The Manufacturing Association and various other stakeholders have called for a new industrial policy in Nigeria. The latest report by the Manufacturers Association of Nigeria’s CEO Confidence Index highlighted that despite government efforts to boost the sector, the Export of manufactured goods only made up 1.4 percent of the country’s 2024 first-quarter total exports. This indicates that the current strategies have not been successful in creating a mutually beneficial situation for all parties involved.
According to Professor Olusegun Ajibola from Babcock University, the sentiment of the MAN was echoed in his belief that Nigeria requires a fresh industrial strategy to pinpoint its economic direction. Ajibola noted that historical governmental strategies to enhance the manufacturing industry were unsuccessful due to excessive dependence on foreign products and the exorbitant expenses associated with production within the nation. He stated that previous administrations implemented measures to support Nigeria’s manufacturing sector, but their effectiveness has been lacking.
Reliance on petrodollars had caused neglect of the real sector.
A complete and comprehensive transformation is the only way to revive the sector. Ajibola, who previously held the position of president at the Chartered Institute of Bankers of Nigeria, expressed concern that the government’s emphasis on petrodollars had caused neglect of the real sector. During the first quarter of 2024, Nigerian manufactured goods exports reached ₦268 billion as per the latest foreign Trade data from the Nigerian Bureau of Statistics. This value was surpassed only by crude oil exports at ₦15.4 trillion, other oil product exports at ₦1.9 trillion, and agricultural goods at ₦1 trillion.
Also, in Q4 2023, there was a significant increase in total exports, jumping by 51% to ₦19.17tn from ₦12.69tn. This rise was 195.47% higher than the ₦6.49tn recorded in Q1 2023. In the NBS report, it was noted that the nation had a trade balance of ₦6.52tn from January to March 2024. The total merchandise trade during this period was ₦31.8tn, showing a significant increase of 46.27% from the previous quarter and 145.58% from the same quarter in the previous year.
Reviving the 4th National Development Plan is important.
In the time frame being analysed, there was a significant surge in imports by 39.65%, totalling ₦12.64tn compared to ₦9.05tn in the fourth quarter of the previous year. David Adonri, the Vice President of Highcap Securities Limited, suggested reviving the 4th National Development Plan introduced by former Nigerian Head of State, Yakubu Gowon, to boost the local manufacturing sector. Adonri emphasised that Nigeria’s insufficient heavy industrial Infrastructure hinders the competitiveness of domestically produced goods, especially in light industries.
Furthermore, the vice president of Highcap Securities expressed concerns over how the plan initiated by Gowon was cut short by successive administrations. The 4th National Development Plan aims to establish a strong industrial foundation using local resources for self-sufficiency and exports. President Bola Tinubu has reiterated his commitment to supporting Nigerian manufacturers during the inauguration of a tomato-processing plant in Gafara, Kebbi State. He emphasised the importance of exporting more and importing less to boost the Economy and improve the standard of living.
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It is imperative to revive the industry in Nigeria in order to drive economic progress and advancement in the nation. The significant disparity in exports of manufactured goods versus commodities such as crude oil. This underscores the urgency for a renewed industrial strategy to enhance the global appeal and competitiveness of products made in Nigeria. Stakeholders and experts must push for change in the industry to overcome obstacles hindering its progress. Nigeria has the opportunity to generate employment, decrease reliance on imported products, and enhance its trade balance through the revitalization of the sector.
