Business Hilights
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Danger as manufacturing firms may retrench, close factories over closed border

Today, October 21, 2019, will make it two months after the Federal Government through the Nigerian Customs Service (NCS), announced closure of Nigerian land borders over what it originally claimed as joint exercise with the Nigerian Immigration Service (NIS).

However, government changed the narrative late last month, saying the essence of the closure was to tame smuggling in both rice and petroleum products without recourse to the impacts on company products that are exported by land to neighbouring West African economies.

Recent checks along the popular Seme border post near Badagry weekend revealed that over 5,000 trailers loaded with goods had been languishing and littering along the Seme border highways on both sides of the closed border.

Closer checks by Business Hilights undercover reporters revealed that some of the loaded trucks have started releasing rotten smells indicating that perishables have gone bad.

Already, experts have started developing fears of another self-induced recession on grounds of dumping of goods meant West African markets due to inability of manufactured goods to cross the borders.

A recent viral picture taken from the Jigawa side of Nigeria/Niger border showed abandoned heavily loaded trucks carrying Vitafoam matresses manufactured in Nigeria for export to neighbouring economies.

It would be recalled that Vitafoam, one of the longest surviving foam manufacturing companies in Nigeria.

Latest checks revealed that currently, Vitafoam has several hundred employees, distributors and others including the truck driver that depended on transporting Vitafoam products for their livelihood.

Company facts also showed that in 2018, the company sold N17 billion worth of products, paid over N1 billion as salaries and benefits.

Besides, Vitafoam also borrowed N5b from banks and paid back N1.2 billion to Nigerian banks that financed their operation.

Within the period under review, Vitafoam also paid N220m tax to FGN and about N260m as dividend to shareholders

Analysts say not only Vitafoam is in this government inflicted scenario as checks at different land border posts show that many other manufacturing companies including Dangote Industries, Flour Mill of Nigeria, Cadbury Nigeria Plc, PZ Cussons, Nestle and other budding Small and Medium Enterprises (SMEs) that have markets along the West coast are in the same troubled net of closed border.