Despite the prospects of having abundant raw materials, Nigeria loses billions naira annually shying away from fully utilising the raw materials in its possession. While focusing on the proceeds got from exporting raw materials, billions of dollars are overlooked from bypassing value addition to these products.
A report released by Nigerian Export-Import Bank (NEXIM), using cocoa as a case study, shows that Africa accounts for over 70 percent of the global cocoa production with Nigeria as one of its key producers. The global value of raw cocoa export is $10 billion while the total value of all finished goods from cocoa annually is $200 billion with chocolates alone having $100 billion.
This shows that Africa accounts for 73 percent of global production but enjoys less than 5 percent of the wealth in the value chain.
Ogbonnaya Onu, former minister of science and technology, posits that the Nigerian leather industry could be worth about $900 million in export in the coming years, provided that further action is taken and value addition is intertwined with the export process.
According to Bello Yakasi, a Kano-based leather dealer, Nigeria’s leather export value is between $600 million and $800 million annually, and with value addition, much more could be realised from leather products, as it is possible to get $150 billion leather footwear alone.
Mansur Ahmed, president, Manufacturers Association of Nigeria (MAN) also said, “Value addition is the key to success in manufacturing,” transforming raw materials into finished goods for the market would grow the economy.
“For instance, you produce cocoa, turn it into cocoa butter and you export it. What you get from that cocoa butter, they convert into chocolates and for the same quantity of cocoa butter, the manufacturers of chocolate will make more profit a thousand times more than you do,” Ahmed said.
Experts are of the opinion that including value additions to exports in the country will contribute to the country’s economic development and GDP, it will generate more income and also provide jobs, thereby reducing the high unemployment rate.
Incorporating value addition to the country’s exports will require some basic utilities, especially infrastructure. In view of this, the president of MAN said infrastructure was one of the main components of a successful manufacturing sector, therefore, major investments should be made in infrastructure.
There is need to be updated with global trends, especially in the technological and digital aspects, he said.
Tayo Omidiji, head, Strategic Planning at Nigerian Export-Import Bank, advised that there was a need to improve competitiveness by bridging the infrastructure gap, increase funding for research and development to aid innovation and development of intellectual property, and also improve the economic environment to attract investors.
Some experts also advise that there should be collaborations between government agencies, investors and industries to enhance productivity and innovations in the manufacturing space.
