Impact Of Smuggling On Our Local Industries
(A Case Study Of Sunrise Flour Mill, Emene, Enugu)
Smuggling, the clandestine importation or exportation of goods without proper authorization, exerts a detrimental influence on our local industries across various dimensions. Firstly, it undermines fair competition by flooding the market with cheap, often inferior, goods, undercutting locally produced alternatives. This influx depresses prices, reducing profitability for domestic manufacturers and stunting their growth potential. Moreover, smuggling deprives governments of crucial tax revenues, which could otherwise be invested in infrastructure or industry support programs. Consequently, local industries face heightened financial strain and may struggle to innovate or expand operations. Additionally, the proliferation of smuggled goods fosters a culture of illegitimacy, eroding consumer confidence in domestic products and hindering efforts to cultivate brand loyalty. This phenomenon not only undermines the economic sustainability of local industries but also jeopardizes employment opportunities and impedes socio-economic development. To mitigate these adverse effects, robust enforcement measures, public awareness campaigns, and collaborative efforts between governmental agencies and industry stakeholders are imperative to safeguard the vitality of our local industries.
Title page
Approval page
Dedication
Acknowledgement
Research proposal
Table of contents
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
1.2 Objective of the study
1.3 Statement of the problem
1.4 Importance of the study
1.5 Scope of the study
1.6 Definition of terms
CHAPTER TWO
LITERATURE REVIEW
2.1 Definition of Smuggling
2.2 Causes of smuggling
2.3 Effect of smuggling in Nigeria economy
2.4 Scio – economic implication of smuggling
2.5 Argument for smuggling
2.6 Need to check smuggling
2.7 People who engage in smuggling
2.8 Foreign countries abetting smuggling
2.9 Future prospects of Nigeria local industries
CHAPTER THREE
RESEARCH METHDOLOGY
3.1 Primary Source
3.2 Secondary Source
CHAPTER FOUR
PRESENTATION AND ANALYSIS OF DATA
4.1 Summary of Analysis
CHAPTER FIVE
5.O Discussion and recommendation.
5.1 Discussion of findings
5.2 Conclusion
5.3 Areas for further research
References
INTRODUCTION
BACKGROUND OF THE STUDY
Nigeria is one of the developing countries of the world yet at the fringe of industries development, but the huge internal market and the vast resources base both human and material are so formidable that local and foreign investors should be tumbling over each other in advancing the peace of industrial development.
At this point one may ask, what are the restraining factors? First on the list of these factors is smuggling which is going to be main research topic of this project.
One of the measure taken by General Ibrahim Babangida the former President of Nigeria and also regime of Gen. Sani Abacha to accelerate the growth of local industries is the widespread ban on importation of raw materials and certain classes of goods which was seen to be detrimental to the growth of our local industries. If must be admitted that this measure conflicts with the interest of foreign experts and home importers so it was easy to speculate that every effort would be made by them to render it nugatory. The measure was generally welcomed by, the private sector and should have assisted local industries to grow and expand, if properly enforced. However, the act of some unscrupulous men through of our local industries.
There have been reports of large scale smuggling of goods in and out of the country.
Various groups of local business men are being accused including some Orientals (Japan, Europe and China and Assists who are said to be notorious in the malpractice.
In 1995, lien. Sani Abacha and the federal government reviewed to check this hideous crime by given priority on agriculture and domestic investors. There have also been incessant calls from different government agencies that the organized private sector should join in the crusade by giving members and these swaggers in order to ride Nigeria out of this malpractice and ensure a strong and viable economic environment within which to operate.
Smuggling is not a new way of life in any part of the world. nations down through the stream of time have had on one occasion or the other need a way(s) to curb smuggling there is no nation through that can claim to have successfully curbed its entirely smugglers and their unpatriotic notorious acts. But in recent time, this act has become a regular feature of life in Nigeria and Nigerian’s in their increasing members have bee calling on the governments and citizens to do this or that to save them from this curse that can lead to a retardation of the much needed industrialization take off.
At this juncture, lets draw attention to SUNRISE FLOUR MILL EMENE, which is one of the Enugu state government established local industries established in 1983 under the defunct administration of Chief Jim Nwobodo.
The industry is solely of food processing industries with the following products line, SUNRISE Flour, SUNRISE SEMOLINA, SUNRISE WHEAT.
Unfortunately, the industry could not survive the strain of the economic depression as a result it went out of production in 1985 and reassumed production again 1992. It was later found out that SUNRISE FLOUR could not survive the flux of smuggling of flour in the market hence its inability to survival. This research work will fully treat the effect of smuggling on our local industries.
1.1 OBJECTIVE OF THE STUDY
The purpose of this study is to find out the ways of combating smuggling which is one of the major factors retarding the growth of our local industries. It is also aim of exposing the socio-economic implication of smuggling and the need to boast our local industries
STATEMENT OF PROBLEMS
One major problem militating against the growth of our local industries is smuggling of goods in and out of the country. This has prompted this research ( into finding the causes, ways of preventing it and exposing the people who engage in this act).
To this effect, the following problem questions would be answered in the course of doing this work.
To what extent is the growth of our local industries?
Is the average local industry able to provide the needs of Nigeria require of them.
If no to question 2, why can’t they provide these needs? What are the avenues open to them to accelerate their growth?
Can’t there be a way of preventing smuggling which is one of the factors retarding their growth?
Can there be argument for smuggling?
Which are the industries most effected by smuggling?
All these problem questions would be taken care of in this research work through efficient and effective conduct of this task by the researcher.
IMPORTANCE OF THE STUDY
This research work will be of immense benefit to industries suffering from the hands of smuggling, and unfolding the socio – economic implications of smuggling, and the need to check smuggling of goods which will serve as a Catalyst in the growth of our local industries.
It will also be of help to business administrative students by giving them an insight of some economic measure widening their knowledge in economic environment of this country, and the role they could play after their career in promoting fostering the economic status of this great nation Nigeria of immense benefit, would the project be to student of related discipline and other interested scholars.
Finally other researchers can use this study as a launching pad to study into other areas of economic problems.
SCOPE AND LIMITATION
For the purpose of reliability the study covered the SUNRISE FLOUR MILL EMENE as the case study
In the course of carrying out this research work, problems were encounter as usual along the line. As nothing is so easy to get these days coupled with the dynamic nature of our economy.
It should be recalled that the data collection embraced the distribution of questionnaire which is the primary source, and library research.
Firstly, the cost of collecting information, transportation and gathering data for constraints of this research work.
Secondly, some staff in some local industries were non –chalent and unable to give a detailed information on their industries because they think that it will reveal their secret.
Thirdly and final time constraints posed another limitation. The time limit for this project is not enough coupled with our examination engagements.
DEFINITION OF TERMS
There is however bounds, to be terms which may be lien to the reader to destine some of them to enhance simple analytical approach to the study.
The structural Adjustment programme (SAP). This refers to an excellent policy made in good faith by government to solve Nigerian’s long and short term economic problems. The package includes trade liberalization, devaluation of currency and privatization.
The Gross Domestic product (GDP). This refers to the totality of the product of a nation in a given period both agricultural and industrial.
Inflation:- This is a period when there is a persistent rise in price where there is too much money in circulation chasing few goods.
Contrabands:- These are goods brought into or taken out of a country. This is a contrary to the law (trade in) goods brought in or taken out.
Foreign Investors: – Foreigners who come into Nigeria and invest their capital in the production of goods and services.
Impact Of Smuggling On Our Local Industries:
Smuggling can have several negative impacts on local industries and economies. It refers to the illegal transportation and trade of goods across borders without paying the required customs duties or taxes. Here are some of the key impacts of smuggling on local industries:
Unfair Competition: Smuggled goods often enter the market at lower prices than domestically produced or legally imported goods because they evade taxes, tariffs, and other import costs. This unfair competition can hurt local businesses and industries, as they struggle to compete with cheaper, smuggled alternatives.
Revenue Loss: Governments rely on customs duties and taxes on imports to generate revenue. When smuggling is widespread, it leads to significant revenue losses for governments. This can result in budget shortfalls, reduced public services, or increased taxes on other sectors, further affecting the overall economy.
Erosion of Market Share: Smuggling can erode the market share of legitimate businesses, leading to reduced profitability, layoffs, and even business closures. Local industries may find it challenging to invest in research, development, and expansion when facing unfair competition from smugglers.
Quality and Safety Concerns: Smuggled goods often evade quality control and safety regulations, as they are not subject to the same scrutiny as legally imported or domestically produced goods. This poses risks to consumers who may unknowingly purchase substandard or unsafe products.
Undermining Investment: Smuggling discourages both domestic and foreign investment in local industries. Investors may be hesitant to commit resources to industries where the market is distorted by illegal activities, making it difficult for legitimate businesses to grow and innovate.
Loss of Jobs: As local industries struggle due to smuggling, they may be forced to cut jobs or limit new hiring. The economic ripple effect can lead to higher unemployment rates and reduced income levels in affected regions.
Damage to Reputation: A reputation for rampant smuggling can harm a country’s image in the global market. This can deter foreign investors, trading partners, and tourists, further impacting the local economy.
Weakened Rule of Law: Smuggling undermines the rule of law by promoting illegal activities and corruption. This can lead to a breakdown in governance and institutions, creating an environment that is not conducive to business development.
Environmental Impact: Smuggled goods are often produced with little regard for environmental regulations. This can lead to environmental degradation and harm to natural resources.
To combat the negative impact of smuggling on local industries, governments typically take measures such as strengthening border security, increasing penalties for smuggling, promoting fair trade practices, and improving tax collection and enforcement. International cooperation and agreements can also help address smuggling by harmonizing customs procedures and regulations across borders. Ultimately, addressing smuggling is crucial to fostering a fair and competitive environment for local industries and ensuring sustainable economic growth.