Nigeria’s industrialisation can be sustainable only if the country undergoes the various stages of development, says Yemi Kale, statistician general of the federation and CEO of National Bureau of Statistics (NBS).
Speaking at the 2016 Standard Bank West Africa Investors conference, Kale said countries transform from the agricultural stage to an industrial stage and end up in the service stage; regrettably, Nigeria took a different path and went from agriculture to services, ignoring the industrial stage.
The implication, he said, is that the transition from an import dependent economy to an export oriented one will require the industries to function efficiently.
“Do we ban goods we can’t produce or encourage the companies that produce those commodities to come and set up in the country?” Kale asked rhetorically.
Ignoring the industrial stage over the years has resulted in the huge industry deficit, according to Kale. However, he is convinced that foreign investors can offer a helping hand to the government in bridging it considerably by partnering the latter in the huge capital projects to be embarked on in 2016.
This further explains the impracticability of import substitution in the country at a time where the imported items are not produced locally.
Ogho Okiti, CEO, Time Economics, took a stand, saying, “There are virtually no alternatives to some of the products we import, especially machinery and industrial goods.”
Following the harsh economic realities Nigeria is faced with, the Federal Government should therefore relax its economic policies to encourage foreign investments.
The statistician general took a swipe at some of the monetary policy measures, saying, for instance, rather than impose policies that hinder foreign investment, the Federal Government should relax tough restrictions on foreign exchange to encourage foreign investors to set up industries in Nigeria.
Consequently, he said government’s stand on the exchange rate had translated to bearish investors who were uncertain of the rate policy regime.
“Investors do not like heightened uncertainty because it confronts them with questions that they cannot answer and successfully explain,” Atedo Peterside, chairman, Stanbic IBTC, said.
As a result, the investment that ought to suffice for the deficit in industries, which portends an increase in local production, has been hampered considerably.
Bridging the industry deficit is pertinent in the clamour for economic diversification, Peterside opined, because the industries ought to be resuscitated if production rate is to soar above local demand to compete globally.
The NBS boss revealed further that agriculture, which used to contribute about 35 percent to GDP, had suffered a decline by 13 percent and industries are not exempt from this decline.
However, services have increased significantly from 39 percent to over 50 percent. According to him, this shows how the service industry has grown prematurely, while the industries have had stunted growth.
