Industrial development remains one major draw back in Nigeria’s currently improving macro-economic credentials. The manufacturing sector has, for many years, remained stagnant in terms of both annual growth and contribution to the GDP. Yet, this sector is the driver of sustainable economic development in the world today.
Therefore, a new plan by government to prop up this important sector of the economy under its Nigeria Industrial Revolution Plan [NIRP] represents a strategic addition to the Economic Transformation Agenda of President Goodluck Jonathan. The plan, which is developed by Trade & Industry Ministry, is a welcome developnent as it comes with a comprehensive approach to address all the constraints to our industrial development.
Nigeria has been able to maintain rapid economic growth despite that the manufacturing sector contributes only 4% to GDP. The immense growth potentials of the economy can then be better appreciated if government can, through this initiative, raise the contribution of the manufacturing sector to GDP to 10%. This is the minimum target of the government by 2017, the realisation of which will amount to a major economic transformation itself.
The present level of Nigeria’s industrialisation was achieved as a result of government initiatives to promote indigenous participation and import substitution in the 1970s. The progress the nation made with these efforts can only be appreciated when we compare our position with other African countries where dependence on imported consumer goods is almost total.
Since the era of deregulation in the 1980s, there has not been any comprehensive plan by government to take our industrial development to the next level. This is the explanation for the stagnation the industrial sector has faced since then. The present government’s design of a 5-year plan to expand the nation’s industrial capacity therefore comes to fill a major policy gap that has been missing since the 1970s.
The beauty of the plan is that it is focusing on sectors where we have comparative advantages – which are agro-allied sectors, metals & solid minerals, oil & gas related industries, construction, light manufacturing and services. These are the growth-driving sectors of the economy and mostly the main drivers of the high growth in non-oil exports at the moment. There is a lot of wisdom in taking a new step to maximise the benefits derivable from these sectors for the nation.
By thus adding values to what we are presently doing in these sectors, it is possible to meet the expected outcomes of the plan in terms of job creation, economic and revenue diversification, import substitution and so on. These are highly desirable goals for the nation, which government after government have truly identified but could not accomplish.
We believe that our industrial sector truly needs a revolution to launch it into the next level. We are convinced that the government that is able to design the roadmap to industrialisation is also able to make it happen. The environment is right in terms of the abundant human and material resources at our command as well as the growing attractiveness of our economy to foreign investors. The strong inflow of foreign portfolio investments follows the creation of attractive opportunities in our financial markets. We expect that NIRP can equally create an attractive environment for massive inflow of direct foreign investments into our industrial sector.
A large internal market is available to guarantee the success of the import substitution strategy. We consider NIRP to be another strategic move by the present government to reclaim our large internal market, which imported fake and sub-standard products are presently holding captive.
The emphasis being placed on competitiveness under the plan is quite important, as it becomes a new source of pressure on government to improve our infrastructural facilities. It offers a good opportunity to address comprehensively all the constraining factors to domestic production, which include high cost of funds, industrial technology, skills development and the general improvement of our investment climate. Government should mobilize all hands on deck to follow the roadmap to ensure that this new opportunity for industrial development does not elude us.