Nigeria currently ranks low among major emerging markets manufacturing attractiveness, which is a baseline to drive industrial revolution for any nation, according to a recent report presented Monday at the 13th Nigeria Economic Summit Group (NESG).
According to the report, Nigeria has three as its best country score on a list of ratings, while countries like Korea Republic and Mexico had seven as their best score on the rankings.
The report states that Nigeria’s manufacturing sector, which currently contributes 9 percent to GDP, has the potential to contribute up to 30 percent of GDP, as the country can prioritise its agricultural value chain development.
Key stakeholders in the manufacturers that spoke to BusinessDay said the failure of the government to provide conducive operating business environment has limited the potentials of the sector and the ability to achieve sustainable production of made-in-Nigeria goods.
Frank Jacobs, president, Manufacturers Association of Nigeria (MAN), said, one of the major ways of achieving the dream of made-in-Nigeria was by building a better business environment for manufacturers.
Jacobs said no nation in the world could achieve competitiveness “when its financial system lends to manufacturers at over 20 percent,” saying this was antithetical to the development of the real sector, and the only way to achieve the country’s dream was through the reduction of lending rate to 5 percent.
Also, inconsistent policy has been a clog in the wheel of progress and will continue to dog the dreams of industrialisation in Nigeria if not addressed, manufacturers said. They also noted that delayed and unclear policy directions had equally done more harm than good to manufacturers.
“Policy inconsistency destabilises industrial production plans and erodes investor confidence. For instance, the suspension of the Negotiable Duty Credit Certificate (NDCC) to exporters and non-payment of existing claims has discouraged non-oil exports and frustrated contracts entered into with overseas buyers,” Aliko Dangote, president of Dangote Group, said late last year.
Manufacturers and farmers are also hampered by poor infrastructure. Nigerian manufacturers spent N59 billion on alternative power sources such as gas, diesel, and fuel in 2015, according to MAN.
Road network is in a terrible state while the railway system is in bad shape.
Despite being a major producer of agricultural produce, Nigeria is still faced with the challenge of getting it right in terms of value-addition and adherence to standards in order to achieve export competitiveness, experts say.
Experts believe a raw commodity, when properly processed, can earn three or five times more money to an exporter.
“When local Industries add value to fresh farm produce, it will help to guarantee the sale of surplus farm products and prevent the colossal waste that is being experienced,” said Sani Dangote, president, Nigeria Agribusiness Group, told BusinessDay.
Despite producing about 1.5 million metric tons of fresh tomatoes yearly, the country experiences about 700,000 metric tonnes postharvest loss, according to data obtained from the Federal Ministry of Agricultural road map.
The NESG report identified poor packaging and standards as the major reason for low patronage of Made in Nigeria products.
According to experts, the impact of poor packaging is that the country’s manufactured products do not often compete well with products from other countries that are better packaged, with interesting designs and labels.
The document urged the government to set up a committee which should be headed by the minister of Trade and Industry to own the Made in Nigeria Initiative and develop an integrated strategic plan on made in Nigeria.
