Way Forward For Manufacturing Sector

The Nigerian manufacturing industry is arguably, facing very terrible times and great challenges never experienced before now. You may choose to call it recession or downturn in the domestic economy. This is obviously occasioned by the economic meltdown leading to mass unemployment and social menace.

The manufacturing sector of any nation is a great catalyst to its over-all development. It is a major contributor to its per capita income and gross domestic product (GDP) and other developmental indices. Industry watchers and pundits of the Nigerian manufacturing sector therefore expect that by now, the nation should have been among the league of industrializing countries of the world like Brazil, Malaysia, India, Singapore, Indonesia etc, especially against the backdrop of the large potentials of the country’s resources and capabilities as compared to some of the above mentioned countries, four or five decades ago.

Many people are still bewildered about what really went wrong and where did we miss our steps. At the time of independence in 1960, and the early years after independence, the nation’s economy was thriving along with most of the industrializing counties of the world. Today, it is a different story all together.

The post-colonial administrations were able to record success in manufacturing sector through various economic development rolling plans, sound agricultural policies and export based economy. Credit must also be given to the governments then for their foresight, consistency, demonstrable political will and high level of transparency and accountability which saw most of those policies and programmes to their logical conclusion. The government of today needs to borrow a leaf from the past experience and seek measures to improve on it.

It is sad to observe that Nigeria used to be a safe haven for investment and a destination of choice for may investors; but today, the reverse is the case, with some corporate and industrial organisations re-locating to neighbouring African countries. Nigeria today is being described as one of the most un-conducive places to do business in the world. This is very unpalatable for the much needed foreign investment.

Reasons for this negative perception are not far-fetched. The insecurity challenges, epileptic power supply, bad roads network and poor transportation system, high rate of crime, a sea of unemployed youths, coupled with inconsistencies in government economic plans and policies, which make planning by manufacturing industry difficult, do not encourage good investment in Nigeria.

Also, high bank lending rate and uncontrolled infation, among others, also contribute to factors that make Nigeria unfriendly for investment .

Be that as it may, Nigeria can still chart a way out of the doldrums and forge ahead. First, government has to enunciate policies and programmes aimed at protecting local manufacturing concerns, especially from undue competition from cheap imported and most times substandard foreign products. Special funds should be created and made available to local manufacturing concerns while bank lending should be encouraged at very low interest rate.

Secondly, Nigerians’ penchant and taste for imported goods must be curbed. This is to encourage our local manufacturing industry which will in turn help improve our economy and per capital income, as well as provide jobs for many unemployed graduates.

Furthermore, government has to be very serious and consistent with its laid down policies and programmes and follow them to logical conclusion. For instance, whenever government makes pronouncement on manufacturing issues like ban on imported textiles or tires, it should not renege on it or change it halfway without any concrete or genuine reason.

Again, the dilapidated infrastructures need to be fixed and improved upon. In fact, a state of emergency is expected in areas like roads, transportation especially railways and power sector.  The government should take bold steps by involving the private sector in massively rehabilitating and reconstructing our roads to a motorable level all over the country. The Nigerian railway should equally be fixed.

This will go a long way in reducing cost of movement and transportation of goods and persons, thereby reducing cost of production. The electricity supply in the country needs to be improved upon so that extra cost incurred on running of generators would be saved and not transferred to the end consumers.

In addition to this, local manufacturing companies need to adopt international best practices by producing goods that can compete with imported ones. Local products should be attractive to the Nigerian public and even considered for the export market, thereby yielding foreign exchange for the country. All of these if properly implemented, would go a long way in addressing, and to a large extent, reversing the decline in the nation’s manufacturing sector. Only this way can Nigeria’s industrialisation dream and its vision of becoming one of the 20 best economies in the world become a reality.

Ayooso is a Port Harcourt-based  public affairs analyst.

Samson Ayooso