Our Economy: Assuming We Didn’t Have Oil

by L.Chinedu Arizona-Ogwu

In an open market, the transfer of technologies between nations can enhance social and economic benefits enjoyed by the recipient society. Rather than merely selling the products of a particular technology around the world, technology transfer properly organized allows new jobs to be created, new skills to be developed and new potential for innovation in the recipient society.

Maybe you would think twice. Not only are Nigerian goods not known for their quality, but the country’s manufacturing sector has been so run-down over the years that the export of processed products has all but collapsed. It is partly as a result of poor economic management over the years, and partly because those goods that are produced are often labeled as having been made elsewhere. Before now, the law courts have been perceived as the only support for the protection of IP and brand issues in Nigeria. Unfortunately, they have become quite arduous, slow, long and unpredictable at times. Some Nigerians have over the last few years in our practice as IP lawyers found that regulatory authorities are just as important as the law courts in the battle to protect IP rights and brands. A proper balance of the two, we believe, will adequately protect any brand in Nigeria. Whereas, Nigeria has been looked upon as a jungle were no legal protection can be found or sustained, we have discovered that there is in fact a high level of security and protection available. Not just in terms of the written laws but also in active enforcement of those laws.

There are various laws that exist in Nigeria to protect Intellectual property and brands, they include, The Nigerian Copyright Act, Standard Organization of Nigeria Act, NAFDAC, Trade Marks Act, Merchandising Marks Act, Customs and excise Act etc. On the back of these are various regulatory and enforcement agencies set up to enforce these laws and a host of others. These include The Nigeria Police, Copyright commission, Standard organization, Ports Authority, NAHCO, the Customs etcetera are various ways in which IP and Brand rights are infringed, thereby requiring the intervention of any and or all of the above-mentioned agencies. In Nigeria, these infringements are more often than not cross border in nature. Of course the infringement of a right presupposes that there exists a right in the first place.

The general rule is that only an IP right owner may perform certain acts relating to the IP to the exclusion of all others. If any of those acts are performed without the IP right owner’s authorization/permission there will be an infringement of IP rights. Historically, the reason behind this is simply that, the produce of a man’s mind and intellect are just as important as the shirt on his back, and consequently need to be protected.

But in a country where the manufacturing sector has all but collapsed under the weight of bad roads, intermittent power supply and limited pipe-borne water provision, the town is struggling against the odds. Small and medium sized industries have set up here, and are producing not only for our market, but also – albeit still to a limited extent – for markets abroad. We are proud of what we are making. It may not yet compete with equipment from UK and Germany. But because we have a name to protect, we are striving all the time to improve our quality.

Recent steps to boost local content: awarding of contracts worth millions of Naira to Nigerian oil service companies; farming out oil fields to Nigerian-owned companies; providing technology transfer and training to Nigerians; heightening awareness and creating opportunities for Nigerian companies through LCD fairs. Although the manufacturing sector (including micro-, small, and medium-size enterprises) has the potential to create wealth and employment, the sector has stagnated in Nigeria, and its contributions to GDP and employment remain small. The activity mix in the sector is also limited, dominated by import-dependent processes and factors. As part of its efforts, the company categorizes potential contractors into five groups, ranging from Category “A” – Nigerian-registered companies with 100 percent local shareholding – down to those with no in-country shareholders or registration.

The label doesn’t say ‘Made it Japan’ it just says a company name and then ‘Japan’. It is all part of the survival strategy, because when you are operating in a system that you have everything stacked against you, there are a few things that you have to do to survive. The irony is that no international manufacturer or designer is likely to prosecute for copyright infringement. Very few of these products make it outside Nigeria‘ s borders, and the volume of production is probably too small to bother with. But ultimately, many of the manufacturers here do want to compete on equal terms, with goods that proudly say “Made in Nigeria”. I think we went to sleep. We relied too much on oil and it made everybody lazy, especially the leaders. I think the country was better in 1960 than it is today. Nigeria is still to wake up. Every designer name is available.

Nigeria has probably taken care of the greatest political hurdle facing it since independence by putting in place a democratically elected government. However, the time is now ripe to shift emphasis onto something equally important. To bring lasting peace, economic freedom and prosperity to its people and help tackle the long-term problems posed by ethnic rivalry and tribal clashes, Nigeria needs a change of direction. The forces of change outside Nigeria are driving the need for change within it. Therefore, to maintain itself on a par with the rest of the world, and to be able to compete successfully in the fast moving world economy, Nigeria has to radically reform itself.

The oil and gas sector is fundamental to the Nigerian economy, providing the bulk (about 90%) of total revenue as well as the foreign exchange earnings for the country. I think we are in deeper slumber now. In another 10 years, we will be more than 20 years behind. It is a real problem for Nigerian entrepreneurs. Fighting against a decaying infrastructure and all the extra costs that it entails and yet determined to produce and sell their goods in competition with products from abroad. Their survival strategy of labeling goods as if they were made abroad is just part of their solution. It is not only a breach of copyright regulations, but it also means that Nigerian-made brands – however good the quality – will never gain that reputation for themselves.

However, despite the huge investments made by the Federal Government of Nigeria in this sector, an average of $10 billion per annum, its contribution to the Gross Domestic Product (GDP) has been very minimal. This can be attributed to the low Nigeria content in the industry. The Local Content is therefore an initiative of the Federal Government to help develop the local capacity building and to enable Nigerians participate actively in this vital sector.

With private sector-led economic reform the only plausible option for the emerging Nigerian renaissance, all eyes are on the country’s oil reserves as a means of re-emerging as an international economic player. The country is the tenth largest oil producer in the world, and the most prolific producer in sub-Saharan Africa. Current production averages 90 million tons of crude – about two million barrels per day – most of which is sold on the international market.

Oil revenues account for roughly 95 percent of hard currency earnings and more than 80 percent of government revenue, making the upstream sector of the oil industry the most important component of the Nigerian economy. To increase its share of the world’s energy market, Nigeria is seeking not only to expand production capacity but also hydrocarbon reserves. If a country’s infrastructure is the “wheel” of economic activity, then Nigeria appears to be in trouble. The World Bank, which has established a strong correlation between infrastructure and per-capita GDP, says only about 40 percent of people have access to electricity – and even then outages are a regular feature. More than 90 percent of firms in Nigeria, according to the World Bank, have installed their own generating capacity, as the moribund state-owned electricity company cannot be relied upon to deliver regular power supply. In the event of a commercial find, the contractor recouped its cost in line with the procedures stipulated in the contract.

Despite the various National Development Plans put in place in Nigeria to enhance industrialization, the country still remains a mono-resource (crude oil) based economy. Growth in manufacturing is also in a downward trend, and industrial capacity utilization is below 37%. The poor performance of the manufacturing sector has been attributed to a number of factors which include, amongst others: high cost of production due to high exchange rate; weak demand for manufactures due to declining purchasing power of the populace; high expenditure on spare parts, repairs/maintenance; legal and illegal influx of cheap imported goods (globalization of trade); and political instability, especially during the military regimes.

For the country to improve its manufacturing sector, evolve a manufacturing-based economy and be relevant in the globalization of production and trade, it should pursue a combination of these S&T approaches and moves: generation and application of S&T knowledge relevant to manufacturing through in-country R&D, S&T and innovation efforts; technological licensing and transfer; encouragement of foreign direct investments; adoption of continuous improvements and innovation programs; and technological knowledge initiation. This is only possible in a national innovation system with the following enabling environments: a well-funded education system; good and well-maintained physical infrastructures; favourable environment for R&D and innovations; and stable and favourable economic, legal and political conditions.

For our leadership to Create a competitive business environment that fosters investment and economic growth the Government should define the rules and parameters that guide and influence the development of business, create a conducive environment by using such parameters as legislative and regulatory framework, Taxation; trade agreement, negotiations and ratification, other responsibilities within their purview to provide public facilities and infrastructures to break down tariff and non-tariff barriers.

The call for technology transfer or technological growth, capacity building and

Development of non-oil sectors of our economy is a call for help to harness technical capabilities to increase local development, production and maintenance of instruments/ equipment at reduced cost. The situation can be linked to the man inside a deep pit, desiring to come out. He has to raise alarm for attention. He has to make effort, jump up or raise his hands to grab the lifeline lowered for him. These efforts have been made by existing industrialized nations.

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