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By Merit Ibe
Nigeria’s business environment, currently hurting manufacturers has further reduced its value addition in the processing and manufacturing industries to less than 20 percent.
This was even as experts in the real sector who spoke to Daily Sun at the weekend identified poor funding, poor research, low infrastructure, insecurity among others as the key constraints mitigating value addition in the sector. In their opinion, value addition to primary products will generate more foreign exchange and contribute to the country’s GDP growth but so far the reverse seemed to be the case in the country.
Nigeria has abundant raw materials but these are mostly exported as raw commodities or semi products.
In the process, the country loses billions of naira and thousands of jobs to countries which do the real value addition.
They explained that raw materials have potential to generate adequate foreign exchange earnings for the economy and strengthen the naira against major currencies, particularly when the products are processed.
The nation’s vast raw materials in the non-oil sector can be leveraged to increase our exports and improve our trade balance.
Mansur Ahmed, president of the Manufacturers Association of Nigeria (MAN), said recently in Lagos that value addition was key to success in manufacturing, as it involves transforming raw materials into finished goods.
Also speaking Chairman, MAN Apapa branch, Frank Onyebu, urged government to create policies and the enabling environment for value to be added to products before exporting.
He argued that the manufacturing industry is supposed to be the engine of the economy, but has so far failed to process because government has shown little concern.
Government is paying lip service to the issue of operating environment, lamenting that many potential investors abroad are interested in investing in this country but for the harsh environment. “The country would have moved forward not just in value addition but in high technology but we are just sliding back.
“It is a pity that we still export primary products without value addition. We all know that the value of any product appreciates with each value addition.”
He however, noted that manufacturers were constrained by a number of factors such as finance, lack of machinery, inadequacy of trained personnel, poor quality control, infrastructure deficiencies, insecurity and poor operating environment.
For value addition to make the required impact, Onyebu said small and medium scale manufacturers would have to be involved.
“Funds and FX, which are not readily available, are needed to procure the required machinery.
Government needs to create technical institutions and make the existing ones functional. Millions of jobs could be created with the right policies.
