The Lagos Chamber of Commerce and Industry (LCCI) has said that the current coronavirus situation ravaging the world presents an opportunity for Nigeria to embrace import substitution and develop the manufacturing sector.
Speaking in Lagos last week, Toki Mabogunje, president of the LCCI, said countries across the world might place technical embargo on exports of essential goods in a bid to meet local demand and as way of managing disruption to global supply chain.
This, Mabogunje said, would hurt local manufacturers’ ability to access raw materials.
“We strongly believe a scenario as this will not bode well for import dependent countries like Nigeria, as limited supply of raw materials will further damage already constrained manufacturing capacity utilisation,” she said.
“We are, however, convinced that the current situation presents an opportunity for the country to stimulate and promote import substitution. This implies changing the narrative from the base, mobilising resources and galvanising critical stakeholders and actors to reach consensus to commit to creating an economy that will not only produce significant proportion of its major commodities (intermediate and finished goods), but equally competitive on a global scale,” she explained.
Import-substitution is a strategy in which local industries are established with a view to producing goods that replace imported ones.
Mabogunje further explained that the current situation in the global oil market also presented an opportunity for redirecting Nigeria’s export initiatives and over dependence on oil, focusing on the non-oil sector.
She said achieving that required policies from the government that would intensify local production in the real and service sectors.
“We believe that there is a need for collaboration and partnership between the private sector and the government (ministries and agencies) to achieve any meaningful success in this drive as it will help bridge the gap between government prescriptions and the real needs of the private sector,” she noted.
She further said that to drive non-oil export and stimulate participation of SMEs, Customs’ procedures and documentation processes must be less cumbersome and technology driven.
“The new approach to import substitution must be a holistic concept of policies and deliberate strategies with the buy-in from both the public and private sectors,” she explained.
“Government must lead from the front through assurances of continuity of policy and programmes thereby give impetus to the private sector and venture capitalists to make investment decision in priority intermediate and finished goods.”
