Despite efforts for Nigeria to become an industrialised economy with high sustainable growth rates since October 1960 when it got its independence, stakeholders in the real sector believe that the level of industrialisation remains poor.
Records have it that the country’s non-oil sector accounts for 9.1 per cent of the gross domestic product (GDP).
According to the Manufacturers Association of Nigeria (MAN), the sector still contributes a meagre 9 per cent to the nation’s GDP, which has been blamed on the challenges faced over the years.
The association lamented that, though it planned in 2002 that in the next five years, the sector would be able to contribute about 15 per cent to the GDP, its plan did not materialise due to the many challenges that have bedevilled the sector.
Indeed, the quality of the business environment remains a source of concern to investors, especially in the real sector in the last 60 years, as it has posed a major risk to growth across sectors.
According to its acting Director General, Ambrose Oruche, who decried the state of the sector since 1960, Nigeria has had phases of plans created to make sure the country is industrialised, but inconsistency in government’s policies has been the bane. Industrialisation in Nigeria has suffered a huge set back.
He explained that at a time, the country adopted import substitution mechanism to allow what the country produced to be assembled locally, thereby increasing local content and export.
But he complained that the challenge was that plans were truncated without being accomplished because of change in government.
“When a new leader or administration comes on board or there is change of baton, the incumbent may not agree with what the former had on ground.
“So, inconsistency in government’s policies has affected the sector hugely.”
He disclosed that in recent years, the challenges of the industry has been constant, which include policy somersault, infrastructural deficiency, high cost of funding, general uncompetiveness of Nigeria’s manufacturers, which have really affected the growth of the sector.
“That we are still talking of the sector contributing a meagre 9 per cent of the GDP against the 15 per cent the association planned in 2002 is not encouraging. The association had planned in 2002 that in the next five years, the sector should be able to contribute above 15 per cent to the GDP, but that has not been realised because of the challenges the sector has been going through.”
He lamented that as at today, manufacturers are still providing their water, generating their power, building their roads and others, adding “how can we industrialise with all the deficiencies.
Definitely the sector cannot contribute much, when it is really challenged on all sides, Oruche said.
“For the ports infrastructure, you see congestion, which is worse now than it used to be. It’s like we are going backwards in terms of port management instead of moving forward.
“There was the period it took us average of three days to clear consignments, now it takes an average of two days or a week to clear your goods, and in the process you incur demurrage and a lot of expenses.”
Expressing hope that things would get better with a population of over 200million ready market, he implored the government to as a matter of urgency, show interest in the manufacturing sector that has the capability to turn the economy around and contribute a lot to the GDP. Through strategic partnerships, the association noted that it has embarked on a number of engagements that will bring success to Nigeria’s manufacturing ecosystem in the areas of intra-trade facilitation, renewable energy, amongst others.
He advised government to develop industries and create policies to enhance the sector so as to contribute its quota to the nations development.
The MAN President, Mansur Ahmed, said: “We need an enabling environment to operate smoothly in this country because where there is difficulty in getting prompt power supply to operate, that one alone discourages investors to come into this country due to the instability in the power supply to the economy and we depend on electricity to run our businesses here.”
He also emphasised that the security situation in the country deteriorated in the last decade.
The power situation remains a major burden on businesses in the last 60 years of independence. It is one area in which the trend has been that of progressive decline. Power supply has consistently lagged behind, which slowed the pace of the economic activities and population growth. This development impacted negatively on investment over the past few decades with increased expenditure on diesel and petrol by enterprises.