By Merit Ibe, [email protected]
What perhaps would really be of concern to many as Nigeria marks its 63rd independence anniversary is the fact that its huge potential that ought to have catapulted it to the peak of global economy are rather left to rot in various sectors due to poor policy environment.
With foreign reserves rabidly depleted and the quest for foreign currency largely unmet, oil/ gas prices instability and weakened manufacturing sector crisis, Nigeria’s aspiration for industrialisation remains a mirage at 63 compared to where it was at independence and when viewed alongside other nations on similar economic pedestal in 1960.
Today, amidst these potential, the country’s economy is clouded by high rate of insecurity, public sector corruption and other headwinds that tend to blight it as a failed state.
Despite efforts by successive governments to industrialise the country and achieve sustainable economic growth, real sector stakeholders are appauled that the economy is still crawling.
At 63 , the nation that ought to have grown to full adulthood unfortunately is still crawling.
The lack of industries, stunted growth in manufacturing, rising unemployment rate, food insufficiency, lack of investments as a result of poor infrastructure, capital flight due to huge dependency on importation, inadequate raw materials supply, production of sub-standard goods, illiteracy/inadequate skilled manpower, among others are still a huge challenge to the nation.
Experts opine that for Nigeria to be relevant in a dynamic world, it must have a Gross Domestic Product (GDP) of over a trillion dollars, with the manufacturing sector contributing at least 21 percent of the GDP.
At 63, the Manufacturers Association of Nigeria (MAN) is worried that the sector that should propel job creation, productivity and economic growth is encumbered by a series of challenges as it recorded a dismal 9 percent average contribution to the GDP in three years.
The association listed its challenges to include power supply, which remains a major headache for businesses; insecurity, decaying infrastructure, shortage of forex and naira depreciation, among others. These challenges have remained the bane of the nation’s real sector.
Director General of MAN, Segun Ajayi-Kadir, noted that the economy cannot grow sustainably without a strong and competitive productive sector, since manufacturing sector is the engine of economic diversification and growth.
Ajayi-Kadir posited that a robust manufacturing sector should be based on coherent and coordinated efforts resulting from close collaboration between government and manufacturers.
He lamented challenges such as forex scarcity, inconsistent foreign exchange policies, inefficient transport infrastructure, high production cost, weak consumer demand and the new competitiveness pressure foisted by the AfCFTA .
He appealed to the CBN to grant manufacturers more access to forex to enable them meet with production demand and supply.
“Clearly, the sector is still in need of a comprehensive and concerted support system from the government, as observed trend shows that the sector is struggling due to diverse familiar challenges.
“Manufacturers are still inundated with numerous, oftentimes duplication of demands from all tiers of government in form of taxes, levies, fees, permits, etc;
“Manufacturing companies are continually overwhelmed with multiple regulations from different regulatory agencies and excessive drive for revenue by government agencies. Dearth of trade facilitation infrastructure, poor access to the nation’s sea ports and longer turnaround time for clearance of cargo collectively stifle the smooth operations of manufacturing concerns.”
He also emphasised that the security situation in the country deteriorated in the last decade.
Former Chairman, MAN Apapa branch, Frank Onyebu expressed disappointment at the pace of growth of the nation and the manufacturing sector, saying the manufacturing industry, just like the rest of the country, has not found its footing.
“I’m afraid we haven’t done well at all as a nation.
At 63, we are supposed to have grown into full adulthood but unfortunately we are still crawling.
We appear to be doodling; moving aimlessly about. We could properly be referred to as elderly toddlers. He pointed out that there has not been progress in manufacturing in recent years.
“We are retrogressing rather than progressing. Someone said we are going backwards at a very fast pace.”
He said the country has potential and capacity to become a major industrial power, but lack government support.
“We have the capacity. We have the people. We have the resources. What we lack is government support. We have lost so much opportunities as a result of this lack of government support.
There was a time, in the recent past, when lots of Chinese, Indian and other Asian companies were reaching out to us, making inquiries about investing in Nigeria. Not anymore! Why? Our harsh environment. He decried the harsh business environment and advised that government needs to create a favourable environment for manufacturing to thrive.
“The government needs to invest in infrastructure, invest in power, fight insecurity, fight corruption, enact policies that would make manufacturing more attractive than importation of finished products.
“These may appear far fetched because of the paucity of our resources, but I assure you that they are doable if we set our minds to it. The government doesn’t have to invest its own direct resources. It could accomplish much via the public private partnerships route.
“I can assure you that with our large population, Nigeria would be irresistible to investors from all over the world if we do the right thing. Nigeria could become a major investment hub. Nigeria could become the next big thing. China did it. Nigeria could become the next China.”
Chairman, MSMEs Group of the Lagos Chamber of Commerce and Industry (LCCI), Daniel Dickson-Okezie, this is a terrible time for manufacturers as they have had lots of problems bedevilling the sector before the present state of the economy. He listed the issues that have bedevilled the sector for decades and were still hindering the survival to include unavailability of forex, poor power, insecurity,free fall of the naira, hyper inflation, lack of palliative for the sector amongst others.
He pointed out the importance of good leadership to put things right as foreign investors are afraid of bad system of government which may jeopardise there business.
He also urged the present administration to look into the Ajaokutai steel industry, as no country gets developed industrially without the steel industry working.
“The dearth of Ajaokuta steel company is one of the areas that shows the problem of bad leadership in Nigeria.
For us to take off as an industrialised nation and to help develop Nigeria again, we have to bring back the steel sector.”