Nigeria has abundant raw materials but these are mostly exported as raw commodities or products. As a result, the country loses billions of naira and thousands of jobs to countries which do the real value addition.
A report released by Nigerian Export Import Bank (NEXIM), using cocoa as a case-study, shows that Africa accounts for over 70 percent of the global cocoa production with Nigeria as one of its key producers. The global value of raw cocoa export is $10 billion while the total value of all finished goods from cocoa annually is $200 billion, with chocolates alone having $100 billion. This shows that Africa accounts for 73 percent of global production but enjoys less than five percent of the wealth in the value chain.
Ogbonnaya Onu, minister of science and technology, said recently that the Nigerian leather industry could be worth about $900 million in export in the coming years provided that further action was taken and value addition intertwined with the export process.
Mansur Ahmed, president of the Manufacturers Association of Nigeria (MAN), said recently in Lagos that value addition was key to success in manufacturing, as it involved transforming raw materials into finished goods.
“For instance, you produce cocoa, turn it into cocoa butter and you export it. What you get from that cocoa butter, they convert into chocolates and for the same quantity of cocoa butter, the manufacturers of chocolate will make more profit a thousand times more than you do.”
Experts say value addition to exports will generate more foreign exchange and contribute to the country’s GDP growth. It will provide jobs, thereby reducing high unemployment rate, which stands at 23.1 percent currently.
But this will require some basic facilities, especially infrastructure, to happen. In the view of Ahmed of MAN, infrastructure remained one of the main components of a successful manufacturing sector, meaning that adequate investments should be made in this area to revamp power, roads, railways and soft infrastructure such as the business environment.
Tayo Omidiji, head, strategic planning at Nigerian Export-Import Bank, said recently in Lagos that there was a need to improve competitiveness by bridging infrastructure gap, increase funding for research and development to aid innovation and develop intellectual property.
Gbemi Faminu
