Background

Nigeria’s manufacturing sector has been plagued by poor power supply, high cost of inputs and of doing business, multiple taxation, infrastructural deficit, low access to finance, weak intellectual and property rights, insecurity, low quality of ‘Made in Nigeria’ goods, poor information flow, and lack of synergy between the educational system and the labour market. Consequently, Nigeria’s trade imbalance is high.

Past Reform and Achievements

Government has been unrolling a National Industrial Revolution Plan (NIRP) aimed at developing Nigeria’s areas of industrial comparative and competitive advantage in agro-allied and agro-processing, metals and solid mineral processing, oil and gas related refining, and light manufacturing, construction and services. A Sugar Master Plan was developed to provide a roadmap for 100% local production of sugar consumed in Nigeria. As automobile imports are about US$3.5 billion every year and payment for automobile imports is the second highest user of Nigeria’s foreign exchange, a national automotive policy was designed to establish a local automobile industry and domesticate both production and consumption of cars in Nigeria. A new policy was enacted for Cottons, Garments, and Textiles, with the medium-term objective of doubling output in the sector and creating up to 75,000 jobs. A triple helix framework, with Ministry of Science and Technology, was launched to drive technology development, and adoption in Nigerian industry. Government also partnered with the private sector to establish the National Competitiveness Council of Nigeria (NCCN), so as to enhance Nigeria’s competitiveness with carefully considered policies.

The reforms have saved over ₦200 billion from the cement industry, as no import quota was issued. The government has successfully secured aggregate pipeline investment commitment of US$3.1 billion into the Nigerian sugar sector and increased sugar project sites in the country from 6 to 17. The Onne Oil and Gas Free Zone has been transformed, with US$6 billion invested leading to the attraction of 150 companies into the zone, with 30,000 jobs created to date. Foreign direct investments worth billions of dollars have also been made.

Challenges and Next Steps

The poor power supply in the country should be urgently addressed to reduce overhead costs and make doing business easy. Investments should be made to reduce the country’s other infrastructural deficits. Regulations that obstruct smooth working of businesses should be repealed. Local manufacturers should be well incentivized.