Boosting Devt through Competitiveness in Raw Materials


 With Nigeria projected to spend over N36 billion on the importation of raw materials in the next five years, the federal government has developed an evidence-based strategy to check the trend and also attain competitiveness. Adedayo Akinwale writes

Nigeria is not called a giant for nothing. But many are wont to challenge that description despite the rebasing of the nation’s economy in 2014 to emerge as Africa’s largest economy, outstripping those of South Africa and Egypt.

According to numerous reports, the Nigerian economy has grown substantially over the years with huge foreign exchange earnings from oil, and impressive agricultural output. However, the remarkable growth‎ recorded has not translated into economic diversification and commensurate jobs to foster social development of the country.

In recent times, the services sector has overtaken the industrial sector in terms of contribution to Gross Domestic Product (GDP)‎. In 2014, for instance, services accounted of about 60 per cent of Nigeria’s GDP; up from 53 per cent in 2011. This figure is comparable to those of other large economies in Africa such as Tunisia, but lower than that of South Africa, where the sector accounts for about 70 per cent of GDP.

Fighting Recession

‎However, not long after President Muhammadu Buhari took over power in 2015, the country’s economy plunged into recession in August 2016. The negative growth was attributed to a drop in Nigeria’s foreign revenue, following the fall in price of oil, Nigeria’s main export.

The country later came out of the wood with the economy exiting its worst economic recession in more than two decades in September, 2017. In spite of this, the inflation rate as at September 2017 was 15.98 per cent.


Vital Committee

Against this background, the Minister of Science and Technology, Dr. Ogbonnaya Onu on 8th August, 2017 inaugurated the National Consultative Committee on Competitiveness in raw materials and products development to fast track the country’s economic recovery, double digit growth and sustainable development.

The minister revealed that the national strategy, if well implemented would result to significant reduction in importation, while also increasing the acceptability of Made-in-Nigeria products both locally and internationally.

Onu stressed: “In short term period of five years implementation effort, by reducing importation by 10.8 per cent, we will be able to save as much as N3 trillion. The reduction in importation is expected to rise to 31 per cent and later 50 per cent respectively in the mid-term (10 years) and long term (15 years).

“It is important to point out that the ability to boost local content of Nigerian manufacturers and service providers to over 50 per cent in short term and about 80 per cent in the long term will result in massive employment generation of 4.4 million high quality jobs from the 22 project areas,” he said.

Publicity Strategy

However, at a recent roundtable for journalists on National Strategy for Competitiveness in raw materials and products development in Nigeria, organised by the Strategy Implementation Task Unit (SITU) in Abuja, the minister challenged the media to intensify publicity on the competitiveness strategy as a platform to refocus business activities and resources towards utilisation of Nigerian Research and Development (R&D) Institutions’ commercialisable scientific breakthroughs.

The minister who was represented by the Director, Bioresources Technology Department, Abayomi Oguntunde said the gathering of media practitioners in Nigeria was imperative in providing veritable means of galvanising the general public towards successful strategy implementation.

According to Onu, “your role and responsibilities are enormous especially on publicity of the competitiveness strategy as a platform to refocus our business activities and resources towards utilisation of Nigerian Research and Development Institutions’ commercialisable scientific breakthroughs.

“The media should be using this strategy to challenge our industrialists in Nigeria to brave the odds and make paradigm shift from over dependence on imported raw materials and products and look inwards for innovation, competitiveness and attainment of sustainable indigenous industrial revolution.

“With this strategy in place, there will be a deliberate policy of government towards empowerment of the business community through incentives and conducive business environment in upgrading logistics, infrastructural needs and policies of the business community.

“The moral angle in this strategy is for manufacturing sector to spearhead Nigeria’s drive towards global competitiveness in order to provide our indigenous quality materials and products especially in areas where country has comparative advantage in production,” Onu said.

Overcoming Dependence

Presenting a paper titled ‘Understanding the National Competitiveness Strategy, the Model and Governance Structure’, the Project Manager, Mr. Henry Eteama‎ said the Nigerian economy is heavily dependent on oil with little value addition and limited forward and backward linkages to other sectors.

He noted that the limited impact of commodity-driven growth on employment and social development has been further aggravated by liberalisation and globalisation in the absence of consistency and committed government policies and strategies to promote productive capacitors in the economy and ability to compete in international markets.

He lamented that these have left a legacy of poor incentives and weak institutions that threaten economic and political stability and social cohesion. Major deficits in national and institutional capacities, physical and policy infrastructure, including the inability to mitigate impacts of external shocks, have contributed to Nigeria’s developmental challenge, he noted.

Eteama‎ pointed out that the strategy is therefore aimed at addressing the challenge of developing and implementing effective polices to diversify the economy, promote industrialisation and economic growth.

However, he stated that the study experienced limited access to data because in the past 20 years, Nigeria has not conducted the National Census of Industries and Businesses (NCIB) and the National Agricultural Sample Census (NASC), which usually provide information on quantity and value of raw materials and products available locally, identified under the Harmonised ‎(HS) code of the United Nations.

Therefore, in designing the national strategy, a compendium of raw materials and products covered 97 bridge categories of UN double-digit commodity classification (SITC) and were based on Cost, Insurance and Freight (CIF) for a period spanning 2010-2015.

He said, “the country’s highest import was on nuclear reactors, boilers, machinery, equipment and appliances etc, amounting to N9.04 billion. It is projected that in the next five years (2016-2020), the country will spend about N36.04 billion to import raw materials and products.

“With this level of dependence on raw materials and products importation, the nation will contend with funding bill of N36.04 billion for those items in the period, 2016-2020. Clearly, Nigeria cannot sustain this trend; hence, the imperative to develop an evidence-based strategy for government intervention”, he added.

The project manager stressed that the absence of linkages between R&D institutions and industries and businesses is the crux of Nigeria’s slow pace of industrialisation and development. He said without ‎R&D activities being driven by demand of industries and businesses, national infrastructure will be on weak foundation.

“If indeed Nigeria ‎must attain competitiveness, it is imperative to ensure adequate and strong coordination efforts at looking R&D institutions with industries and businesses”, Eteama said.

Devt Prerequisite

The Director General, RMDC, Dr. Ibrahim Hussaini said the forum was an important step towards the implementation of the national strategy.

He added that the forum was aimed at informing journalists as critical stakeholders on the progress made so far in the implementation of the vital strategy and how media organisations could make inputs to ensure collective success.

Hussaini noted that for Made-in-Nigeria products to be competitive both nationally and internationally, the raw materials have to be competitive in quality and price, stressing that this is a task that must be emphasised if the economy must grow.