Bill To Ensure Mandatory Patronage Of Locally Produced Goods Scales 2nd Reading In House Of Representative

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BILL TO ENSURE MANDATORY PATRONAGE OF LOCALLY PRODUCED GOODS SCALES 2ND READING IN HOUSE OF REP

A Bill for an Act for mandatory procurement (First Option) of locally made products, goods and services by government ministries, departments and agencies in order to encourage local manufacturers and indigenous companies on Thursday passed Second Reading in the House of Representatives.

The bill (HBs. 85, 1007 and 1330) is sponsored by Hon. Obi Aguocha,
Hon. Nnamdi Ezechi and Hon. Jesse Okey – Joe Onuakalusi.

Leading the debate on the bill, Hon. Obi Aguocha, representing Ikwuano/Umuahia North/Umuahia South Federal Constituency, Abia State said the bill which aims to mandate the procurement of locally made products, goods, and services by the MDAs is a legislation essential not only for bolstering the local manufacturers and indigenous companies but also for prohibiting the exclusion of locally produced goods in the procurement process.

He said the bill has been overdue as It was initially read and passed for its first reading on July 12, 2023, yet economic situation has only worsened.

He noted the persistent inflation, depreciation of currency, and
volatility of foreign exchange rates have had dire consequences on the
economy, adding that experts attribute these challenges to low output, productivity, and lack of patronage of locally made goods, which has diminished our economic resilience.

Hon. Aguocha, said many Nigerians exhibit a preference for foreign-made products, a trend that exacerbates inflation and weakens the Naira.

“While consumer choice is important, it is the responsibility of this government to prioritize legislation that supports local industries. This bill will ensure that every procurement exercise conducted by MDAs prioritizes locally manufactured
products and services, promoting a shift in our economic dynamics.

“Key Provisions:
Exceptions for foreign goods will only be made when locally produced items
are unavailable, lack competitive pricing, or fail to meet regulatory
standards.

“Mr. Speaker, the expert statistics are clear and points to emphasize the
preference for foreign-made goods in Nigeria. It may sound more technical
to add some of it.

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“Import Dependency: Nigeria’s import bill has Consistently been high, with
the National Bureau of Statistics reporting that in 2021, Nigeria imported
qoods worth over $45 bilion. This highlights a significant reliance on foreign products.

“Consumer Preferences: A survey by KPMG in 2020 indicated that 73% of
Nigerian consumers preferred foreign products, citing quality, durability, and
nd reputation as key reasons.
brand

“Market Share: The Nigerian Retail Market report from Euromonitor
International showed that foreign brands dominate several sectors, Such as
electronics, cosmetics, and beverages, often capturing over 60% of the
market share in these categories.

“Foreign Direct Investment (FDI): According to the World Bank, Nigeria
attracted about $3.9 billion in FDI in 2022, with a significant portion directed
towards sectors dominated by foreign goods, suggesting a lack of confidence
in local alternatives.

“Quality Perception: Research by the Nigerian Institute of Policy and
Strategic Studies found that about 68% of respondents believed that foreign
products were of higher quality than locally produced items.

“Economic Impact: The heavy preference for imports has been linked to
the slow growth of local industries, contributing to Nigeria’s low
manufacturing output, which was only about 9% of GDP in 2022.

“These statistics underscore the urgent need for the Local Industries (First
Option) Patronage Bill to change this trend and promote local production.

EXPECTED IMPACT;

“Boost to GDP: Estimates suggest that this bill could increase Nigeria’s GDP
by up to 50%. Exchange Rate Stabilization: We anticipate a stabilization of the volatile
exchange rate by approximately 60%.
Reduction in Unemployment: This initiative has the potential to decrease
unemployment rates by 40%.’” he said.

According to him, this bill aligns perfectly with the legislative agenda of 10th Assembly, which emphasizes the promotion of locally made products.

He stated that over the years, the local industries have suffered from inadequate patronage, leading to low exchange rates and increased unemployment.


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By Abia ThinkTank

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