Anna Okon
Researchers have identified a number of factors that will help to improve the quality of raw materials and products in the country.
According to them, the quality of raw materials will determine the value of locally manufactured goods.
In its 2016 report, titled ‘National Strategy for Competitiveness in Raw Materials and Product Developments in Nigeria’, the Raw Materials Research and Development Council observed that although the Nigerian economy had grown tremendously over the past years with huge foreign exchange from oil and agricultural output, the growth had not translated into economic diversification.
The reason for this, the report stated, was because Nigeria was still heavily dependent on commodity production and exports, especially crude oil and gas with little value-addition and limited forward and backward linkages to other sectors.
It noted that the design of a national strategy for Nigeria’s competitiveness in raw materials and product development was an attempt by the Federal Ministry of Science and Technology to address the challenge of developing and implementing effective policies and strategies to diversify the economy, promote industrialisation and economic growth.
The aim, the report stated, was to reduce over time the importation of raw materials and products that the country had competitive advantage to produce.
It stated in part, “The potential to meet national demand, irrespective of items will lead to import reduction by 4.0 per cent to 20 per cent in the short, medium to long term.
“This import reduction can be surpassed if conscientious efforts are made to strengthen the industrial sector and promote competiveness.”
While speaking during the roundtable conference on national strategy for competiveness in raw materials in Lagos, the Director-General/Chief Executive Officer, RMRDC, Dr. Hussaini Ibrahim, said that for made-in-Nigeria goods to be competitive both nationally and internationally, the raw materials had to be competitive in quality and price.
The Director, Bioresources Technology Development, Federal Ministry of Science and Technology, Mr. Abayomi Oguntade, said the objective of the programme was to spur the manufacturing sector into spearheading Nigeria’s drive towards global competitiveness in order to provide the nation with indigenous quality raw materials and products in areas where the country had competitive advantage in.
“The nationalistic dimension is for Nigerian scientists and researchers in collaboration with industries and businesses to induce indigenous industrial revolution that is irreversible and defines our national pride and confidence in self-defence, food security and socio-economic growth and development,” he said.
Also speaking at the event, a professor of economics and Director, Institute for Development Studies, University of Nigeria Enugu Campus, Osita Ogbu, maintained that unless the local manufacturing sector was able to contribute 30 per cent or more to the Gross Domestic Product, the nation might not make progress.
He said the only way this could be achieved was to limit the importation of raw materials and develop the materials locally.
To enhance competiveness in local raw materials and product development, the report recommended that there should be periodic engagement with stakeholders in the manufacturing and the Small and Medium Enterprises sector on policy issues of manufacturing for consistency in government policies with particular reference to the food and beverage sector.
Many Nigerian manufacturers depend solely on imported raw materials for their production. This is in spite of the fact that the country is blessed with abundant natural resources that could be turned into raw materials for the manufacturing sector.
This trend of dependency on imported raw materials has thrown the sector into crisis at various times when the foreign exchange becomes scarce and the Central Bank has to ration supply.
For instance, in 2016, as a result of restriction of importers of 41 items from access to forex through the official window, most operators in the sector shut down their factories and sacked thousands of workers.
The argument of the apex bank is that most of the items being imported into the country can be sourced locally.
For instance, it was reported that in the cement and sugar industries, despite the country’s abundant limestone and sugar plantations, manufacturers imported cement and sugar dust/crystals and repackaged same for sale in the local market.
The RMRDC, in its compendium of imported raw materials indicated that about 8.8 billion kilogrammes of sugar/sugar confectionary, amounting to N897.2bn, was imported into Nigeria in 2016, while N309bn was spent on cement, limestone, earth, salt plastering materials and others.
In the same vein, when the government hiked the duty on imported cars to encourage local production of vehicles in the country, the policy failed to achieve its aim of limiting importation and rather cost government loss of revenue through the ports, according to the Chairman, Oris Velvet Autos, Chief Alfred Omoghiade.
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