Notes on an industrial policy for Nigeria

By Dr Kenny Uzoma Acholonu from the book Acholonu (2024) Who Will Give You The Technology: Science-Based Innovation and Manufacturing in Nigeria

Knowledge capital powers industries of the 21st century in all areas of productive human endeavours. Knowledge capital, also called intellectual capital, springs from universities and research institutes daily, monthly, and yearly.

Industries in all areas of human endeavour capture the university knowledge and translate it into valuable products and services.

Consequently, these industries create high-wage jobs. The accumulation of sectors around the knowledge environment is the beginning of the creation of research and development industries on the foundation of science, technology and innovation breakthroughs.

Nigeria currently has nearly 50 federal ministries, 200 research institutes, and about 350 agencies. In this vast bureaucracy, functions often collide, dissipating focused energy.

The lack of funds makes life even more miserable for otherwise precious knowledge capital embedded in the universities and the research institutes.

The collaboration that creates high synergistic value among all federal agencies must be present. Consequently, the procurement mentality pervades all national ministries, agencies and research institutes.

Indigenous knowledge capital is thus absent in the Nigerian industry. We need a more transparent state of affairs to drive the nation with coherent, focused, and straightforward policies that target three or four key priorities that can uplift the country.

Read also: Nigeria needs futuristic industrial policy for sustainable growth

At present, the key indices of modern economic development are well-known and published both nationally and globally. They are:

• GNP per capita.
• Population Growth.
• Occupational Structure of the Labor Force.
• Urbanisation.
• Consumption per capita.
• Infrastructure.
• Social Conditions. Literacy rate. Life expectancy.
• Health care. Caloric intake. Infant mortality.
• Other.

As intangible as it may sound, one of the critical measures of economic development today is the number of patent applications a country has and the number published annually. Also, the number of scientific and engineering papers published globally by any nation is a measure of economic productivity. China has now surpassed the United States in science and engineering publications annually.

By 1980, China was far from the United States. Furthermore, even in our knowledge of history, many might not be aware of why the British established FIIRO. The story of FIIRO goes a long way to suggest that the British were informed that the pathway to industrial development was through a research institute. Why do we forget so fast and lose track, believing we can industrialise without research institutes? Why do we dismiss some ideas as “academic” when nations understand the link between these academic ideas and industrial production?

There is a causal and robust link between knowledge capital and economic development.

Unfortunately, our trajectory for growth since 1960 did not consider the critical importance of R&D for governments, the public sector in general, and the private industries.

Another intangible measure is the number of doctorate holders in the sciences and engineering in any workforce in a nation. Nigeria must find a way to refocus all her energies on the research and development trajectory.

The way to do it is a national commitment to public spending on research and development of not less than 0.3 per cent, and for the private sector of not less than 0.5 per cent of their revenues on R&D. It would amount to a total R&D spending of 0.8 per cent for the nation.

The separation between public and private sector spending on R&D is the hidden secret that catapulted the United States to the height of its economic development power between 1950 and 1965. The US government even supported private-sector R&D in the case of IBM, Bell Laboratories and others.

Having recognised this, the AU in 2007 gave Africa a policy thrust on science, tech and innovation in the Addis Ababa Charter. They stipulated that all African nations must put one per cent of their GDP on science, technology and engineering R&D. Up till today, only Malawi and Namibia have achieved up to 0.4 per cent of their GDP on R&D. Incidentally, SA was doing one per cent of GDP before 1994. Due to the challenges of integration post-apartheid, they now do 0.6 per cent.

What Must Happen?
1) The upgrading and deepening of the knowledge base available at the Ministry of Science and Technology. Many countries now call them the Ministry of Science, Technology and Economic Development.

2) Identifying, promoting, and rewarding highly knowledgeable individuals who work for companies or universities is a critical success factor for a robust industrial policy.

3) The provision of land around the knowledge centres for specific industries such as Semiconductors, Chemical, Molecular biology, Pharmaceutical and Healthcare-related industries. Chemical Engineering, Polymer Engineering, and plastic manufacturing industries will be given special attention around the universities in oil-producing areas.
Computer science engineering, information technology and other high-tech areas will be given special attention and located close to universities with solid departments linked to the industries.

4) The Federal Government, through the National Assembly, must pass a law mandating that the Nigerian government spend 0.3% of their annual GDP on scientific research allocated to various universities and research institutes focused on Science, Technology and Engineering specialisation. We must bear in mind that the United States has been slipping behind China in the last ten years as the latter is spending 2.3% of its GDP on research, while the USA is lagging at 0.8%.

5. The pharmaceutical industries must move to the future with intense research and development divisions. The research department of the pharmaceutical industries must be funded entirely by the Federal Government.

6. All Law schools in Nigeria must establish an intellectual property/patent law department. All industries must also have intellectual property departments that capture new inventions and ensure they are well-protected. The patent law office presently at the Ministry of Trade and Investment must be moved to the Ministry of Science, Technology and Economic Development.

6) NAFDAC, SON and NOTAP must all be moved to the recently created Ministry of Science, Technology and Economic Development. These agencies will collaborate to register and promote indigenous patents. They will also work with universities to ensure rapid dissemination of new knowledge, fostering higher numbers of patent applications and pushing the universities to produce more PhDs in all Science and Technology fields. As of 2019, China produced nearly 2,700 PhDs in science and engineering. The USA is behind China, with less than 2,500 PhDs in science and technology per annum. China has surpassed the United States in total patents published globally. Furthermore, China started with one industrial research park in 1979 and now has over 60 spread throughout all the Provinces in China.

7. The Finance Ministry and Customs Department must have joint meetings with the Ministry of Science, Tech and Economic Development. The sessions should focus on identifying indigenous knowledge capital and products made locally. They must ensure that no one imports such products into the country under any circumstance. This way, SON, NOTAP, and NAFDAC will have a robust regulatory voice based on the indigenous technology that must be used to create products. The positive outcomes of this policy are that all indigenous producers will have confidence that their knowledge capital is applied to national development and allow them to grow. Nations create high-wage jobs on this platform and other economic multipliers such as exports, more top-value products and R&D divisions.