Wednesday, March 13, 2019 04.56PM /Nifemi
Taiyese for Proshare WebTV
With less than two months to the inauguration of the Muhammadu Buhari Administration for a second term in office, one sector of the Nigerian economy that will require urgent attention is manufacturing.
Proshare WebTV recently discussed with the Director-General of the Lagos Chamber of Commerce and Industry, LCCI, Mr Muda Yusuf, to gain insight into the expectations of the manufacturing sector during the administrations second term.
Yusuf said that the administration needs to look at critical bottlenecks that have impeded the performance of the sector since the economic meltdown between 2016 and 2017.
"Manufacturing is a business enterprise, the sustainability of any business is a function of its competitiveness" he said.
Yusuf identified infrastructure as a key factor in driving manufacturing in Nigeria.
Speaking further he noted that the lack of robust infrastructure in Nigeria has manufacturing uncompetitive.
Yusuf noted that the mortality rate of industry is extremely high, especially for small and medium-sized enterprises.
He noted that the multinationals and conglomerates because of their size, are able to more easily cope with the challenges of the environment, unlike smaller companies.
Setting an agenda for the second term of the Buhari administration as it concerns manufacturing, Yusuf highlighted the following key issues;
Power is very critical to spurring the activities of the manufacturing sector in any given economy.
Yusuf called 0n the administration to address the issues in the distribution segment, emphasizing metering of customers, resolving the issues around transmission and liquidity.
Logistics is vital for the movement of manufactured products from one location to another.
For Nigeria the DG of LCCI wants the up scaling of rail projects and improvement in the quality of the various expressways across the country. He insists that interstate road projects need to be completed to enable the seamless movement of products and raw materials.
This, he argues, also covers the efficiency and viability of the Nigerian ports, which he expects the Buhari administration to give top priority.
Yusuf believes that smuggling is a major issue bedeviling the growth of the manufacturing sector; reflecting extremely porous national borders.
He expects that there will be more coordinated efforts at tackling the menace of smuggling. High production costs has also made it difficult for Nigerian businesses to compete with foreign products.
Manufacturing requires critical funding to thrive as a sector and the funding environment in places like Nigeria can be challenging.
According to Yusuf, the Central Bank of Nigeria is struggling to attract portfolio investors and push up interest rates, which is affecting domestic investors.
The LCCI DG wants more structured funding for the Manufacturing SMEs in the country.
Economic Condition and Purchasing Power
The Buhari administration according to Mr Muda Yusuf will have to give top priority to resetting the economy, in a way that works for Nigerians.
Inclusive growth should be pursued that can translate to an increase in the purchasing power parity of Nigerians.
With the right economic policies in place Nigerians will be able to purchase manufactured goods, because of an improvement in their income.
Action on Executive Order on Patronage of Locally Produced Goods
The Executive Order signed by the Buhari administration in its first term, focused on “Patronage of Locally Produced Goods” and was well appreciated by local manufacturers as it dovetailed into a “Made in Nigeria” policy.
LCCI’s Yusuf believes the FG should put more effort into the area of implementation across government agencies at the Federal, State and Local levels.
He believes that the effective deployment of the Executive Order on the patronage of locally produced goods , could become a game changer for the manufacturing industry.
Nigeria’s Manufacturing GDP
According to the National Bureau of Statistics, the Q4, 2018 Gross Domestic Product(GDP) figure for the Manufacturing Sector was 8.75%.
This showed improvement but emphasized the need for policies and initiatives, that will boost Manufacturing as key drivers of economic growth.