The increasing cost of production occasioned by forex and Customs fees has limited the growth of the construction sector in 2022, CBK Integrated Industries, a ceramic manufacturing firm, has said.
The firm’s Head of Brand and Marketing Communication, Abimbola Onagbade, who disclosed this in an interview with Sunday PUNCH, said these policies had made it less appealing for investors to bankroll critical projects.
Onagbade also lamented the decline in growth of the importation of bottom-barrel products by deceptive importers who were only concerned about their pockets.
He said, “There are many variables that cause the undesirability of investors to venture into it (construction sector). Power is one serious issue; we don’t have enough power, and so, it is expensive to generate power. Government policies are not intentionally designed to make it easy for manufacturers to be competitive.
“There are many taxes, cost of importation of raw materials, cost of forex. All of these create an unfavourable environment for companies, and then of course our brothers go to China, import basically bottom-barrel products, sell them cheap, and flood the market with substandard goods.
Abimbola, who applauded the abundance of local materials, noted that there were no intentional policies by the government to mitigate power and forex challenges faced by industries.
He said, “We import some of our raw materials as we produce in the country. Some chemicals, tools, machinery and the bulk of the raw materials are here.
“While raw materials form 90 per cent of our production materials and elements of importation form 30 per cent of our products here, financially, the 30 per cent forms 95 per cent of our cost production as against five per cent of raw materials here.
“There are no intentional policies targeting manufacturers; it is more of what they are not doing than what they are doing intentionally. There are certain things required to enable the manufacturing sector to thrive.
“First are the exchange rate imbalances and discrepancies; second is in the area of power generation. We currently use gas 24/7, 365 days a year. We built the power infrastructure by ourselves, the process of bringing gas into our plant; all of these huge things make it difficult for businesses to thrive.”
SOURCE: PUNCH
