60 manufacturing sub-sectors suffer as FG fails to plan

Despite governnment’s avowed commitment to diversifying the Nigerian economy, 60 manufacturing subsectors are bleeding as a result of  the absence of clear plans to rejuvenate them.

Some of these 60 subsectors that have no clear-cut policy directives, include pharmaceuticals, paper and pulp, paint and varnishes, flour/wheat, ceramics, biscuits and bakery products, vegetables and palm oil, cocoa/chocolates, textiles, and leather/footwear.

Others are foam, glass, soap and detergents, fertilisers/pesticides, carpets and rugs, cables and wires, furniture, steel, tricycle assembly, domestic and industrial plastics, rubber, packaging, cordage, rope and twine, fabrication and hydrologicals, among others.    

The immediate past administration paid particular attention to the cement, sugar and automotive subsectors, but this also meant that other industries suffered. The present administration, which focuses on economic diversification through the real sector, has so far concentrated on a broad-based approach to manufacturing, having failed to clearly articulate specific policies that will enable  each of these industries to thrive, say analysts.   

Tunde Oyelola, chairman, Manufacturers Association of Nigeria Export Group, told BusinessDay that each government often supports priority subsectors that tally with its vision.

“One key disadvantage of selecting sectors to support is that if you support the automotive industry and neglect flour, there comes a time you find cars everywhere but look for bread and noodles to eat,” Oyelola said.

“However, let me add that every government creates an environment for the subsectors it wants to develop. If a government wants job creation, it often backs high-job subsectors,” he said. 

Oyelola further said government also looks at each region and tries to drive industries that deal in the resources there, adding that Buhari will likely support export-led companies more.

The current situation in the manufacturing sector shows that private individuals and firms are taking their destinies in their own hands, as government shows lack of support and understanding of different subsectors.

Manufacturers of noodles, pasta and biscuits cannot get high-quality local wheat as they rely mainly on imports from the USA. Local wheat production is still less than five percent, combining with foreign exchange scarcity to make flour milling business in Africa’s biggest economy unattractive.

Nigeria’s flagship export product, cocoa, is fast losing its traction in the global market, on account of the increased number of un-replaced old and worn-out trees in the country, which has cut supply.

“The country is no longer getting full economic benefits from growing cocoa because most cocoa fields are old and small, added to the poor genetic qualities of the planting materials used,” Daniel Adewale, former crop scientist at the Cocoa Research Institute of Nigeria (CRIN), said.

Paint makers are overburdened by lack of oil firms’ compliance on the Local Content Law, poor patronage and debts, just as government shows no interest in developing ceramics that  can help in the utilisation of locally available feldspar, tin, kaolin, iron, silica and quartz and stop the importation of  ceramics bricks, pipes, floor and roof tiles; table wares, pottery products, sanitary wares, wall tiles and earthenware.

“We lack a clear policy to revive this sector that can employ millions of Nigerians,” said Patrick Oaikhinan, CEO of Epina Technologies and professor of ceramics engineering.

Currently, the few surviving textile and rug makers are having a tough time, as smuggling, which was a big challenge in the past, continues into the present.

Murali Menon, country head at Spintex, a surviving textile maker in the country, said the firm would have ranked among textile and cotton exporters had  smuggling, high gas prices, and foreign exchange crisis not been hitting it hard.

Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), told BusinessDay that every government will need to deal with issues of manufacturing holistically and specifically.

“There are many broad challenges the manufacturing sector has.  They talk about power; they talk  of transportation to get their goods and raw materials to market. You look at the problem at the ports, high cost of funds, short tenor of funds, among others.

“You also talk of sector-specific challenges such as lack of patronage, and local content. But the point is that broad-based plans have not been working. They have not been able to tackle basic problems. That is why the sector-specific policies do not always seem to be working.  But once you get the environment right, the subsectors will all fare better,” Yusuf said.

ODINAKA ANUDU