FG to provide jobs through raw material value chain
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