As falling crude oil prices continue to threaten Nigeria’s revenue base and economy, the country’s quest to diversify through manufacturing may still be unrealistic following the near neglect of 74 out of 77 industries that make up the sector.
In the last four to five years, specific attention has been paid to the cement, sugar, and now automotive sub-sectors at the expense of 74 other industries, which have the capacity to create thousands of jobs and enlarge manufacturing’s contribution to Gross Domestic Product (GDP).
Sub-sectors such as fruit juices, electronics, aluminium, iron and steel, paints and varnishes, toiletries and cosmetics, rubber and foam have suffered badly owing to the absence of strong policies to drive them.
Similarly, sub-sectors like domestic/industrial plastics, nail and wire, packaging, printing, carpets and rugs, furniture and plywood, school chalk, crayons, glass, and ceramics, among others, have been unable to compete with imports due also to the absence or near absence of clear-cut policies and well-defined incentives to drive them.
READ ALSO: Uproar in Senate over 1% VAT compensation for states affected by ENDSARS violence
To develop the cement industry, for instance, the Federal Government introduced the Backward Integration Policy (BIP), which has consequently attracted $7 billion in private investment, according to Olusegun Aganga, minister of trade and investment. The country’s cement capacity has also risen to 43.5 million tonnes.
With the same policy, the sugar industry has attracted over $2.6 billion in investments and a number of mini firms. But a similar policy has not been extended to other sectors.
“What type of manufacturing policy does the government have?” asked Robin Neville, managing director, First Aluminium plc, manufacturer of roofing sheets and coils, in a recent interview with BusinessDay.
According to Neville, the aluminium industry is stifled by the influx of sub-standard products resulting from laxity by the Nigeria Customs Service.
“We lost 200 employees in 2012. We had to close down operations in December 2012, because production was and still is uneconomic,” he stressed.
Nigeria has depended so much on oil for its revenue and in benchmarking its budget. Incidentally, Brent crude price has fallen to $84.9 per barrel, from over $100/b a few months ago. This is not far from the $78 budget benchmark, thereby exposing the weakness of the economy and probable negative consequences if the price falls below the budget benchmark.
This has diverted the government’s attention to seeking alternative ways of diversifying.
But in the electrical/electronics industry, no specific policy has been designed to check counterfeiting and grow the industry’s capacity to serve local needs and fully move into other markets, say stakeholders.
“There is still the counterfeiting of cables and delays in clearing of imports at the seaports,” said the players in their sectoral report obtained at the annual general meeting (AGM) of the Manufacturers Association of Nigeria (MAN).
In spite of the N100 billion Cotton, Textile and Garment (CTG) Fund introduced to steer the textile and apparels sub-sector, the industry is still struggling, as only 10 fabrics makers remain in operation. Unfortunately, some of these so-called surviving firms are also either doing other businesses to complement fabrics manufacture or are now producing minimally. For instance, African Textiles Manufacturing Limited (ATM) is now into customised textile production rather than massive manufacturing, according to a senior official of the company.
“Government uniformed agencies do not patronise the industry,” said Paul Jaiyeola Olarewaju, director-general, Nigeria Textile Manufacturers Association (NTMAN), in an interview with BusinessDay.
“Government often gives out contracts to people who go abroad and import the uniforms. This kills the industry. There is a major problem which is the influx of foreign textiles into the country. As at today, almost 80 percent of textiles in the country are imported. Though it is still under ban, it’s also still imported and smuggled,” he said.
ODINAKA ANUDU
