Sweden’s New Law On Cheaper Repairs Threatens Alaba Electronics Market In Lagos

 

The Oasis Reporters

September 24, 2018

 

Shoe repairs in Sweden, Alaba electronics market in Lagos, Nigeria.

When the oil boom era made Nigeria affluent, unprecedented consumer spending peaked, such that under the Gen. Yakubu Gowon regime (1966 to 1975), the head of State once boasted that Nigeria had so much money, the problem was in spending it.

Nigerians then bought brand new things even up to successive years until the military adventurers plunged the country into unmitigated poverty due to mismanagement.
Manufacturing firms exited as not many people could afford their products, enough to sustain in business, neither was the atmosphere conducive for investments.

To survive, Nigerians embraced fairly used products popularly called Belgium, okrika or ‘bend me down’.

These fairly used goods are usually discarded items that are thrown into the waste bin in affluent European cities where disposable income is very high, compared to Africa.
Nigerians living in Europe and the Americas easily pick them up very early in the morning and ship them back home.

In Ikechukwu Ozor’s first week in Turin, Italy 23 years ago, he picked two mattresses, one stained with semen and the other with baby’s urine. He quickly scrubbed and shipped them home. His younger sister took one to her husband’s house while his older brother who was about getting married took the other one.

Today, he is an established shipper of fairly used electronic goods and automobiles to the Lagos ports.
The booming trade in imported goods ranging from electronics, automobiles, clothing materials, hospital equipment etc generates over 100 billion naira annually and employs more than ten million Nigerians from importation to haulage, repairs, sales etc.

All that is being threatened going by the new Swedish law that gives tax breaks for repairing broken down items and increasing taxes on new purchases, called the ‘chemical tax’.

The Local news report has it thus:
“How Sweden Wants To Make Repairing Things Cheaper

Photo :”There’s no business like shoe business”: A repair in process at Skomakeren Henry in Lund.

 

Sweden’s government wants to give people tax breaks on repairing everything from shoes to washing machines as part of a new green drive to help the environment by making the country less wasteful.

In their proposals for its autumn budget in 2016, the ruling Social Democrat and Green parties planned to slash value added taxes on repairs to bicycles, clothes, and shoes, and to bring in a new tax break for people who carry out more expensive repairs to fridges, dishwashers and washing machine.

At the same time, the government planned to make buying new white goods and computers more expensive, by slapping on an additional “chemical tax” to cover the cost to the environment of substances which are hard to recycle.

“This issue was a really low priority under the last government,” said Per Bolund, then country’s minister for finance markets and consumption. “But if we want to solve the problems of sustainability and the environment we have to work on consumption.”

As well as encouraging them with lower prices, the government also plans a publicity drive to encourage people to repair their things more often, with 43 million Swedish Kronor (SEK) allocated for pushing the new plan.

“One area we are really looking at is so-called ‘nudging’, Boland said. “That means, through various methods, making it easier for people to do the right thing.”

He said that might be as simple as putting in clearer signs directing people to the nearest recycling facilities.

“From my point of view, it’s not necessarily about consuming less, but more looking at what we consume and how.”

The government estimates that the tax breaks for repairing white goods will cost 190m Swedish kronor a year, while the reduction in VAT for repairs of cycles, clothes and shoes would come to 270m kronor a year.

The new chemicals tax is expected to raise about two billion kronor a year”.

If the new Swedish law is faithfully enforced, products would stay longer in homes and what is discarded, which forms the bedrock of the booming multi billion naira trade in Nigeria would be reduced drastically.

Over the years, Europeans have been known to dump working products with slight malfunctions as they go for newer models.

One market that would feel the impact most is Alaba International electronics market, easily the largest and best organized electronics market in Africa.

What is today the Pride of Africa in terms of electronics marketing started as a street market at Alaka in Surulere, Lagos, Nigeria.
It soon outgrew it’s street status and was relocated to Suru. As the market blossomed, Suru became too small for it also.

The Lagos State Government decided to relocate the market again, split it into two, one half moved to Mile 12 in Ketu and the other half was moved to Alaba in Ojo, now known as Alaba International Market (Electronics).

Alaba International Market (Electronics) took off at its new location in Alaba, Ojo, on April 18 1978. The area then was a forest but the dogged efforts of the founding fathers of this market saw the forest give way to a modern market which has become international in all respects.

Today Alaba International Market (Electronics) stands tall among all organized markets the world over.

The membership of the market now stands at over five thousand shops, excluding attachments and sub-shops. More than two million people transact business in this market daily.

It has modern facilities like Banks, hotels and every social amenity found in markets around the world.

Observers note that the flip side of the new law may lead to under capacity in factories as lack of sales of their products could lead to factories shutting down or relocating elsewhere, and that would not be too great for Sweden as Ericsson and Sveco their prime industrial concerns may wobble under high tariffs in the face of other competitors within Europe.

Greg Abolo

Blogger at The Oasis Reporters.

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