Business magnate and President of Dangote Group, Aliko Dangote says priority investments in infrastructure and core industries will boost Nigeria’s economy to its desired level to compete among contemporary nations of the world.
In his address as Guest Speaker at the landmark 50th Annual General Meeting of the Manufacturers Association of Nigeria (MAN) and the 2nd Adeola Odutola Lecture held in Lagos on Monday, Dangote expressed optimism that with the collective effort of all stakeholders, it is possible to move Nigeria from “developing nation” to “newly industrialized nation”.
Against the background of the declining fortune of the manufacturing sector, the Africa’s wealthiest man urged the Federal Government to employ strategic Investments in infrastructure to reverse the trend and boost Nigeria’s economy.
“It is imperative that the familiar challenges limiting the pace of industrialisation are frontally addressed while setting a clear-cut agenda for the next 10 years.”Dangote said.
The foremost Nigerian entrepreneur advocated jail terms for dealers in prohibited smuggled products, such as textile materials, in order to discourage imports and boost local production in the textile industry. For legislative backup, he also sought the enactment of a law prohibiting the sale of imported fabrics in the country.
Dangote identified investment in infrastructure; creation of business-enabling Policy Framework; development of core industries; macroeconomic stability; facilitation of sectoral linkages and sustaining of the federal government’s recent efforts at ensuring security of lives, properties and investments across the nation as measures that are needed to be put in place to allow Nigeria fast-track its industrialization process and development growth.
The business magnate examined the performance of the industrial sector in Nigeria and identified the link between industrialization and economic development with Nigeria and China as case studies while analyzing the manufacturing sector in the country with focus on its growth trajectory, current status and challenges, and set an agenda for the next ten years with an implementation roadmap.
According to him, “the experience in various parts of the world has shown that industrialization drives economic growth & development, which improves living standards as evident by the high output and per capita income in industrialized countries.
“The rate of industrialization in Nigeria has been slow as evidenced by the low contribution of manufacturing to GDP, poor capacity utilization 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 industrialization 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.”
According to Dangote, “Nigeria’s manufacturing sector is dominated by light manufacturing with only a few firms operating in the heavy segment of the sector.
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 (the manufacturing sector is beset with over thirty statutory taxes, levies, fees, etc. charged at multiple tiers of government), and insecurity.
“In consideration of the afore-mentioned challenges, there is an urgent need for a shift in policy approach and strategy to reposition the manufacturing sector for growth over the next ten years. It is imperative that the familiar challenges limiting the pace of industrialization are frontally addressed while setting a clear-cut agenda for the next 10 years.” Dangote noted”
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