Business magnate and President of Dangote Group, Aliko Dangote, says priority investments in infrastructure and core industries among other recommendations were vital panaceas to boost Nigeria’s economy to its desired level among contemporary nations and the world at large.

The Africa’s richest man urged the Federal Government to employ strategically
prioritise investments in infrastructure to reverse the trend and boost Nigeria’s economy to its desired level among contemporary nations and in the world over.

In his address as Guest Speaker at the 50th Annual General Meeting of the Manufacturers Association of Nigeria (MAN) and the 2nd Adeola Odutola Lecture held on Tuesday in Lagos, Dangote noted that with the collective effort of all stakeholders, it was feasible to move Nigeria from “developing nation” to “newly industrialised nation”.

Dangote said it was imperative that the familiar challenges limiting the pace of industrialisation are frontally addressed while setting a clear-cut agenda for the next 10 years.

He further identified priority investments in infrastructure and core industries among other recommendations, as vital panaceas to boost Nigeria’s economy to its desired level among contemporary nations and in the world overall.

Dangote identified various measures which needed to be put in place to allow Nigeria speed up its industrialisation process and development growth to include investment in infrastructure, creation of business-enabling policy framework, development of core industries, and macroeconomic stability, among others.

He said: “The experience in various parts of the world has shown that industrialisation drives economic growth and development, which improves living standards as evidenced by the high output and per capita income in industrialised countries.

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“The rate of industrialisation in Nigeria has been slow as evidenced by the low contribution of manufacturing to GDP, poor capacity utilisation, and constrained export of manufactured products within and outside the continent. For instance, Nigeria’s share of world output of 0.41%, ranked 29th in the world which is unimpressive, considering its size and resource endowments. It ranks poorly when compared with India at (3.1%), South Korea (3.0%), and China (28.7%).

“Nigeria’s industrialisation process has been greatly challenged by structural and institutional constraints, particularly funding. These factors have over the years cumulatively contributed to its disappointing performance. For instance, in the last decade, average share of manufacturing value added to GDP in countries like China and Malaysia stood at 41% and 38% respectively; compared to 25% in Nigeria.

“In terms of capacity utilization, a major performance indicator which reflects the ability of manufacturing companies to meet rising demand without increasing cost, Nigeria achieved a rate of 55% compared to 76% and 78% in China and South Africa respectively. The country’s dwindling industrial performance has significant socio-economic implications, as poverty and unemployment continue to rise.

“From 1960 to 2003, the development trajectory of China by far outpaced that of Nigeria within the same period even though Nigeria began on a seemingly better footing. It is therefore important to track back to where Nigeria ‘dropped the ball’ with a view to repositioning the country to the path of growth, development, and social upliftment.

“Based on the comparative analysis of Nigeria and China, one can safely make the following deductions: the numerical strength of a nation (population) can indeed be translated into economic wealth; steady growth in manufacturing output is possible when the operating environment is conducive; no nation can easily transit from ‘developing’ to ‘newly industrialised’ without a vibrant manufacturing sector; and effective implementation of long term plans backed with policy consistency will promote enduring economic growth and development.

“Nigeria’s manufacturing sector is dominated by light manufacturing with only a few firms operating in the heavy segment of the sector. There are several factors that need to be in place to accelerate the growth of the manufacturing sector in Nigeria.

“These include security and rule of law, industry-oriented government policy; adequate infrastructure; industry-oriented Research and Development (R&D); a well-developed SME sector; building of human capacity, and embrace of technology to improve efficiency through automation of manufacturing processes.

On current status of the manufacturing sector, Dangote noted that manufacturing was singled out in the Nigerian Industrial Revolution Plan (NIRP) as the driver of industrialisation and economic growth.

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“The contribution of manufacturing to Real GDP in Nigeria contrasts with what was obtained in countries like China (27.16% in 2019), Germany (19.11%), Japan (20.74%), and South Africa (13.53%). To drive industrialisation and sustained economic growth in Nigeria, it is important that deliberate policies that are manufacturing-specific should be designed to support manufacturing activities and address the perennial challenges of the sector. It is important to note that the current government policies, if fully implemented, are good enough to address most of the challenges we are now facing,” he said.

Among manufacturing challenges, he identified acute shortage of forex, dearth of long-term funds, limited infrastructure, policy inconsistency/implementation/ enforcement, over-regulation, multiple and high taxes for the industries and insecurity.

While setting an agenda for the next 10 years, Dangote said: “To achieve industrialisation goals, it is necessary for a nation to formulate plans and policies that will enhance and sustain industrial development. Sustainable industrial development involves establishment of a conducive environment to encourage investment and ensure efficient usage of resources to increase productivity and growth of the nation.

“Nigeria needs to henceforth intensify efforts at promoting industrialisation with specific focus on the attainment of the following targets in the next 10 years: 15% manufacturing sector growth, 20% manufacturing contribution to GDP, 15% growth in export of manufactured products, 10% increase in the share of manufacturing to total export merchandise, stronger inter-industry linkage between SMEs and large corporations, improved manufacturing contribution to Government tax revenue and 20% increase in manufacturing employment.”

Dangote added: “The drive to transform Nigerian into an industrialised nation has been a consistent goal of successive governments since independence. It is therefore, imperative that we focus on sectors with great potential for inclusive growth. Sustainability must be central to our industrial development agenda.

“There is also the need for government (at all tiers) to ensure that they consult widely with relevant stakeholders when taking far reaching decisions on 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 give them legal backing and make them less susceptible to arbitrary changes by successive governments.

“Industrialisation, driven by manufacturing, has the capacity to facilitate enduring economic growth. The transition mechanism entails the availability of required resources, adoption of appropriate technology, provision of favourable operating environment, human capital development, stable macroeconomic environment and adequate infrastructure.

“With the collective effort of all stakeholders, it is feasible to move Nigeria from developing nation to newly industrialised nation status within the next 10 years.”

The Star