resolve this. The rate of smuggling activities has been so high and government has been making effort to eradicate this problem, but yet to record much progress.  Government and manufacturers are losing a lot on the collection of revenue and also the foreign exchange of this nation is being sapped through these activities.

This is robbing the nation of huge amount of revenue that should be derived from import duty and has also resulted in flooding the market with sub- standard, fake and expired products.  Smuggling is generating a lot of concern because of both the economic and health implications; it depletes the economy of nations, constitute serious health hazards through substandard goods and in some instances death and may eventually lead to the collapse of the manufacturing sector. I think the federal government needs to do more to curb the menace of smuggling in Nigeria.

How is the port congestion affecting the performance of your sector?

Port congestion, which can be summed up into two words – logistical nightmare- is affecting partially all the industries in Nigeria, food sector inclusive and the impact is enormous. The only sector benefiting from this is freight and forwarding. Production could only be achieved when the raw materials are available and there are good means to transport finished product to consumer. The producers and distributors are losing money while consumers are suffering because the products are not available. This should be taken up by labour.

Four years after privatisation, has the power sector delivered on its promises to Nigerian industrial sector?

The intent of privatisation in Nigeria was meant to alleviate the suffering of Nigerians but as at present one cannot say it has great impact on our industry because some of the companies due to epileptic power supply and the need to keep the production process going had to resort to alternative power supply. 

Nigerian roads are still in a very bad shape. How is the situation affecting your operations?

The roads are still in a very bad shape and it is affecting both movement of raw materials and finished products.

How would you rate consumer’s purchasing power in the face of Nigeria’s economic challenges?

The purchasing power is dropping by the day because of religious believe on alcoholism, inability to avoid some the products due to poverty rate in Nigeria. Also, consumer preference for non-processed food products in place of processed food products.  Government should exploit a partnership with the multi-nationals who are acquiring new technology that are automated in most of the areas of their production, this to a larger extent has contributed to mass sack from these organization. If you get to India, most of their machines are operated by people not robots, this is a deliberate policy to engage their huge population. So, that is why I say that the government has a role to play in this direction. Most of these technologies are very expensive, yet government pretended as if they do not know what is going on in the production sector.

What do you think government should do to establish a viable food and beverage sector?

There should be regulation of the process in the export processing zones and decongestion of ports. Although, technological changes continue to be regarded as managerial prerogative as there is no law in place to stop this. In order to preserve jobs, we are looking at the following:  advance notice of technological changes; discussions between representatives of labour and management regarding time, procedures and re-integration of adversely affected workers; commitment by employers that necessary reductions in employment will be achieved through systematic approach, at some agreed upon annual rate; separation allowances for workers who elect to retire.

There is need for the federal government to re-orientate the youths towards little business that they can start, and that could turn to a conglomerate in the future if they are persistent, hardworking and absolutely committed and believe in themselves that they can do it.

The era of white collar job in the country has gone and the sooner the government roll out self-employment scheme that can mop away the teeming graduates off the streets, the better it will be for us in the long run.  Nigerian youths need re-orientation and new thinking that can turn little business to bigger one.  Take for instance, car washing business, a lot are into it, but if you engage them in discussions, they are doing it pending the time the other job will come. This is applicable to shoe making and likewise farm settlement which were eyesore in those days. If government is serious about employment generation, this area can be focused and enlarged to create new opportunities.

In the early eighties, government encouraged graduates to go into farm settlement by giving them soft loans. Within little time, they are self-employed and still engaged few hands on their farm by generating employment. But today, nobody is doing that.  There used to be agricultural show where the young farmers will come and exhibit their farm produce and the best are given awards.