BY: JIMOH ABUBAKAR
Nigeria as a giant of Africa has for long been regarded as a nation blessed with abundant human and material resources; however, the underutilization of these potentials has amplified a widespread poverty, low standard of living at individual level and rising unemployment in the country as a result of incessant mono-economic practice and drastic neglect of other sectors of the economy such as agriculture, tourism, mining and the manufacturing industry. In spite of the country’s vast oil wealth, a recent report from United Nations International Children’s Emergency Fund (UNICEF) has shown that majority of Nigerians are poor with 71 per cent of the population living on less than one dollar a day.
The United Nations Human Development Index (2007) also ranks Nigeria 158 out of 177 countries which is a significant decrease in its human development rank of 151 in 2004; and World Bank Development Indicators (2000) have placed Nigeria within the 20 poorest countries of the world. The issue of poverty can be easily traced to mono-economic practice and underutilization of the nation’s endowed resources, especially in manufacturing sector which could have opened up windows of opportunity in job creation and economic development.
So far, it has been argued that the fastest trend through which a nation can achieve sustainable economic growth and development is neither by the level of its endowed material resources, nor that of its vast human resources, but technological innovation, enterprise development and industrial capacity. For instance, despite its poor natural resources, and the hurdles it faced from 1920s chronic inflation, Germany has effectively exploited the manufacturing sector and rose up to become the largest economy in Europe and the fourth largest in the world.
This was achieved after the Europe recovery program instituted in the 1950s by the America’s foremost World War II military leader, George Marshall to rebuild the war-shattered Europe. The ideology largely concentrated on industrial revolution which gave birth to the four-year Marshall economic plan adopted by both French and German governments. Consequently, these nations have witnessed concrete development in their industrial investments, infrastructural development and significant level of employment generation. Just as America regained its strength and became the world industrial giant through aggressive industrial revolution following the cold war that led to the breakup of former Soviet Union in the 1990s.
In the modern world, manufacturing sector is regarded as a basis through which a nation’s economic efficiency is determined, measured, compared, classified and ranked. However, after the discovery of crude oil in Nigeria in the late 1950s, the nation has shifted from its preeminent developing industrial production base and placed heavy weight on crude oil production; not only has this jeopardized its economic economics activities, but also aggravated the nation’s level of unemployment.
Nevertheless, the well-known developed economies have over the years adopted some initial tactical and favourable measures in pursuit of their economic growth and development through massive diversification of their economic resources into manufacturing sector to enhance their Gross Domestic Production (GDP) capacity. These measures have paved way not only for employment opportunities, but also raising standard of living at individual level that a developing world like Nigeria can exploit to attain a balanced economic growth and development.
Creating an enabling environment is an imperative for Nigeria to attract and sustain both local and foreign investors for industrial and commercial activities in the country. This refers to effective national policies, laws, physical infrastructure (road, electricity, water, healthcare, etc.) and other infrastructure (access to education, banks etc.) that need to be put in place for people to be able to use Information Communication Technologies (ICTs) for economic, commercial and social advantages. For instance, the United Arab Emirate (UAE) has been able to put in place the industrial enabling environment to pull both local and foreign investors through whom it has recorded a remarkable development in its economic activities. Following this trend, Dubai became the largest economy in UAE after Abu Dhabi.
Of course, it is not in doubt that Nigeria is identified among other African nations with vast material and human resources that could help to drive series of manufacturing industries. However, the country still lags behind. For instance, Canada majors in wood production and contributes 10% to the global forestry product for it has recorded more than 75% (23.5 million hectare) landscape for forest production. Consequently, the country has put in place effective Forest Protection Laws backing forest harvest in the country. Through forest production, Canada has been able to save about 3 million jobs in the last 5 years. Consider in this case, the death of Jebba Paper Mill which would have paved way for employment opportunities in Nigeria.
Stable power supply is another factor which largely determines the presence and development of manufacturing sector in any developed economy. Regular power supply has marked the basis for the increasing level of intensive capital production among the G8 economies such as West Germany, France, Italy, Japan, United Kingdom, United States, Russia and Canada. Ghana has followed same trend and ends up attracting most of foreign Manufacturers such as Nigeria Dunlop Ltd which vacated Nigeria due to irregular power supply. Also, about 90% of the Textile Industries previously operating in the country have relocated to other countries in search of regular power supply. This has caused the nation millions of job opportunities and capital flight.
This wholesome development has not only discouraged investors at both local and international levels, but also driven away the existing manufacturing industries. Nigeria electricity generation which presently stands at 3, 800 Mega Watts cannot sustain all the nation’s energy needs. Recently, the Nigeria Energy Commission (NEC) reported that the manufacturing sector alone will consume about 2000 Mega Watts of electricity to keep the factories in the country running at installed capacity. The country remains the worst hit by the dwindling power supply which has led to the near total collapse of the entire industrial sector. Nigeria needs a critical reform in power sector to attain economic growth and development.
International Sustainable Energy Watch (2006) has indicated a glorified industrial and agricultural development from Iran whose 94.4% electricity generation capacity results to rapid increase at 7.4% much higher than the population and economic growth rate meaning a substantial improvement in industrial and agriculture utilization as well as per capital consumption of electricity. The collaborated effort of the South Africa Department of Minerals and Energy, and an Independent Power Producers, Eskom towards implementation of 2008 South Africa Response to National Electricity Shortage Policy has generated a fast-tracking electricity projects which has reinforced the nation’s industrial sector.
Some developed economies have focused on security of lives and property in pursuit of sustainable growth and development. Just as United Kingdom has hitherto put in place effective security scheme and constant review of its National Security Strategy that draws both local and foreign capitals, Nigeria can follow same trend and put in place workable security strategy that will secure the investors’ lives and property in the country.
Nigeria has demonstrated a lukewarm attitude towards Research and Development sector despite a number of R & D institutes including universities and polytechnics in the country. However, these institutions are poorly funded; as it is evident that the nation’s annual estimation provides little percentage for the R & D sector of the economy. Science and technology research has been found to be important since it plays an integral role in the creation of new knowledge and skills as well as driving the world economy. Notable advanced nations like United States places more emphasis on R & D as it allocated about 64.8% to R & D in 2010 fiscal year.
The inability to translate research discoveries into reality is another menace backpedalling and discouraging manufacturing research and development in Nigeria. The sector, if skillfully manned will lay a solid foundation for a fresh agro-chemical development that will be a critical factor in agro-economic expansion and indirectly answered industrial needs for raw materials. For instance, the United Nations Industrial Development Organisation (UNIDO) (2009) opined that development of competitive agro-industries is crucial for creating employment and generating income opportunities, as well as enhancing the quality of and demand for farm products. Also, the Food and Agriculture Organisation (2011) has pointed out that China records economic boom through significant market restructuring and reviving economic environment, production and consumption volume of agro-products have risen.
Today, the crops developed during the Green Revolution Technologies were high yield varieties; as they were domesticated plants bred specifically to respond to fertilizers and produce and increase amount of grain per acre planted. In view of this, Briney (2010) states “the use of Green Revolution Technologies exponentially increased the amount of food production world wide”. Nigeria can as well lay a considerable emphasis on agricultural research and extension services such as provision of agro-technological training facilities for research institutions and scholarships for agro-technological students in higher institutions.
Nigeria needs a considerable review of its tax policies also which must be done to catalyse investment and commercial activities from both local and international directions as well as discouraging importation of goods, especially the basic needs for which the country has production capacity. The Nigerian Company Income Tax Act (CITA) of 1961 amended in the year 2007 mandates a deduction of 30% tax rate on a Company annual income for the assessment year. Consider the comatose level of infrastructural facilities in the country; this percentage would become a burden on some industries, as they might lack the capacity to dutifully observe their tax obligation at regular period. For instance, Russia is identified among the G8 economies for it has placed an enabling environment and favourable Industrial Tax rates between 20% and 24% on manufacturing sector.
Furthermore, tax can be used as a weapon to discourage the ongoing massive level of importation in the economy. For instance, the Central Bank of Nigeria (CBN) reported that Nigeria has spent N155bn on rice importation in 2010. This awful phenomenon has called for a question as why should Nigeria be a major importer of rice as it is blessed with good climate and resources to produce the commodity locally? The consistent massive importation has indirectly reduced the nation’s Foreign Reserve from $46 billion to $33 billion in 2009 and 2010 respectively.
There is a compelling need for the review and full implementation of the Nigerian Industrial Policy of 1977 which aimed at encouraging and advancing the interest of Nigerians and enhancing their full participation in the control and management of business activities in the country; as various forms of abuses and shortcomings in the implementation of this Policy have prevented the full realisation of its noble objectives. It has been reported that the foreigners still connive with Nigerians to fake business ownership in the country. Consequently, Nigerians have little control over industrial enterprises.
Nigeria can learn from the French government which has put in place favourable Industrial Policy that has over the years helped to protect its citizens participation in the national enterprises development towards the international competitive advantage. Following this trend, the country has attained the fifth position among the world largest and wealthiest economies, and second largest economy in Europe.
Nigeria consists of 36 states with blessed vast mineral resources such as Coal, Tin Ore, Glass sand, Quartz in Cross River; Zinc Ore, Lime stone, Salt in Ebonyi; Iron Ore, Gemstone, Limenite in Bauchi; Petroleum, Copper, Gold, Marble in Edo; Silica sand, Mica, gypsum in Ogun; among others. In fact, Nigeria has proven deposit of over 1.5 billion tons of Coal, but this has yielded no concrete development for the country as they are transformed only by means of modern technology which the country presently cannot provide.
Another way Nigeria can exert a pull on manufacturing sector with a considerable employment opportunities is recycling production. It has been argued that each household produces around one ton of rubbish every year, which equates to around 29.1 million tons for the United Kingdom each year. Waste materials have for long posed series of environmental challenges to Nigeria. United Kingdom has seen waste management as an opportunity for recycling activities and employment generation. Nigeria can take advantage of its environmental conditions and develop a workable recycling system to enhance capacity building. This will automatically resolve both environmental pollution and unemployment in the country.
Jimoh, Abubakar
NYSC Member writes from
Revenue Mobilisation Allocation & Fiscal Commission (RMAFC)
abujimoh01@yahoo.com
Filed under: Economy, Uncategorized

