economy

I Buy Nigerian: Simple Thoughts on Local Manufacturing and the Nigerian Economy

I love NASCO cornflakes. Eating NASCO for breakfast reminds me of my childhood. I buy NASCO whenever it is available. I don’t mind stares from people who seem to pity my inability to afford pricier brands*.

I was happy to see yesterday that NASCO has overhauled their packaging. I always thought the old packaging sucked, and that it looked out of place beside attractively designed brands like Kelloggs.

The cashier asked if I chose NASCO because it is made in Nigeria. I was surprised. I buy NASCO because I love it, because it brings fond memories. I couldn’t care less where it is made.

His question got me thinking about the concept of ‘buying Nigerian’, so I decided to address some themes that have recently gained traction.

  1. We have wrecked Nigeria’s economy by our overwhelming preference for foreign products.

This implies we could fix our economy simply by choosing local products over foreign alternatives. Proponents also sometimes argue we should ‘buy Nigerian’ just because it is Nigerian.

Let me be simplistic.

Buying decisions are mostly driven by perceived value for money, excluding status driven purchases and money laundering. The quality of terrestrial TV content is poor and you can afford cable, so you pay for cable. Hair extension A retains its gloss longer than B, so you buy A. Jackets from tailor X lose shape faster than those from Y, so you patronize Y.

It is mostly that simple. In free markets, consumers vote for value with their wallets.

Do Nigerians prefer foreign products because they offer better value than local alternatives? I think so. Would Nigerians choose expensive foreign products if local alternatives offered similar value at competitive prices? I think not.

We must correctly define the problem. Is it one of value, or of the stated country of origin? We would solve the latter by embracing protectionist trade policies, alienating our country and regressing even further. We would solve the former by making it easier to create value – requiring aggressive strides in infrastructure, institutions, human capital, and access to funding for small businesses.

Which would you rather we do?

  1. Manufacturers should localize production in Nigeria, or be barred from selling their products here.

When people say this, I desperately want to ask one of the following questions, but end up singing ‘kumbaya’.

Do you know how costly it is, in time and money, to clear raw materials or machinery from the port?

Do you know how inefficient it is to transport finished products across Nigeria?

Do you know how stressful it is to find employable talent in Nigeria?

Do you know what it costs to run factories on diesel twenty four hours a day?

Do you know how all these come together to impact the cost of production?

You get the idea.

It is difficult to do business in Nigeria.

Businesses are neither governments nor charities. They exist to make profit. In prudent hands, capital will go where it is most likely to make a profit. With the exception of a few areas, mostly services, Nigeria is not that destination today.

We cannot wish industrialization into being, or legislate it into existence. National pride is not enough. It is a long, choiceful road to industrialization – and we have not even started yet. Nigerians have valid needs for tires, phones, even toothpicks – and will continue to import them as long as it is uneconomical to produce them locally.

There is a reason Apple produces iPhones in China despite being an American company. There is a reason Samsung produces phones in Vietnam despite being South Korean. There is a reason most call centers and IT support centers are located in India. While other countries built competitive advantage, we bickered about oil proceeds.

We must correctly define the problem.

It is difficult to do business and create value in Nigeria.

We will remain a net importer of value as long as this is the case.

Cheers.

Koye.

PS: I intentionally approached this in a simplistic way to reach the broadest audience possible. If you want to disagree nicely or want me to explain my thoughts a bit more, comment away! 🙂 If you like, please share.

* The stares are mostly in my mind 🙂

Read more of my thoughts on my website.

Image via 635.gtbank.com

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Comments
  • Gb

    Well done, Koye!

    January 27, 2016
  • Thanks Koye… 🙂

    January 27, 2016
  • Nigeria being a consumer nation with her large population is really affecting our economy negatively. We need to start manufacturing Made in nigeria products in areas of high consumption e.g automobiles,electronics,gadgets and petrol. This would boost our economy significantly. Not just NASCO cornflakes.

    On the lighter mood let’s catch some fun.
    Read this hilarious story
    THE CHRONICLES OF JEDI-OLOYIN

    Trust me you gonna laugh your gags

    January 27, 2016
  • JADE

    I like your approach to this topic and i love nasco too!!!

    January 27, 2016
  • Mike

    The Apple example is really comparing oranges to lemons. I’m sure you can see why this is so I wouldn’t go into that.

    When Nigerians overwhelmingly buy foreign produce.. We hurt ourselves more than anything. Capital leaves the country. Our currency loses more of its value. We need our local markets to thrive so tjat

    January 27, 2016
    • Hi Mike,
      I totally agree with you that we hurt our economy when we overwhelmingly buy foreign produce. We need to fix that – so people can buy more locally made goods (and services).

      What I’m trying to communicate is that we need to enable small (and big) businesses to produce these goods (and services) locally in an economic fashion.

      January 27, 2016
      • MADU

        Government policies favour local & foreign companies doing business in Nigeria. On paper sha.

        In reality, it’s the government and its ministries that discourage local manufacturers & local production by foreign companies.

        Let all the ministries (especially power, transport and works) put the economy into shape and every other thing will follow.

        It’s that simple. ?

        But ‘bribe & corruption’ will not let man breathe.

        This is where we find ourselves today.

        February 1, 2016
    • economical* fashion.

      January 27, 2016
  • Mike

    So that there can be economic stability. The issue is not to buy only Nigerian but to understand that buying Nigerian aids the economy.

    Noone should feel guilty for not buying Nigerian. That’s a perogative in a free economy to do what you want with your hard warned money. However people who buy Nigerian are contributing a lot more to the economy. Nasco factories can keep on employing staff not some factory in China or South Africa. Capital stays in Nigeria instead of being repatriated to Dubai. Less pressie on the naira too

    The more important conversation is how to boost local production so that quality improves and more people choose local products.

    January 27, 2016
    • Spot on!

      January 27, 2016
  • PAAL

    Nigerians purchase certain foreign products because by default they feel locally produced goods are inferior. I know folks that would buy kellogs forever without tasting Nasco. Has anyone test driven an Innoson car yet? I need an honest review.

    January 27, 2016
    • “Nigerians purchase certain foreign products because by default they feel locally produced goods are inferior.”

      I work for a consumer goods company, and this worries me silly. We produce certain brands locally that are extremely high value, but a few consumers still prefer to buy imported variants of the same brand. (Admittedly, our local brands once had quality concerns). I have a few theories about why this is the case, but I don’t worry too much about it as these people are in the minority.

      It definitely doesn’t fit my model for most purchases being value driven, but I classify these as ‘status driven purchases’. A colleague still told me this morning that NASCO is crap – but later admitted she had never tried it. I’ll be getting her a sample pack, I hope she tries it.

      Separately – I look forward to hearing from someone who has test-driven an Innoson car too. 🙂

      January 27, 2016
  • Mike and Kikki

    One man’s consumption is another man’s income. So Nigeria being a big consumer is a good thing. That our consumption is providing jobs elsewhere is unfortunate but that’s the way the world works today. Can we trap some more of the Nigeria’s consumption locally? Absolutely. But not by force or coercion. That’s the route of lazy unimaginative leaders. If Nigerian products are valuable they will get market share, that’s how relatively unknown Huawei ended up behind Apple and Samsung last year. It’s to choose a good path and improve. Prove your value.

    But Nigeria is not the only place we should tap consumption from, there’s Africa, there’s the rest of the world, but to do that we have to be able to compete. That comes from a long painstaking process. Not import bans and FX muddling.

    Summary. There’s work to do. No shortcuts here.

    January 27, 2016
    • Totally agree with you.

      Once we get our game right internally, Africa and the rest of the world is ours for the taking. There’s no reason why we can’t export high quality products or services – we’re great and hard-working people!

      January 29, 2016
  • Bunmi Oduntan

    I quite agree with Bharyour. It’s to choose a good path and improve. Find the (sharp) competitive edge and slay. Bearing in mind that the yardstick for quality is that of an international standard. Fashion is one industry in Nigeria that has taken full cognizance of this and is riding high on the tide. Good finishing, attractive packaging, durability, texture, attention to detail etc. are amongst the things consumers look out for in products. I’m a patriotic Nigerian but I won’t spend my money on a product I perceive to be sub-standard.

    I believe that individually, manufacturers/producers have a huge role to play in boosting the level of local product quality. It’s true that manufacturing conditions are tedious in this part of the world, but if you are going to do it then do it well. It’s hard yes, but then again no short cuts permissible.

    Well written Koye! 😉

    January 28, 2016
    • Thanks Bunmi.

      Totally agree our Fashion game is riding high… Next phase is to return to producing our textiles locally as soon as we can. 🙁 🙁 🙁

      January 29, 2016
  • It’s a good feeling knowing that I’m not the only young Nasco consumer. I get mocked for it.
    We can change our economy by our habits and I’m glad oil is where it is. It sometimes takes rock bottom to discover potential and turn them to success catalysts. Thanks Koye.

    January 28, 2016
    • Hahahah
      We should start an association. “Young Lovers of Nasco” 🙂 🙂 🙂
      Just kidding.
      Many Nigeria lovers I know are somewhat sad at the unfortunate turn of events with the oil price, but happy that it will force us to up our game.

      Now let’s hope this government is up to the task!

      January 29, 2016
  • Jules

    Nothing good comes easy. The economies we lust after were built upon the backs of patriotic citizens who suffered for decades. As a collective lot, we Nigerians need lessons in the art of delayed gratification.
    The ability to work for 10 years without seeing change is missing from our genetic makeup.
    Consider if the inventors of the telephone and television gave up early. It’s a mental block which we must demolish startin from our children.
    p.s I have tasted Nasco and in my opinion feels like plastic on my tongue?

    January 28, 2016
    • Hahahahaha @ Nasco tasting like plastic
      I’ve heard that said, but haven’t experienced it yet.
      Did you try the Strawberry / Vanilla flavors? I didn’t know till a few months ago that Nasco had flavored variants. Yummy! 😉 😉

      January 29, 2016
  • Princess

    I love Nasco too. It’s perfect for hot cornflakes. Well-written.

    January 29, 2016
  • Tunrayo A

    I once wrote a post about buying Nigerian products, particularly fashion items on my blog and the fashion industry is a sector I hugely support because of its potential to create jobs and income.

    You mentioned the lack of employable talent for businesses. I feel it should be easier for businesses to partner with educational institutions so that people can develop their employability skills. There are many unemployed people but companies are looking for talent so there has to be a way to solve this problem

    http://www.tunrayosthoughts.com

    January 29, 2016
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