KevinBrown:


And why do we have to import when we have the capacity to produce it?

That's the point I'm trying to get out. It's because we have a high currency that make imports cheaper.
But if imports become too expensive we won't have any other choice than to look for local substitute.

You have to take the necessary step first. The way to a producing economy is simple when you have people who really want the system to work at the helms of affairs. What we have now can not take us to the realms of a producing economy.
POWER generation, transmission and distribution must first and foremost be in place.

this case is dead on arrival. op never gave thought to this before coming on line, case of too much apeteshi at night time.

wirinet:


I never said the raw materials i listed can't be produced in Nigeria, what i said was that the raw materials are not produced in Nigeria and so have to be imported.

What do you mean stereotypes? I am talking about what realilty is on ground and you are talking about stereotypes. I am sure you are either a student or someone who is not on ground to know realities on ground.

Let me tell you a strange experience i had this week. I am expanding my office and due to my tight budget, i decided to buy materials myself and just pay artisans like electricians for their labour. I have always bought made in Nigeria wires and cables because they are very good. I requested for made in Nigeria cables and i was given cables with Nigeria engraved on the wires. It was not until i got to my office that i noticed that instead of writing made in Nigeria on the wires, what was written was made for Nigeria. I was furious because i know the difference between in and for, so i took the cables back that i want cables that is made in Nigeria and not made for Nigeria. After trying to convince me unsuccessfully that the cables were made in Nigeria, he then opened up that the wires were actually made in China but for a nigerian company.

He said actual made in Nigeria wires would cost about N12,000 for a 1.5mm 3 core cable, while the made for Nigeria one costs N3,000.

So who would buy a cable for N12,000 when you can get one (even if it is inferior quality) for N3,000. So expect all cable manufacturing companies to close very soon.

Yes! This is what I'm saying. It means the true cost of the cable should be N12,000 not N3,000. It means the government has been subsidizing us all along due to an overvalued currency. And since our local industries can't compete with the foreign ones (in price), they had to close up.

But now, if foreign products are more expensive than the locally made ones, people will start patronizing the local ones. And due to economy of scale the price of the locally made product price will also reduce.

That's the secret behind all this chinese goods you are seeing. They are all enjoying economy of scale.

wirinet:


40% ke? what does Innoson actually manufacture? Do they manufacture the alloy sheets used for making the chassis? do they manufacter the engines, gear box, pistons and rings, headlights, etc,. Even the tyres, do they have tyre manufacturing plant inside their complex? even Mitchellin that used to have a tyre plant closed it down and resorted to importing from france instead.

I am sure that up to 80% of their materials are imported.

I was also holding back. I'll bet they even import the bolts they use. And not only that, their cars have the same designs as any other country. No uniqueness na.

wirinet:


40% ke? what does Innoson actually manufacture? Do they manufacture the alloy sheets used for making the chassis? do they manufacter the engines, gear box, pistons and rings, headlights, etc,. Even the tyres, do they have tyre manufacturing plant inside their complex? even Mitchellin that used to have a tyre plant closed it down and resorted to importing from france instead.

I am sure that up to 80% of their materials are imported.

Ignorance again!

Pls always make research before commenting

Some of the arguments here are so funny, how many students can babcock accommodate? Even your FG sends students on scholarship abroad, when government wanted to train ex-militants as pilots, why were they sent abroad? we have nothing as a buffer for the high price of dollars to naira. No responsible government will see an unplanned fall in their currency as a blessing because they have no control over it. you must have a degree of control over ur currency else you will lose on the long run.

Mods this should be frontpage

Cc:

Seun
Afam4eva
maclatunji
Ngwakwe
Ikenna351
OAM4J

KevinBrown:


Yes! This is what I'm saying. It means the true cost of the cable should be N12,000 not N3,000. It means the government has been subsidizing us all along due to an overvalued currency. And since our local industries can compete with the foreign ones (in price), they had to close up.

But now, if foreign products are more expensive than the locally made ones, people will start patronizing the local ones. And due to economy of scale the price of the locally made product price will also reduce.

That's the secret behind all this chinese goods you are seeing. They are all enjoying economy of scale.

Local finished products cannot be cheaper that Chinese product because of so many reasons, chiefly because;
Up to 90% of the raw materials are imported

Up to 80% of energy (petrol and diesel) used are imported.

High tarrifs and duties on imported raw materials

Lack of infrastructures, companies have to run and maintain generators, boreholes and sometimes build their own access roads.

High cost of borrowing money. Interest rates by banks hovers between 20 - 25%. Interest rate in china is between 4 - 5%.

Multiple taxation by Local state and federal governments.

So even if the naira is devalued to N1000 to $1, local finished goods can never be cheaper than imported goods.

KevinBrown:


Ignorance again!

Pls always make research before commenting

What is ignorance here. My first cousin that stays with me works with michellin and they have closed down their plant and resorted to importing directly from france. So please show us Innoson tyre manufacturing plant.

wirinet:


Local finished products cannot be cheaper that Chinese product because of so many reasons, chiefly because;
Up to 90% of the raw materials are imported

Up to 80% of energy (petrol and diesel) used are imported.

High tarrifs and duties on imported raw materials

Lack of infrastructures, companies have to run and maintain generators, boreholes and sometimes build their own access roads.

High cost of borrowing money. Interest rates by banks hovers between 20 - 25%. Interest rate in china is between 4 - 5%.

Multiple taxation by Local state and federal governments.

So even if the naira is devalued to N1000 to $1, local finished goods can never be cheaper than imported goods.

And I'm asking you again, all those imported Raw Materials, are you telling me they can't be sourced for locally?

Its even funny, u included oil in the list, when Nigeria is the biggest producer of crude oil in africa, why should we be importing oil derivatives? Why can't we build refineries and start refining oil?

The answer is very simple. Its because it's much cheaper (or so it would appear) to import it than for us to refine it ourselves.

But once it starts becoming very expensive to import oil, believe me, u will start seeing refineries all over Nigeria.

The same applies to other non-oil products.

wirinet:


What is ignorance here. My first cousin that stays with me works with michellin and they have closed down their plant and resorted to importing directly from france. So please show us Innoson tyre manufacturing plant.

So you don't know Innoson has a tyre manufacturing plant in Nnewi?

KevinBrown:


I don't understand

why did dunlop leave nigeria ?

KevinBrown:


I don't understand

KevinBrown:

And I'm asking you again, all those imported Raw Materials, are you telling me they can't be sourced for locally?
Its even funny, u included oil in the list, when Nigeria is the biggest producer of crude oil in africa, why should we be importing oil derivatives? Why can't we build refineries and start refining oil?
The answer is very simple. Its because it's much cheaper (or so it would appear) to import it than for us to refine it ourselves.
But once it starts becoming very expensive to import oil, believe me, u will start seeing refineries all over Nigeria.
The same applies to other non-oil products.

Your govt already subsidies the fuel ,,,,,,,,,,

atlwireles:


Sorry mister, Nigeria's Naira policy is made for the general society. Studying abroad cost money, families should plan accordingly.

I just gave you an hypothetical case study abd you are avoiding the question ...
Last I checked development is to tally with the society not the other way round ,,,,
Why are manufacturing companies sacking workers
Your logic is quite illogical

adaweezy:

I just gave you an hypothetical case study abd you are avoiding the question ...
Last I checked development is to tally with the society not the other way round ,,,,
Why are manufacturing companies sacking workers??
Your logic is quite illogical

Because they are over taxed and regulated.

KevinBrown:


And I'm asking you again, all those imported Raw Materials, are you telling me they can't be sourced for locally?

Its even funny, u included oil in the list, when Nigeria is the biggest producer of crude oil in africa, why should we be importing oil derivatives? Why can't we build refineries and start refining oil?

The answer is very simple. Its because it's much cheaper (or so it would appear) to import it than for us to refine it ourselves.

But once it starts becoming very expensive to import oil, believe me, u will start seeing refineries all over Nigeria.

The same applies to other non-oil products.

Nigeria spent 1 trillion on subsidy in 2012 .
How much can build a 500 BPD refinery
Stop defending absurdity jare and be honest

atlwireles:



Because they are over taxed and regulated.

according to the PPTA Nig collects 85% TAX from IOCs why has no IOC sacked workers ??

adaweezy:
according to the PPTA Nig collects 85% TAX from IOCs why has no IOC sacked workers ??

Please stick to the manufacturing sector. Remember this discussion is about the Naira.

atlwireles:



Because they are over taxed and regulated.

Most manufacturers enjoy tax reliefs due to govt policies to enable them perform well and maintain steady growth
Besides Nigerias tax laws especially CITA are very lenient on employers compared to the Tax rates in France and Germany .
Sorry your Tax theory is feeble

adaweezy:

Most manufacturers enjoy tax reliefs due to govt policies to enable them perform well and maintain steady growth
Besides Nigerias tax laws especially CITA are very lenient on employers compared to the Tax rates in France and Germany .
Sorry your Tax theory is feeble

Why not tell the collectors pondering down your doors monthly, threatening to break down your gate, that the manufacturers don't pay taxes.

atlwireles:



Please stick to the manufacturing sector. Remember this discussion is about the Naira.

The IOCs are part of the manufacturing sectors or what are they now marketing sectors ?...
You keep avoiding the issues at hand... Discussions should not be about wanting to reply, it should be more about wanting to educate and you succed in just replying by sticking to a narrow view
The naira is going down and nigeria is no china who produces ... This theories being postulated by you are similar to the SAP failure

atlwireles:


Why not tell the collectors pondering down your doors monthly, threatening to break down your gate, that the manufacturers don't pay taxes.

Did I say manufacturers don't pay taxes stop reading to reply , read to understand ........

adaweezy:

The IOCs are part of the manufacturing sectors or what are they now marketing sectors ?...
You keep avoiding the issues at hand... Discussions should not be about wanting to reply, it should be more about wanting to educate and you succed in just replying by sticking to a narrow view
The naira is going down and nigeria is no china who produces ... This theories being postulated by you are similar to the SAP failure

The OP started this thread with some basic points, I agreed with the OP. I'm not here to discuss Nigeria's economic policy. This was about the Naira as a stand alone item.


When I talk about manufacturing companies in Nigeria, I'm not talking of Shell, Exxon, Chevron, total etc.

adaweezy:

Did I say manufacturers don't pay taxes stop reading to reply , read to understand ........

Your previous comment should be withdrawn then.


time to retire from this thread.

adaweezy:

You keep avoiding the issues at hand... Discussions should not be about wanting to reply, it should be more about wanting to educate and you succed in just replying by sticking to a narrow view

More reason why i stop replying d guy.........

Some lies are quite wonderful.

KevinBrown:


This is exactly what we are fighting against. Other than hi-techs, there is virtually nothing we can't source for locally. Why wasting money on imports?

What are we looking for?

Is it clothes? Go to aba

Is it computer/internet equipments? Zinox produces such.

Is it cars? Innoson produces such

Is it Education? Covenant University is a standard university.

Etc...


I don't know why many of you are not seeing it, but this is good. If imported goods become too expensive, then there will be demand for local substitutes. It might be inferior to previously imported ones at first, but with time it will develop in quality. It will help to create more jobs.

And those that are clamoring for higher valued currency, believe me you are just subsidizing the extravagance lifestyle of the rich, at your own expense.

as far as manufacturing is concernes, you are highlighting your ignorance.

all the so called nigeria manufactured goods are somply knock down products. they are delivered to nigeria as components and assembled here.

innoson is a rebadged chinese car. this has been thrashed out on other threads in nl. NO COMPONENT in the car is nigerian made.

ditto for the zinox you are referncing. motherboard, ram, case, screen, nothing is made in nigeria. even the much touted naira key doesnt work. it does notveven ship,with a proper cd, just one fake 50gb partition where with a poor driver launcher.

all these components are bought with forex, so, there are no,savings whatsoever.

do you have any idea how prohibitive manufacturing costs are in nigeria because of energy? it is only food and beverage, and the lowest manufacturing ( foundries) that can cope.

all your so called made in nigeria are simply branded for nigeria, made in china. and paid for with dollars. and the costs of these items will go through the roof or the so called manufacturing will stop.

@OP,
With or without your analysis, falling Naira is a huge blessing for me,

Why

I have always have this ambition to earn money in foreign currencies.

I have started getting some dollars, my next target is Pound Sterling.
This is why exporters rule!

We humans have the capacity to turn every situation to an advantage.
Those that want to cry can continue.

Success is a choice!!!!

patmaine:


from Ur analysis. what's keeping the inflation.. How come the inflation is yet to be enormous

Delayed effect of lag variables in economics. It takes time for certain effects to manifest themselves.

Everybody sooner or later would start making price adjustments of goods and services, from landlords all the way to market women!

Don't worry, inflation would soon be upon you!

wirinet:


I never said the raw materials i listed can't be produced in Nigeria, what i said was that the raw materials are not produced in Nigeria and so have to be imported.

What do you mean stereotypes? I am talking about what realilty is on ground and you are talking about stereotypes. I am sure you are either a student or someone who is not on ground to know realities on ground.

Let me tell you a strange experience i had this week. I am expanding my office and due to my tight budget, i decided to buy materials myself and just pay artisans like electricians for their labour. I have always bought made in Nigeria wires and cables because they are very good. I requested for made in Nigeria cables and i was given cables with Nigeria engraved on the wires. It was not until i got to my office that i noticed that instead of writing made in Nigeria on the wires, what was written was made for Nigeria. I was furious because i know the difference between in and for, so i took the cables back that i want cables that is made in Nigeria and not made for Nigeria. After trying to convince me unsuccessfully that the cables were made in Nigeria, he then opened up that the wires were actually made in China but for a nigerian company. He said actual made in Nigeria wires would cost about N12,000 for a 1.5mm 3 core cable, while the made for Nigeria one costs N3,000.

So who would buy a cable for N12,000 when you can get one (even if it is inferior quality) for N3,000. So expect all cable manufacturing companies to close very soon.

please try to engage nigerchin , nocacao, kabelmetal or ---------directly. you cannot vouch for those so called ' made for nigeria' cables. the importers have cut so many corners to bring it down to 3k. they may even have done the covering in alaba. i am saying this because these bastards can get your office burnt for their small profit

my guy if others see that you planned ur currency's depreciation, they will act against you. see as china de keep her currency low and devalued yet the us a ad japan are askig them to revalue it. talkless of if china comes out says they want devaluation as an economic policy....thats why chinese products are this cheap. if they should revalue it to 1 renminbi to 1 dollar them go fall well well....so any coutry that wants to use devaluation as a policy can ot come out and announce it; they do it behid the scee mate

Babalegba:
you are trying to rationalize failure and economic incompetence. Planned depreciation would help an economy in a cohesive strategy as it could be used as an instrument but the Nigerian one is unplanned and will bring enormous inflation.

a very good and cogent observation. however, how shall our local industries succeed when we import everything, even tooth pick? there is a ceramic tile factory i Abia state; we have rice millers in ebonyi state and kogi; we dont import vegetables or fresh fruits, ulike egland, switzerland etc; Dagote is hintig at oil refinery in lagos ad before you know it other business me will come in. see how dagote cement de eter cameroon market anyhow...as their factory here is still to start production, yet i de buy dangote cement for douala. aija don de export cement, bros

giantstrides:
OP, the question you should ask yourself is that ' is our production capacity as high as the chinese' do we have local products which can serve as substitutes? We don't produce electronics, ceramic tiles, phones, our food production can't meet our demand, even our crude is imported bck in it's refined form because we hv no functioning refineries. so how is the exchange rate a blessing since we hv to pay expensive dollars for all this trades.