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Charting New Course for Industrial Renaissance
A new dawn may have beckoned for the industrial and manufacturing sector of the economy with the newly-constituted Industrial Policy and Competitiveness Advisory Council, inaugurated by Acting President Yemi Osinbajo recently. Kunle Aderinokun writes
Nigeriaâ€™s drive towards industrial development appears to have received fillip with the constitution of an advisory council on industrial policy and competitiveness by the federal government.
It has been a long tortuous journey towards industrialisation without success as policy summersaults of various governments only succeeded in rendering the nationâ€™s hitherto vibrant manufacturing sector comatose. The so-called interventions by successive administrations were only accessible to and favoured selected and privileged companies and individuals that contributed little or nothing to the desired industrial development.
However, determined to make headway in its aspirations, meet the set targets and attain industrialisation, the federal government has established an advisory council.
The Advisory Council
Realising the importance of industrial development in the life of Nigeria and its people, the federal government in its wisdom, brought together seasoned business executives and industry leaders to chart a new course, expected to return the manufacturing sector to vibrancy, speedily lead the nation to industrial growth and make it competitive among comity of nations.
Called the Industrial Policy and Competitiveness Advisory Council, the team of experts is expected to implement an industrialÂ agenda thatÂ will boost the contribution of manufacturing to the GDP by 250 per cent over a five-year period.
The advisory council, which was inaugurated last Tuesday by Acting President Yemi Osinbajo, would drive the federal governmentâ€™s ambitious agenda to make Nigeria a manufacturing hub for West Africa and diversify the economy from its over-dependence on oil.
It is made up of leaders in the private and public sectors and will be chaired by Osinbajo, while the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, and President of Dangote Group, Alhaji Aliko Dangote, will serve as vice chairmen, representing the public and private sectors, respectively.
The alternate vice-chairmen of the council are the Minister of State for Industry, Trade and Investment, Ms. Aisha Abubakar, and Chairman of ANAP Business Jets Limited, Mr. Atedo Peterside.
Other members of the council from the private sector include Mr. Kola Jamodu, Alhaji Abdulsamad Rabiu, Mr. Innocent Ifediaso Chukwuma, Mr. Rahuk Savara, Mr. John Coumantarous, Mrs. Stella Okoli, Mr. Makul Mathur, Mr. Obi Ezeude, Mr. Fidelis Ayebea, Mr. Lazarus Angbazo and Mrs. Juliet Anamah.
Others are Mrs. Kofo Akinkugbe, Alhaji Ado Mustapha, Alhaji Kamaldeen Yusuf, Alhaji Adamu Atta, Mr. Charles Abudu, Alhaju Ibrahim Salisu Buhari, Mr. Isiaku Tofa, Mr. Ade Ogundeyin and Dr. Frank Udemba Jacobs.
Public sector members of the council are the Ministers of Finance, Budget and National Planning, Agriculture and Rural Development, Power, Works and Housing, Transportation, Minister of State for Petroleum Resources, Ministers of Mines and Steel and Science Technology, as well as the Central Bank of Nigeria (CBN) Governor.
The council will also have a technical committee whose members are Dr. Yemi Dipeolu, Ambassador Chiedu Osakwe, Mr. Waheed Olagunju, Mr. Olusegun Awolowo, Ms. Yewande Sadiku, Dr. Yemi Kale and Dr. Ayo Teriba.
The councilâ€™s secretariat shall be headed by a project coordinator from the Ministry of Industry, Trade and Investment, with support from a leading firm to drive implementation.
The secretariat will propose and develop the agenda items for the councilâ€™s deliberations and identify the necessary resources required to support its deliberations.
The council has been mandated to, amongst others, provide input to the formulation of sectoral and industrial policy, and government interventions aimed at enhancing the performance of the Nigerian industrial sector.
The contribution from the manufacturing sector to gross domestic product (GDP) in Nigeria decreased to N1.543 trillion in the first quarter of 2017 from N1.645 trillion in the fourth quarter of 2016. The contribution of the sector to GDP averaged N1.363 trillion from 2010 until 2017, reaching an all time high of N1.719 trillion in the third quarter of 2014 and a record low of 875.408 billion in the first quarter of 2010.
As at the first quarter of this year, the real gross domestic product of theÂ manufacturing sectorÂ was 1.36 per cent (year-on-year),higher than the same quarter of 2016 by 8.36 per cent points.
According to the National Bureau of Statistics (NBS), which released its numbers recently, â€œThis was the first positive growth rate recorded in the sector for over a year, and was 3.90 per cent points higher than rate recorded in the preceding quarter (Figure 6). Growth rate of the sector on a quarter-on-quarter basis stands at â€“6.21 per cent.â€
The NBS noted that the economy recorded a negative growth ofÂ -0.52 per cent (year on year) in the first quarter, reflecting an improvement of 1.21 percentage points over theÂ -1.73 per cent contractionÂ in the preceding quarter. The GDP for Q1 represented a contraction for the fifth consecutive quarter since Q1 2016. The aggregate GDP (aggregate economic growth) stood at N26.028trillion in nominal terms, compared to N22.235trillion in the corresponding quarter in 2016, resulting in a nominal GDP growth of 17.06 per cent.
Nominal GDP growth of manufacturing in the first quarter was recorded at 16.63 per cent (year-on-year), 19.61 percentage points higher than figures recorded in the corresponding period of 2016 (-2.98 per cent) and 13.08 percentage points higher than the preceding quarter figure of 3.56 per cent. Quarter on Quarter growth of the sector is recorded at â€“0.79 per cent. The contribution of manufacturing to Nominal GDP was 9.31 per cent in the first quarter, slightly lower than figure recorded in the corresponding period of 2016 at 9.34 per cent, but higher than 8.37 per cent recorded in the fourth quarter of 2016.
Following the inauguration of the advisory council, manufacturers under the umbrella of the Manufacturers Association of Nigeria (MAN) have expressed satisfaction and are feeling elated about the development, expressing optimism that aÂ turnaround would happen to the sector.
â€œThis is a welcome development. As a matter of fact, manufacturers received the news with enormous joy laden with great expectations. This joy stems from the direct and indirect beneficial nature of the core mandate of the council, which seeks to fast-track the industrialization of Nigeria and significantly increases the contribution of manufacturing to GDP from the current 9 percent within the next five years. Most gratifying is the composition of the council, which is an array of 36 well experienced professionals, industrialists and technocrats that have distinguished themselves in different sphere of human endeavours in the public and private sectors of the economy. Even though the core mandate of the council appears ambitious, it is attainable,â€ said MAN President, Dr. Frank Jacobs in an interview with THISDAY.
â€œPersonally, I was elated with the constitution of the council. Â I was elated because the development underscores the commitment of the present Government to the industrialization agenda of Nigeria. First was the governmentâ€™s buy-in to Nigeria Industrial Development Plan (NIDP) followed by the Economic Recovery and growth Plan (ERGP) that is expected to restore the economy back to the path of meaningful growth. Therefore, the constitution of the council to contribute to the actualisation of the objectives of these Plans is quite commendable,â€ Jacob added.
Acknowledging that theÂ central objective of the council is to assist the government in formulating policies and strategies that will enhance the performance of the industrial sector to further the countryâ€™s industrialisation programmes, Jacob noted that, â€œThe development indeed is a new paradigm; a renaissance for industrial efforts in the economy.â€
According to him,Â Â the constitution of the Council, which brought together government representatives, the private sector experts in different fields together to tinker on a way forward for Nigeriaâ€™s industrialisation is the tonic that the economy really needs at the moment.
The MAN president expressed optimism that, â€œThe development no doubt will first, provide a veritable platform for the Manufacturers Association of Nigeria to present burning issues on its advocacy radar and get them resolved faster. Drawing from the core mandate of the council, one could imply that impediments responsible for the lackluster performance of the manufacturing sector will be given priority attention and this would automatically further engender friendlier operating environment.â€
â€œWhen this occurs, the sector would be in a better position to play its conventional role as catalyst for employment and wealth creation. In broad terms, the constitution and inauguration of the council means, improved operating environment, enhanced manufacturing output, higher volume of export of manufactured products, more foreign exchange earnings, and increase in employment generation, improved revenue due to Government through tax to mention a few,â€ he posited.
Expressing faith in the composition of the advisory council, Jacobs said everybody on the council is very familiar with the challenges, prospects, milestones and suggestions on the way forward for industrialisation in Nigeria.
â€œEvery member of the council knows that diversification of the economy and resource based industrialization are leeway out of the current economic quagmire. In addition, we are fully aware that what is needed in Nigeria now is the spirit of oneness and nation building which I believe we will pursue conscientiously,â€ he noted.
On the passage of bills to aid small and medium enterprises, Jacobs said: â€œThe signing of the Collateral Registry and Credit Reporting Acts is also a good development for the economy, especially for the SMEs. When the Collateral Registry and Credit Reporting systems are properly implemented, the challenges of funding for small businesses would be resolved. Â The two Acts will allow small businesses to use their moveable assets which include inventory, machines, etc as collateral for loans.Â The impact of this development will no doubt lead to growth and development of the SMEs and help ameliorate the challenges of unemployment and poverty in the country.â€
Chief Executive Officer, Global Analytics Consulting Ltd, TopeÂ Fasua, who also welcomed the development, said the inauguration showed thatÂ the government was determined to continue exploring the contribution of business and manufacturing to economic growth.
FasuaÂ advised government to remember that real scalability will come from the small and medium scale sectors and as suchÂ should not get carried away by big business â€œmost of which are too smart for a country like ours.â€
â€œI suggest that we develop an ease of doing business index which focuses on how we can grow and stabilise that sector.Â It is important to know the drawbacks of the focus on big business and to hedge against the downsides,â€ he noted.
Similarly,Â Executive Director, Corporate Finance, BGL Capital Ltd, Femi Ademola, in welcoming the move, stated that, â€œIn addition to ensuring the diversification of the economy from oil to the industry sector, it is also in line with the 10-point fiscal roadmap of the Federal government which include Government interaction with the private sector and the mobilisation of private capital.â€
Ademola was of the expectation that, the council would provide very important advice on the ease of doing business which will include streamlining of approval processes, infrastructure development and access to finance.
He, however, pointed out that, â€œThe structure and the terms of reference of the council appear to be similar to those of earlierÂ committees and councils inaugurated by past administrations.
Those that came to mind are the Committee onÂ Job Creation, the Committee on Petroleum Industry Reform and the Committee on the Privatisation of Refineries that was formed by the administration of President Goodluck Jonathan. How did these committees perform and what happens to their recommendations?â€
The executive director advised the Federal Government toÂ â€œtake this council very seriously and consider their recommendations carefully for implementation.â€œ
â€œIt is only when we see the improvement in the countryâ€™s competitiveness and in ease of doing business that this action will be considered a success,â€ he added.
In his reaction, Director, Union Capital Ltd, Egie Akpata, observed that, this new council seems to be populated by high achieving Nigerians from the public and private sectors.
Akpata, however, added that, â€œThe large number of members and overlap with what the government has as its primary functions might impact the councilâ€™s effectiveness.â€
â€œIt is interesting that a new body with significant private sector participation is being set up at this time. The new government had in the past indicated that it would not go the way of the prior administrationâ€™s economic council which had significant private sector participation. The previous view was that views of the private sector would be quietly sought as needed. Letâ€™s give this new council till year end to assess their effectiveness,â€ he stated.
While the federal government has reposed in the advisory council the confidence to drive its industrial agenda, all eyes are on the team to deliver on its mandates.