A Brief Overview of the Nigerian Manufacturing Industry
Like every economy, especially developing ones, Nigeria has enjoyed a long period of sustained economic growth. It is currently ranked the 29th largest economy in the world. However, contributions from the industrial sector to the country’s Gross Domestic Product (GDP) are still poor. Some studies say that industrial development is a pathway to sustainable economic growth but how has Nigeria fared in the manufacturing sector and what is the impact on the economy?
The impact of manufacturing on economic development can’t be overemphasized. Very few countries have been able to grow their wealth without investing in the manufacturing industry. A strong and thriving manufacturing sector usually precipitates industrialization.
The history of industrial development and manufacturing in Nigeria has been marred with a series of policy inconsistencies and distractions attributable to the discovery of oil. From a modest 4.8% in 1960, manufacturing’s contribution to the nation’s GDP increased to 7.2% in 1970 and to 7.4% in 1975. In 1980, it declined to 5.4% but then surged to a record high of 10.7% in 1985. By 1990, manufacturing contributed 8.1% to the GDP but then dropped to 7.9% in 1992, 6.7% in 1995 and fell further to 6.3% in 1997. As of 2001, it dropped further to 3.4% from 6.2% in 2000. However, it increased to 4.16% in 2011 which is less than what it was in 1960 (CBN, 2011).
Despite the challenges that beset the Nigerian manufacturing industry, it has witnessed good growth in recent years. This can be traced to many factors including the government’s ban on imported goods. According to Nairametrics, a business intelligence firm, five local vegetable oil brands dominate the Nigerian Market due to the government’s import ban. Similarly, the spaghetti manufacturing industry has recorded huge success in recent years. Nigeria is now the 12th largest instant noodle market globally.
The same success has been recorded in the cement industry. For instance, Dangote cement accounts for 60% of the estimated 33 million metric tonnes (MMT) of local cement demand in Nigeria. Also, manufacturing industries in Nigeria have done well in the production of goods for the nation’s population as well as for export.
In addition, the government has highlighted some initiatives to boost manufacturing in Nigeria which include;
– Provide incentives to support industrial hubs;
– Review local fiscal and regulatory incentives to support the development of industrial cities, parks and clusters;
-Rationalize tariffs and waivers on the equipment and machinery imports required for agro-industry.
Lack of funds and an enabling environment for industrialists have denied the nation the capacity to achieve significant industrial growth or industrialization which Nigeria has always hoped and craved for. Considering the enormous importance attached to industrialization and how it impacts on our economy, any problem militating against its achievement should be of interest to us.
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