The ups and downs
The story of Nigeria’s manufacturing sector in the last four decades was a history of ups and downs. Prior to the oil boom of the 1970’s, manufacturing sector contributed nearly 10 per cent of the nation’s economic output and was second only to agriculture as mainstay of the economy. With the advent of crude oil, impact of the sector on the economy has been on the decline despite the numerous policy measures that have been articulated by successive governments.
Manufacturing sector consists of mainly the Food, Beverage and Tobacco, Textile, Apparel, & Footwear, Wood and Wood Product, Pulp, Paper & Publishing, Chemical & Pharmaceuticals, NonMetallic Product, Domestic/ Industrial Plastic & Rubber, Electrical & Electronics, Basic Metal, Iron & Steel and Motor Vehicle & Miscellaneous Assembly.
The contribution of manufacturing sector to GDP over the last decades stood at a yearly average of 4 per cent [4.32 per cent in 1998, 3.68 per cent in 2004, 3.91 per cent in 2006, 4.03 per cent in 2007, 4.14 per cent 2008 and 4.19 per cent in 2009] as against the emerging economies which have an average of 46 per cent manufacturing share of GDP. Despite its huge potentials to create wealth and generate employment, the manufacturing sector in Nigeria has not met its target of 18 per cent contribution to GDP as projected by the federal government in the National Economic Empowerment and Development Strategy [NEEDS] document. Performance of NEEDS showed that the GDP growth rate, which was 3.3 per cent in 1999, was an average of 6.0 per cent during 2004–7, with oil and non-oil sectors having GDP growth rates of 0 per cent and 8.3 per cent respectively. The external reserve rose from $4 billion in 1999 to $43 billion in 2007. There was an average inflation rate of 9.5 per cent.
Between 2011 and 2012, the primary sector, in particular the oil and gas sector, dominated GDP, accounting for over 95 per cent of export earnings and about 85 per cent of government revenue. The industrial sector accounts for 6 per cent of economic activity, while in 2011 the manufacturing sector contributed only 4 per cent to GDP. The economic transformation agenda, otherwise known as Nigeria Vision 20:2020 set out the direction for current industrial policy in Nigeria with aims of achieving greater global competitiveness in the production of processed and manufactured goods by linking industrial activity with primary sector, domestic and foreign trade and service activity.
Unfortunately, the then acting executive director and chief executive of Nigerian Export Promotion Council (NERC), Abdullahi Sidi-Aliyu believes that the NEEDS strategy has not done enough. He said despite its adoption in 2003, it is regrettable that after nearly two decades, there has not been any perceptible improvement in the nation’s economic malaise as oil still contributed 91.9 per cent of total export earnings and 76.5 per cent of total government revenue in 2016. Sidi-Aliyu added, “Characterised by low output growth, high unemployment rate and rising inflation, the Nigerian economy has continued to perform below its potentials, especially in recent years. The economy remains extremely vulnerable to external shocks, particularly the vicissitude of world oil market.
On his part, General, Lagos Director Chamber of Commerce and Industry Muda Yusuf said the excellent document with very rich content for the transformation of the Nigerian economy has not in a reality, achieved the lofty goals. The manufacturing sector is still as weak today as it was in 1999, when the document was put together.
But President, Manufacturers Association of Nigeria (MAN) Frank Udemba Jacobs said the sector had made significant positive headways within the period 1998 to 2018. However, this progress appears to oscillate due to macroeconomic exigencies and policy changes by the government at that time.
He said the sector witnessed significant improvement within the period following the backward integration policy of the government. With this policy, cement production increased tremendously from about 2,000 metric tons in 2000AD to about 28 to 33 million metric tons annually, thus shifting the country from being an importer to net exporter of cement. Similarly, he said success was recorded in tomato production. Fresh tomato production increased to 6 million metric tons per annum as against an average of 150,000 metric tons hitherto imported.