Alhaji Aliko Dangote, President of the Dangote Group stated that the importance of manufacturing in ensuring the growth, stability and resilience of an economy cannot be overemphasized. In recent years, he said manufacturing sector’s contribution to GDP has hovered around 9%, which is low and indicates that previous efforts at industrializing Nigeria through manufacturing has not yet yielded the desired result.
Dangote while presenting his paper on the theme: “Agenda Setting For Industrializing Nigeria In The Next Decade” at the second Adeola Odutola Lecture in Commemoration of the 50Th Annual General Meeting (AGM) of the Manufacturers Association Of Nigeria (MAN) held in October 2022 At Lagos Oriental Hotel, Lagos.
Manufacturing Sector Challenges
In his words: The sub-optimal performance of the sector is due to the existence of binding constraints some of which include:
i Acute shortage of forex: The manufacturing sector is currently overwhelmed by shortage of forex which makes imports difficult and expensive.
ii Dearth of long-term funds: Manufacturing in Nigeria is constrained by inadequate and high-cost of credit. Of the N92.23 trillion aggregate credit to the economy by commercial banks from 2017-2021, only N92.77 billion or less than 1% (one percent) was channeled to the manufacturing sector.
iii. Limited Infrastructure: The stock of infrastructure available to support manufacturing in the country is grossly inadequate.
iv Policy Inconsistency/Implementation/Enforcement: The Nigerian industrial sector used to be a haven for Foreign Direct Investment, but that has changed due to inconsistency and impromptu changes in government policy.
v Limited core industries: A number of large-scale investments that would have triggered the proliferation of smaller industries around it are unfortunately either comatose or functioning sub optimally.
vi Over-Regulation: Multiple regulation of the industry by different government agencies resulting in multiplicity of charges also constitute a major challenge.
vii. Multiple and High tax rates for the industries: The manufacturing sector is beset with over thirty statutory taxes, levies, fees, rates and charges including company income tax, stamp duties, petroleum profit tax, capital gain tax, industrial training fund tax, education tax, value added tax etc.
viii. Insecurity: The latest and the most grievous challenge confronting industries is the heightened level of insecurity across the country manifesting in the form of kidnapping, banditry, herdsmen-farmers crisis to mention a few.
In consideration of the afore-mentioned challenges, he stressed that there is an urgent need for a shift in policy approach and strategy to reposition the manufacturing sector for greatness in the next ten years. It is imperative that the familiar challenges limiting the pace of industrialization are frontally addressed while setting a clear-cut agenda for the next 10 years, he noted.
Dangote pointed out that the drive to transform the Nigerian economy into an industrialized nation has been the goal of successive governments since independence. Regrettably, he said the industrial sector contribution to aggregate output has been on the decline, which is in part responsible for the sluggish pace economic development and increase in poverty.
“It is imperative that we focus on sectors with great potential for inclusive growth when prioritizing growth drivers.
“Sustainability must be central to our industrial development agenda and so the efficient utilization of resources, the environment and the welfare of our host communities must be given due attention.
“There is also the need for government (at all tiers) to ensure that they consult widely with relevant stakeholders when taking far reaching decisions in key sectors of the economy.
“This will make it much easier for manufacturers to make long-term business plans. In addition, policies that have been “tried- and- tested” should be backed with an Act of parliament to make it justiciable and less susceptible to arbitrary changes by successive governments
