On the 1st of February 2018, it
became a law for all non-food goods that are retailed in Nigeria to have a
Product Authentication Mark (PAM) sticker to show that they are authentic. The
sticker can be obtained from the Standards Organization of Nigeria (SON), at
the rate of three naira (N3) per sticker. The DG of SON claims this will be a
blessing to manufacturers, and then goes on to elaborate the reasons why (http://www.thisdaylive.com/index.php/2017/12/15/son-launches-pam-to-check-substandard-products/).
Upon careful review, it is very
clear that this sticker is nothing but an additional tax to further cripple the
manufacturing industry and burden the Nigerian consumer who is already reeling
over the load of sporadic fuel supply, near absent electricity, high price of
food in the market. It is also an unfair reward to an agency that has failed as
the gatekeeper of standards in Nigeria, even though it was already equipped by
law (See the Standards Organization of Nigeria Act, 2015 Act No. 14)
(http://www.son.gov.ng/son-mandate/). It is also a failure of the government to
enforce a very well thought out law, and instead take the lazy way out by
punishing the citizens for its inability to enforce existing laws.
The premise of the new law is
that the stickers, equipped with QR codes, will be a stamp of quality to assure
consumers they are not buying counterfeit products. The claim is that the
sticker is needed to save Nigerians who are dying every day from the failure of
counterfeit products. This logic is flawed for many reasons. Let's dissect the
premise. I believe we can all agree that counterfeit products cost the Nigerian
economy billions. Let's look at something as simple as a phone charger. How
many phone chargers do you have to buy before you get one that works? What
about fires due to low quality electrical appliances? Substandard bulbs in the
market that cease to light up a few days after purchase; scores of people dead
from substandard tyres failing on the road; the list is endless. For the food
and drugs aspect, the NAFDAC (National Food and Drug Agency) number covers this area adequately, so we will not
address that in this piece. The challenge I have with this law, is that it is
touted as a blessing to manufacturers and consumers. However, in many of these
cases, made-in-Nigeria goods in life-threatening areas are vastly superior to
the counterfeit imported goods, because the local industries must self-regulate
to maintain their customers custom. In the construction industry, Nigerian
wires are vastly superior to imported wires. Similarly, the most sought-after
aluminium casement profiles are from a Nigerian brand. I believe the deaths and
multiple issues are not caused primarily by made-in-Nigeria goods.
My point is that majority of the
issues and deaths are caused by importation of substandard products, by
unscrupulous traders. It is often substandard electronics, low gauge steel
structural members, substandard auto parts that result in deaths when they
erupt in fire, or explode, or simply fail.
Why then would I oppose a sticker to authenticate goods? Because these
importers have a lot of help from none other than SON. How?
It is already mandatory for all
regulated goods that are to be imported into Nigeria, to undergo mandatory
testing. See below, the information on
Intertek's website. Intertek is one of Nigeria's designated testing agencies
with labs all around the world: "Every consignment of imported goods which
contains regulated products must be accompanied by a Certificate of Conformity
(CoC)issued by an independent accredited firm, such as Intertek. The CoC is
electronically transmitted to SON's portal who will then generate the SONCAP
certificate on the basis of the CoC and will hand it over to the importer or
Importer's agent against the clearance of goods in Nigeria." (http://www.intertek.com/government/product-conformity/soncap-importers-nigeria/)
The Nigerian Ports Authority also lists the
CoC as one of the mandatory requirements for the issuance of a form M. You
cannot even get a form M from the banks without the product test certificate
number (http://www.nigerianports.gov.ng/import-export-guidelines-3/). Before
you import any regulated product into Nigeria, you must submit that product for
a test at a designated independent lab in the country of origin. These labs
charge a hefty fee to test products and you can spend up to $3000 per
container, depending on the number of unique products you intend to import into
Nigeria. If your product does not pass the test, they will not issue a
certificate. How come we have all these substandard products in Nigeria then?
Here is where the story gets interesting, SON issues certificates for as little
as N10,000 with absolutely no testing, and no corroborating test
certificates. It will be interesting to
see the product test certificates on the basis of which SON issues all SONCAP
certificates. I challenge the government to hold SON to an audit to produce all
the corresponding test certificates. If indeed Intertek issued certificates to
importers for substandard products, then the solution is to discontinue with
Intertek, and get a new testing agency. If it is SON randomly issuing SONCAP
certificates, then they should be held accountable. This is the solution. It is
already encapsulated in the law. The government should do its job and hold
itself accountable. Do not punish business people and consumers with additional
taxes. It is counter-productive, and unfair to the people who have placed their
trust in this government.
It is morally wrong to reward
SON's incompetence with a N3 tax on each of the goods we manufacture and sell.
The problem is enforcement. SON is already empowered by previously existing
regulations, and this PAM sticker is a case of overreach. They should fulfil
their mandate with the regulations previously on ground. There is no value
added to the either the average Nigerian, the importer, or the manufacturer
with this new regulation. It just gives another agency the opportunity to
harass honest Nigerian businesses that are trying to build the economy. It will also create a bottle-neck as
everybody scrambles to SON to get stickers for everything they sell. Does SON even have an idea of the number of
products that will require stickers? Mind you, it is not per product type, it
is one sticker for each and every product. In other words, if you went to the
super market to buy 10 reams of paper, each of the 10 reams will have a PAM
sticker purchased at N3 each by the manufacturer or importer. I can already see
a situation where they run out of stickers the way the immigration service runs
out of passport booklets. What will be the cost to the economy then?
I appeal to The President,
through the Presidential Enabling Business Environment Council, to put a halt
on this new law by executive order and look into the assertions made in this
piece. A lot of progress has been made in easing the process of doing business
in Nigeria, but this PAM sticker is many steps backwards. SON should earn the
public and the business community's respect by actually adding value. How? They
should implement the previously existing laws, and we will all be safer for it.
