Paper Revitalization in Nigeria Printing industry

NIGERIA’S paper manufacturing sub-sector is in crisis. Recent reports from the National Bureau of Statistics and the organised private sector tell a story of comatose domestic production and increasingly high expenditure on imports. Given its importance to job creation, forestry, and education and literacy, the Federal Government should take immediate measures to reactivate the industry to stimulate activities down its value chain and conserve foreign exchange.

The sub-sector is afflicted like most other sectors of the economy. The NBS said Nigeria imported paper and allied products worth N296.69 billion between July and December 2021. While paper valued at N188.13 billion was imported in the third quarter of 2021, import in Q4 of that year was estimated at N108.55 billion. ComTrade, a software and IT solutions company based in Belgrade, Serbia, estimated the total value of paper imports into Nigeria in 2020 at over $696 million.

A former chairperson of the Pulp, Paper and Packaging Group of the Manufacturers Association of Nigeria, Layo Bakare-Okeowo, laments the downward trajectory of the domestic paper milling industry in the past two decades. Unless the government intervenes, she warns, the industry may collapse altogether.

The fortunes of Nigeria’s domestic pulp and milling industry follow the country’s depressingly familiar cycle of a promising beginning, grand plans, growth, depression, setbacks and bust. The immediate post-independence government commendably recognised the importance of a local paper milling sub-sector and invested efforts and resources to crystallise this dream.

Paper, say experts, “is one of the core industries and is linked to the basic human needs. It is the pre-requisite for education and literacy and its use is an index of advancement in these two fields as well as the overall wellbeing of the society.” According to ScienceDirect, pulp and paper production is one of the largest industries in the world. Total global production rose from 371 million metric tonnes in 2009 to 390 million MT in 2014 and over 400 million MT by 2020.

To achieve domestic self-sufficiency and produce for exports, between 1960 and 1986, the government established three paper milling complexes—Nigeria Paper Mill in Jebba, in 1969, Iwopin Pulp and Paper Company, in 1975, and the Nigerian Newsprint Manufacturing Company, Oku-Iboku, in 1986. A boom followed. By 1985, Jebba was churning out 65,000 MT of Kraft paper, liner and chipboards, sack kraft, and corrugated cartons per annum. In a rarity in Nigeria’s manufacturing sector, Iwopin achieved 96 percent capacity utilisation, said the Bureau of Public Enterprises, producing over 35,000 MT of bleached short fibres and 60,000 metric tonnes of fine writing, printing papers annually.

Combined, the three firms enriched the space with over 200,000 MT of bond paper output. Indeed, it was adjudged as one of the country’s most effective industrial segments in the two decades to 1990.

But typically, the ‘curse’ of mismanagement, corruption, neglect, and gross incompetence hit the sector. Capacity utilisation dropped gradually until production almost halted altogether. The three mills became distressed, joining the carcasses of virtually all other state-owned enterprises in the country.

Rightly, the three were listed for privatisation, but as usual, competent, financially capable investors were bypassed in favour of less able ones. Consequently, since the privatisation of the integrated pulp and paper mills beginning in 2006, instead of a revival, the industry has suffered a significant setback, headlined by lack of investment and production hiccups.

With this, the economy-wide import dependency has hit the paper sector too. The three paper mills eventually shut down and have been comatose even in private hands. Currently, Nigeria’s paper products import demand is estimated to be over 3.0 million MT per annum.

The government needs to take measures to stimulate growth in this area to restore jobs in production, agriculture, transportation, the publishing and education sectors and boost exports, while conserving foreign exchange. The BPE should activate post-privatisation performance agreements. Many enterprises were given to unprepared firms. They should be encouraged to divest in favour of competent global players.

Liberalising policies, laws and regulations should be adopted to attract the best producers in the world as the country’s large population and the West and Central African markets present an alluring draw. The Universal Basic Education Commission estimates that under the National Book Policy, indigenous publishing companies were expected to print 100 million books for over 25.6 million students by 2016, a figure that has risen since then, while Nigeria’s resilient newspapers rely heavily on imported newsprint.

The federal and state governments should take extraordinary steps to protect forests from illegal loggers who are indiscriminately felling trees. South Africa accounts for over 65 per cent of pulp and paper production in Africa, followed by Egypt with 20 per cent. Nigeria accounted for a lowly 3.0 per cent by 2015, said Statista. Catching up should be a priority.

Basics include inadequate raw materials; lack of basic facilities and equipment for paper testing even in institutions of higher learning; poor government policies and lack of interest to revitalise the paper mills; lack of public and private support for research in pulp and paper, as well as low human capacity building in terms of curriculum development.

Despite the myriad challenges, experts still believe that the industry can come back alive with collaborative efforts from the private and public sectors. This is because the uses and applications of paper worldwide remain inexhaustible and will continue to rise despite increasing digitalisation.

The National Assembly set up a committee to review the privatisation and identify the sector’s challenges. The Minister of Industry, Trade and Investment, Niyi Adebayo, agrees that the industry needs urgent attention.

Nigeria needs to act fast. Ghana sealed a $2.8 billion deal in 2019 to establish local paper and pulp producing capacity of 1.5 million MT annually; this adds a new competitor in the sub-region. The NASS and the executive should pay attention.

Source – Punch Newspaper