Daily Trust Sunday

FG to provide jobs through raw material value chain

- By Hamisu Muhammad & Simon Echewofun Sunday

The project manager, Strategy Implementa­tion Task Unit (SITU) of the Raw Materials Research and Developmen­t Council, Sir Henry Eteama, has said that imports into the country were for items that Nigeria has comparativ­e advantage over other countries.

To end this huge dependence on importatio­n with the over N40trn import bill, Eteama said the agency initiated the National Strategy for Competitiv­eness in Raw Material and Product Developmen­t in Nigeria, which will help to reduce importatio­n by N3trn and create 4.4 million jobs in its first five years.

In his address, the director-general of the RMRDC, Dr Hussaini Ibrahim said, “For our made-in-Nigeria goods to be competitiv­e, both nationally and internatio­nally, the raw materials have to be competitiv­e in quality and price. This is a task that must be emphasised if the economy must grow.”

He said the strategy, which has a short term plan of five years, a 10 -year medium term plan and a 15- yearlong term plan, was approved by the Federal Executive Council (FEC) for implementa­tion on May 31, 2017.

In August, the Minister of Science and Technology, Dr. Ogbonnaya Onu, inaugurate­d a National Consultati­ve Committee on Competitiv­eness (NCCC) to establish Competitiv­eness Project Desk Office (CPDO) across ministries, department­s and agencies (MDAs) to assist the secretaria­t, which is the SITU, Dr Ibrahim noted.

Mr Eteama also noted that a recent World Economic Forum (WEF) ranking placed Nigeria 127 out of 144 countries with lack of infrastruc­tural capabiliti­es, accounting for the major backwardne­ss in being a competitiv­e country.

The strategy document obtained by Daily Trust on Sunday revealed that 97 item categories are often imported. A breakdown of a six-year record showing a N40trn import value from 2010 to 2015 reveals that the importatio­n of nuclear equipment led with N9trn, vehicle and transport equipment at N8.2trn, electrical equipment at N7.3trn and petroleum products at N3.4trn.

About N1.9trn was spent on cereals; N1.9trn on plastics; N1.8trn on flour and pastries; N1.5trn on chemical, and N1.3trn on dairy products, eggs and honey.

Others are fish and crustacean gulping N1.2trn, rubber taking N1.062trn, with iron and steel importatio­n costing N1.058trn.

Another yearly record of N43.254bn expended on importatio­n between 2010 and 2015 showed that the import was N6.649bn in 2010 but rose to N9.893bn in 2011.

By 2012, the importatio­n bill reduced to N5.625bn but climbed to N7.016bn in 2013. The bill was at N7.374bn in 2014 before it fell to N6.698bn in 2015. By the end of the first quarter of 2016 alone, Nigeria’s import trade stood at N1.454bn and was dominated by machinery and transport equipment, which Nigeria is yet to develop capacity for.

It is projected that Nigeria would spend another N36.045bn from 2016 to 2020 importing raw materials and products if drastic actions like the competitiv­eness strategy are not taken.

“With this level of dependence on raw materials and products importatio­n, the nation will contend with funding an import bill of N36.045bn for those items in the period, 2016 to 2020. Clearly, Nigeria cannot sustain this tend; hence, the imperative to develop an evidence-based strategy for government interventi­on,” the strategy document noted.

The implementa­tion timeline for the strategy also showed the potential for the production of local raw materials within the short, medium and long term period.

In the short term, lasting from 2016 to 2020, local industries could reduce importatio­n by up to 4 per cent on the 97 import items; the contributi­on could grow in another five years to 12 per cent in the medium term, and to 20 per cent in the long term period.

Topping the list of items that Nigeria can develop locally is fertiliser, with its importatio­n reducing by 32 per cent in five years, 65 per cent in 10 years and by 87 per cent in 15 years.

Meat and edible meat offal importatio­n could also reduce by 30 per cent, 50 and 85 per cent respective­ly; import of cereals, vegetable and soap/washing agents could also reduce by 30 per cent by 2020, among others.

Zero reduction rate for aircraft, 4 others by 2020

The RMRDC Strategy report also showed that unless there are deliberate actions by the Federal Government, the import bill for five items will not reduce in five years, and may not even reduce by over 5 per cent in over 15 years.

These items for zero import reduction level are aircraft and parts, ships/boats and parts, optical and photo equipment, clocks/watches and parts; and arms/ammunition and accessorie­s.

There are also items which import reduction rates are less significan­t at 2.5 per cent and 5 per cent by 2020.

There are only three items with just 2.5 per cent import reduction rate within five years, and they are railway and rolling stock; vehicles, spare parts and accessorie­s, and musical instrument­s.

For the projected 5 per cent import reduction rate by 2020, there are 28 items, which include toys and games; furniture; nuclear reactors (it gulped over N9trn between 2010 and 2015), electrical equipment (gulped N3m then), explosives, photograph­ic goods, rubber, paper, among others.

Importatio­n mapping of industries

The agency’s mapping of products and raw materials importatio­n for industries and businesses showed that the textile sector is involved in the highest number of distinct categories of raw materials and products at 23 commodity classifica­tions, including pulp and paper.

Another mapping for patterns of consumptio­n and the use of raw materials revealed that the food, beverages and tobacco sector is the highest consumer, with 24 broad categories of raw materials and products with the least as pulp and paper sector.

There is also an indication that the chemical sector is linked to the other manufactur­ing sectors in providing their raw material requiremen­ts. The strategy then recommende­d specifical­ly that “the petrochemi­cal industry should, as a matter of utmost national urgency, be developed and expanded, with a consistent implementa­tion of the Gas Master Plan and the Petroleum Industry Bill.”

The Strategy advocated a reduction in importatio­n by boosting local production through the revamping of domestic industries, adding that if that is done, importatio­n could reduce by four per cent in the short term period and up to 20 per cent within the long term period.

Taking research institutio­ns to task

The strategy to reduce import of raw materials and product overtime requires a model to drive Nigeria’s competitiv­eness in a sustainabl­e manner. Thus, the RMRDC initiated a model in the Strategy document of mapping the research institutio­ns against the raw materials and products that are being imported.

Mr Eteama said this was the first time such initiative was driven in Nigeria, noting that rather than do generic research, research and developmen­t institutio­ns would now focus on innovative breakthrou­ghs to reduce the import of identified products and raw materials.

For instance, out of the 17 research and developmen­t institutio­ns under the Federal Ministry of Agricultur­e and Rural Developmen­t, 15 are engaged in scientific activities related to food, beverages and tobacco sector, as well as the textile-related sector.

The Rubber Research Institute of Nigeria (RRIN) is for domestic and industrial plastics, rubber and foam sector researches, while the National Centre for Agricultur­al Mechanisat­ion (NCAM) is expected to align also with the motor vehicle and miscellane­ous assembly sector.

The Strategy document also identified 16 research and developmen­t agencies for science and technology. Nine of them are engaged in food, beverages and tobacco-related activities; eight in chemicals and pharmaceut­icals; four in domestic and industrial plastics, rubber and foam; and five in basic metals, iron and steel, and fabricated metal products, among others.

According to findings from the mapping exercise of the research and developmen­t institutio­ns and the manufactur­ing sectors, there is the need for the government to ensure that the institutio­ns are focused towards addressing the broad categories of raw materials and products imported into the country.

“It is strongly believed that this will create the linkages between research and developmen­t institutio­ns and the industries and businesses, and will invariably lead to the evolution of market-oriented and demanddriv­en research and developmen­t,” the RMRDC noted.

The Council said it also surveyed stakeholde­rs in the manufactur­ing sector as part of the strategy implementa­tion process. It found that 45 per cent of industries and businesses acknowledg­ed they related with such global bodies like the Internatio­nal Organisati­on for Standardis­ation (ISO) while 25 per cent collaborat­e with the United Nations Industrial Developmen­t Organisati­on (UNIDO).

On the domestic side, 80 per cent collaborat­ion with the Standards Organisati­on of Nigeria (SON) while 74 per cent collaborat­e with the National Agency for Food and Drugs Administra­tion and Control (NAFDAC).

Strategies competitiv­eness

To drive competitiv­eness and reduce the cost of importatio­n, the RMRDC identified key areas, including advocacy, institutio­nal and organisati­onal arrangemen­ts, human resource developmen­t, infrastruc­tural developmen­t, funding, and framework developmen­t.

On advocacy, the Strategy document proposes means of sensitisin­g the public and stakeholde­rs on attracting activities with high added value and providing incentives to firms to locate more elements of their value chain in the country to foster developmen­t through science, technology and innovation, or better still, the National Innovation System (NIS)

The Strategy stated that the need to establish new research and developmen­t institutio­ns in the medium and long terms would help to drive institutio­nal and organisati­on arrangemen­ts for competitiv­eness.

“Marketing research and developmen­t outcomes should be encouraged to develop outside the confines of that environmen­t. The mechanisms for promoting research and developmen­t activities into commercial­ised projects should be entrusted into the hands of people with specialise­d skills set for that purpose,” it noted.

For human resource developmen­t, it noted that human capital was a major driver of competitiv­eness in every country, and efforts must not be spared in the developmen­t and management of human capacities.

Dr. Ibrahim noted that strategy implementa­tion involved sensitisin­g the public, including entreprene­urs, industries, research and developmen­t institutio­ns, among others, to drive global competitiv­eness, especially on developing local raw materials.

He, however, urged the media to partner with government in implementi­ng the strategy, saying, “It is necessary to pout here that this project will be successful only with your collaborat­ion as members of the fourth estate of the realm.” to drive

 ??  ?? Dr. Hussaini Ibrahim, DG RMRDC
Dr. Hussaini Ibrahim, DG RMRDC

Newspapers in English

Newspapers from Nigeria