Nigeria spends a whopping $3 billion on the importation of Ankara fabrics that can be produced locally, just one of a long list of examples of how the country is failing to develop its non-oil sector.
The trend is particularly troubling as experts, including the World Bank, have urged the nation to prioritise its non-oil sector to address lingering economic challenges.
The losses extend beyond monetary terms, eroding Nigeria’s GDP, employment, and tax revenue.
World Bank Chief Economist Indermit Gill has advised Nigeria to focus on three critical areas: non-oil growth, support for vulnerable households, and creating a business-ready economy.
To achieve sustained growth in the non-oil sector, Nigeria must remove the long-standing barriers facing the sector, particularly the manufacturing sector.
The challenges range from insecurity to high interest rates, and escalating energy costs.
According to Musawa, “Nearly 90 percent of the Ankara consumed on our continent is imported, leading to an annual loss of approximately $3 billion to foreign manufacturers. We must change this.”
The ministry is reportedly working on establishing manufacturing hubs and craftsmanship training programmes across Africa under the Design Nexus and Destination 2030 initiative.
However, without addressing Nigeria’s structural problems, these initiatives may remain empty promises.
As Ayo Teriba, CEO of Economic Associates, remarked, “People who are importing fabrics from abroad are not irrational. If they could find comparable quality domestically, they wouldn’t import.”
Supporting this, Muda Yusuf, an economist and chief executive officer, of the Centre for the Promotion of Private Enterprise, argued that the competitiveness of Nigeria’s manufacturing sector must be a priority.
“If Nigeria doesn’t make its manufacturing sector competitive, and our borders remain porous, the nation will continue to lose foreign exchange to other economies through importation,” Yusuf said.
He further noted that challenges like high energy costs, logistical hurdles, and the need to import raw materials make it nearly impossible for local fabric producers to compete with foreign manufacturers.
On the impetus that will drive the non-oil sector as a whole, and make the Nigerian manufacturers competitive, emphasis was laid on building infrastructures like railroad and pipelines.
Teriba emphasised that the government should focus on liberalising sectors like railways to attract private investment rather than borrowing heavily to build it.
Teriba pointed out that Nigeria could draw lessons from Brazil’s ongoing railway projects, which are expanding through Public-Private Partnerships (PPPs) to improve infrastructure and freight transportation.
Nigeria, he argued, should follow a similar model by connecting the coast with rail networks and further linking these to road infrastructure.
This strategy would not only reduce logistic hurdles, and other bottlenecks in domestic transportation but also attract sustained foreign direct investment (FDI).
Ultimately, for the Nigerian economy to be truly business-ready, every part of the country must be connected via rail and pipelines, as well as finding solutions to high energy costs, porous borders, and the FX crisis.
Only through such comprehensive infrastructure development can the nation lay the foundation for a thriving manufacturing sector and long-term economic prosperity.
