Nigerian manufacturers are paying between two and ten times more than competitors in Vietnam and China for power, credit and logistics, a gap that is hollowing out the country’s industrial base even as demand for its products holds firm, Kamar Bakrin, executive secretary of the National Sugar Development Council (NSDC), has said.
According to Bakrin, “None of this is a demand problem. Nobody on this continent needs persuading to buy what Nigeria makes.”
“It is a cost-of-production problem, and that distinction matters because costs, unlike demand, are within our power to fix,” he added.
Nigerian Manufacturers spent an estimated N1.34 trillion last year just keeping their own lights on, according to findings by BusinessDay.
“Every factory in Nigeria is running a second, unwanted business as a private power station,” Bakrin said in a statement.
“Working capital costs Nigerian manufacturers 27 to 35 percent, against about 9 percent in Vietnam and 3 percent in China. Logistics tell the same story: Nigeria sits 88th out of 139 countries on the World Bank’s Logistics Performance Index, well behind Vietnam at 43rd and China at 19th.
“Manufacturing’s share of GDP has been stuck near 8 percent, and capacity utilisation has slipped to 57.7 percent”, the statement said.
Bakrin noted that inflation has roughly halved from its peak, and reserves have climbed to $51 billion, the highest since 2009, giving factories room to plan for the first time in years.
Meanwhile, global manufacturers are relocating supply chains, and “a factory anchored in another country this decade will not move twice.”
The African Continental Free Trade Area sharpens the stakes further: “Either our goods are crossing borders going out, or everyone else’s goods are crossing ours coming in. We are either going to compete, or we are going to concede the market.”
He pointed to fertiliser as proof the model can work. Urea production capacity grew from 500,000 tonnes in 2005 to 6.5 million tonnes after natural gas was priced as an industrial input rather than treated purely as a revenue stream, helping make Nigeria one of the world’s top ten nitrogen fertiliser exporters.
“When a country prices inputs as if it wants industry to live, industry lives,” he said.
Bakrin set four benchmarks of round-the-clock industrial power at 8 to 10 cents per kilowatt-hour, single-digit lending at meaningful scale, port clearance under seven days, down from 18 to 21 currently, and doubled output per worker by 2030.
“These are not aspirations to admire. They are the line at which a made-in-Nigeria product stops apologising,” he said.
He also proposed four resolutions for adoption: dedicated power arrangements in at least one industrial cluster per state within 12 months; a federal-state compact to harmonise levies and clear informal checkpoints; a public State Industrial Competitiveness Index ranking states on power, land, levies and logistics; and enforced “Nigeria First” procurement with quarterly compliance dashboards.
“Every resolution needs a named owner, a date and a way to measure it,” he said. “Otherwise, it becomes another document that gets filed, framed and forgotten.”
Underlying all of it, Bakrin said, should be one rule: government support must be earned continuously, not granted as a birthright. “Nothing should be handed out as an entitlement, because once it is, it can never be taken back.”
He urged state governments to use the Electricity Act 2023 to build competitive power markets, ease access to industrial land, simplify levies and align technical training with factory needs, steps he said would create jobs, strengthen the naira through import substitution and exports, and slow emigration.
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