• Friday, June 21, 2024
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Nigeria needs futuristic industrial policy for sustainable growth

sustainanble growth

Despite Nigeria’s substantial economic size and potential for growth, the manufacturing sector has remained weak over the past decades. At the 2023 BusinessDay CEO Forum,  Akinwumi Adesina, the President of the African Development Bank, emphasized the urgent need for Nigeria to transform its industrial sector. The goal is to improve lives, establish itself as a leading economic power in Africa, and drive the continent’s development. He specifically urged President Bola Tinubu to reposition Nigeria as an industrial hub, stressing the essential bridge between policy ideas and effective implementation.

The history of Nigeria’s industrial policies reveals a series of unsuccessful attempts, from Vision 2020 to Structural Adjustment Programs and Millennium Development Goals. Past initiatives to enhance the industrial sector’s performance faltered due to a lack of commitment and political will. Often, these policies were founded on unrealistic premises and faced challenges due to a lack of harmonized national industrial policy and governance continuity.

To understand the current challenges comprehensively, a review of past policies, an assessment of economic indices, and projections for the future are essential, given that Nigeria’s political landscape since independence in 1960 has been tumultuous, with heavy reliance on oil significantly impacting the manufacturing sector.

The post-civil war period saw annual economic growth of 6.2% until the 1980s oil crisis, leading to negative growth. The First National Development Plan (1962-1968) aimed at industrial development through Import Substitution Industrialization (ISI). Despite efforts in sectors like iron, steel, cement, salt, and paper, the economy became overly dependent on oil after the war. The Third National Development Plan (1975-80) implemented during the oil boom could have promoted industrial development more effectively, but it didn’t. And then, the subsequent Fourth National Development Plan (1981-85) coincided with a global economic recession, exacerbating issues in the manufacturing sector.

Nigeria stands at a pivotal time where bold decisions and committed actions can reshape its economic trajectory

By 1986, the Economic Structural Adjustment Program (SAP) was introduced to address the economic crises of the time. However, it also fell short of expectations due to high loan interest rates, taxation, corruption, recession, and unemployment.

Let’s take Vision 20:2020 as another example, which was introduced to position Nigeria among the top 20 economies but did not materialize. The National Industrial Revolution Plan (NIRP) and the National Enterprise Development Programme (NEDEP), introduced in 2014 by former President Goodluck Jonathan, aimed to enhance industrial competitiveness and empower SMEs.

NIRP’s goals include increasing manufacturing’s contribution to GDP from 4% to 6% by 2015 and above 10% by 2017 to generate up to N5 trillion in annual revenue from Nigerian manufacturers. The underlying motive was transforming Nigeria into a manufacturing hub, promoting an export-led economy, and increasing the manufacturing sector’s GDP contribution. Unfortunately, the Manufacturing sector contributed a paltry 9% to Nigeria’s GDP from 2018 to 2022, while the manufacturing sector contributed N946 billion to Nigeria’s economy in 2022, a clear indication that the execution of NIRP has failed woefully.

While my aim is not to make a long list of Nigeria’s failed attempts at industrialization, it is to spotlight how we got here and the essential need for a futuristic industrial policy in a world that is fast advancing so that we don’t only get crumbs from the global trade and its supply chain.

So, let’s draw a parallel with Singapore, which transformed from a low GDP per capita in the 1960s to a global economic powerhouse. Nigeria and Singapore had a low GDP per capita in the 1960’s. Singapore’s per capita GDP was $500 in 1965 and rose to $82,808 in 2022, While Nigeria’s GDP per Capita was $118 in 1965 and climbed to $2,184 as of 2022. Why is there a stark difference in GDP per capita between the two countries? What changed along the line?

In the 1960s, Lee Kuan Yew championed free trade, attracting foreign investment to Singapore. He established the Housing Development Board and Economic Development Board to enhance economic stability and compete globally. The housing board transformed the island, improved living conditions, and created a world-class metropolis.

With limited land and natural resources, Singapore provided cheap land and labour, waived import duties, and took loans for infrastructure development – Jurong Port inclusive. The Jurong Port alone contributes $150 million to the GDP. The development board fostered local industry development and job opportunities for locals and expatriates. Their strategic, sound financial policies, a corruption-free environment, and investments in technological advancements contributed to Singapore’s GDP per capita leap.

Read also: Self development, key to building sustainable business – Folorunsho

Singapore’s success was rooted in free trade, attracting foreign investment, infrastructure development, and strategic financial policies. This is a nation among many that Nigeria can take lessons from. However, we must be intentional and have dedicated leadership and strong political will to make this materialize otherwise, we will be here singing the same song in the next thirty years.

In conclusion, Nigeria stands at a pivotal time where bold decisions and committed actions can reshape its economic trajectory. To address its economic challenges holistically, it must take into account its diverse cultures and environments. And by using comprehensive findings and quantitative analysis, the country can develop workable industrial policies for successive political administrations.

In order to transform Nigeria into a regional industrial hub, good governance and visionary leadership are essential. This must be in place before we can start discussing meeting KPIs and effective implementation. Without good governance and visionary leadership, our development will be like a running shadow in the night.