Manufacturers urge non-reversal of Industrial Revolution Plan

Manufacturers have urged Nigeria’s incoming president, Muhammadu Buhari, not to reverse the National Industrial Revolution Plan (NIRP) initiated by the outgoing president, Goodluck Jonathan.

According to those who spoke with BusinessDay, reversal of such well-scripted plan would not only draw the country back but could mar the chances of stimulating the productive sector.

They say the NIRP has creative content that could steer the industrial sector, while urging for honest implementation of the plan.

“New governments often relegate plans of their predecessors to the background,” Tunde Oyelola, chairman, Manufacturers Association of Nigeria Export Group, told Real Sector Watch in a telephone chat.

“But such is often counter-productive. NIRP is a good plan that needs to be religiously implemented. I urge Muhammadu Buhari not to consider reversal of this and many other programmes of Goodluck Jonathan,” Oyelola said.

He said new governments should not be in a rush to set aside the programmes of their predecessors, saying that continuity was good in economic management.

NIRP was launched in February 2014, with a view to diversifying the Nigerian economy away from oil. It was a comprehensive plan targeted at stimulating the industrial sector, comprising manufacturing, agriculture value chain, solid minerals, metals, iron and steel, among others.

“Buhari must look closely at developing the solid minerals sector to help companies in the non-metallic products sector such as cement, glass and ceramics,” a CEO of a glass making firm, who preferred not to be named, told Real Sector Watch.

According to the CEO, the incoming government should also look closely at the quality and availability of raw materials in order to reduce heavy importation of inputs.

Nigeria’s manufacturers battle with a number of issues that make them less competitive at both local and international markets.

High energy spend, rising cost of funds, transportation bottlenecks, insecurity, sourcing of raw materials, market and multiplicity of taxes are some of the issues facing local manufacturers, which the Buhari administration is expected to tackle to diversify the economy.

“From the interaction with members from the field survey conducted for the reviewed period, most credit facilities obtained by manufacturers range around 17 percent 24 percent,” says Manufacturers Association of Nigeria, in its January to June 2014 Economic Review, while underscoring high cost of funds.

The manufacturing sector also needs the solid minerals for support. Cement makers already source over 90 percent of limestone and gypsum locally. But the issue of quality sometimes suffices, prompting some players to seek materials from abroad, Real Sector Watch can confirm.

Also, the ceramics industry in the country is still weak as bricks, pipes, floor and roof tiles, table wares, pottery products, sanitary wares and wall tiles are often imported.

This is also because kaolin, feldspar, silicon, clay and quartz, among others, are poorly mined owing to lack of investment, funding and constitutional issues, which could mar Nigeria’s industrial dream.

“What you find in the sector is that it is too centralised in such a way that a miner in Edo State will have to travel to Abuja to obtain licences,” said Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry.

“This means the issuance of mining rights needs to be decentralised so that states too can issue licences,” Yusuf said.

The industry is capital-intensive and requires heavy financing that will enable stakeholders cater for huge logistics costs involved in the sector, he further said.

ODINAKA ANUDU