VII LCCI DG: Reduce industrial sector’s import dependence

What is your assessment of the nation’s manufacturing sector between 1998 and 2018?

The Nigerian manufacturing sector has been on the decline over the past two decades. This is despite the numerous policy measures that have been articulated by successive governments. Manufacturing’s contribution to GDP remains at an average of 6 per cent over this period. The sector has, over the years, remained largely import dependent, making it very vulnerable to external shocks.

This feature is also a factor in the sector’s weak competitiveness. Many manufacturing firms have low local value addition, weak backward integration, poor forward integration and very low job creation potentials. All of these weaken the impact of the sector on the economy and the development process.

There has been a disproportionate emphasis on protectionist policies to the utter neglect of strategies to ensure competitiveness.

What impacts have various policy measures had on the sector?

If there is anything that we are not short of in this country, it is the crafting of very good policy documents to provide direction for the economy. Many of these documents have very robust sections for industrialization strategy.

However, these laudable policies have not really translated into concrete action or sustainable industrial growth. Since 1998 a few major policy documents have been released by the government. First, the National Economic Empowerment and Development Strategy (NEEDS) document, which was put in place during the regime of President Obasanjo.

The major thrust of this policy document to radically increase local value addition at every stage of the manufacturing chain, reduce the export of primary products and encourage local processing of such products, promote total factor productivity, promote backward and forward linkages in some niche sectors as well as develop appropriate science and engineering infrastructure that will support industrial development.

The target for the industrial sector under this policy was to achieve 7 per cent annual growth in manufacturing and increase capacity utilization to