Tasks before Nigeria Industrial and Competitiveness Council
Nigeria’s vice-president Yemi Osinbajo last Tuesday inaugurated the Nigeria Industrial Policy and Competitiveness Advisory Council. The council was charged with the responsibility of spearheading the industrial agenda in order to boost the contribution of manufacturing to the Gross Domestic Product (GDP) by 250 per cent over a five-year period.
It is made up of manufacturers and policy makers drawn from public and private sectors.
As the group itches to resume sitting, Real Sector Watch has articulated some of the major issues affecting Nigeria’s industrial sector upon which the council will be assessed.
State of Emergency/ Industrial Strategy
First, the council must declare a state of emergency on the manufacturing sector, with special focus on wobbly sub-sectors such as textile, cosmetics, paint, ceramics, pharmaceuticals, chemicals, iron and steel, among others.
This also includes determining appropriate tariffs for imported products relating to these industries. Part of Nigeria’s problem is that there is no industrial strategy that defines whether the country is import-substitution or export expansion oriented.
This informs why successive governments, including the current government, have had no appropriate and consistent strategy for importation and competition.
A closer look at India’s experience in textiles and Ethiopia’s escapades in shoe-making shows that countries which adopted or adopt export-oriented industrialisation often have an edge over those with import-substitution tactics.
When companies produce for other markets, they tend to better their quality, which in turn improves the well-being of local consumers. They earn foreign exchange and achieve technology transfer easier, say economists.
Struggling Textile Industry
There are merely three struggling textile firms in Nigeria, whereas Indian has above 400 that are alive and kicking.
“What we need is the enabling environment. We cannot compete with the level of smuggling and counterfeiting going on now. We used to have about 127 textile firms in Nigeria but that has come down to two or three now,” said Grace Adereti, president of the Nigerian Textile Manufacturers Association (NTMA) in Lagos at a Made-in-Nigeria stakeholders’ meeting in Lagos.
“We had the revival loans but this didn’t work because our biggest problem has never been money,” Adereti said.
It is expected that Adamu Atta, chairman, United Textiles Plc, who is a member of this council, will champion the cause of this industry.
Revival of Moribund/ Struggling Industries
Second to this is the revival of moribund industries. Policy flip-flops led to the shut-down of many industries, ranging from over 100 textile firms to palm oil plants and a host of others.
What is preventing Vita Malt at Agbara, Ogun State, from returning to production? Why is the federal government still dilly-dallying on Ajaokuta Steel Complex? Why is still Ebonyi salt plants at Ikwo, Uburu and Okposi abandoned despite large chunk of money sunk into them by Japan between 2008 and 2010? These are questions expected to agitate the minds of council members.
“Moribund companies need to be revived and bought over, if possible. I hope the council will be selfless enough to carry out their roles. The key word here is ‘selfless’,” said a manufacturer who preferred anonymity.
Where is Backward Integration?
Next on the list is an examination of Nigeria’s backward integration projects. Some of the projects stopped few months ago due to currency risk and are yet to restart. Again, some manufacturers told this newspaper that they were yet to get concrete support from the government in the form of FX support, unlike the previous administration that made backward integration a key focus.
If the present government had pursued BIP the way the previous administration had done, the impact of FX crisis would have been less on manufacturers, say analysts.
“It is important to pursue BIP frontally this time because we don’t need to rely on imported inputs when we have many of them here. This is why we want to have an appropriate strategy for BIP,” said Ikechukwu Ibeabuchi, MD of Klopp Water Cure, a water treatment chemical.
Power slump
Power outage is a critical challenge of the industrial sector and manufacturers who spoke with Real Sector Watch wanted Babatunde Fashola, minister of power, work and housing, who is also a member of the group, to lend more support to the Power Development Company set up by the Manufacturers Association of Nigeria (MAN), in order to free power to industrial clusters in the country.
ODINAKA ANUDU