Anene: How Nigeria Can Rediscover Its Potentials through Industrialisation

Nigeria has all the requirements to be a world class industrial giant. But year after year, Nigeria keeps moving up and down the scales among the worlds top 10 poorest economies with high unemployment rates and next to zero industrial development. In this interview with the  Chairman Linea Group of Companies, Mr Eloka Anene he explores industrial potentials of Nigeria and analyses the reasons for the country’s poor performance in the industrial sector, while suggesting solutions garnered from years of hands-on experience as an industrialist in Nigeria.

TELL US ABOUT THE LINEA GROUP OF COMPANIES

The Linea Group is a diversified conglomerate with interests in manufacturing, construction, pharmaceuticals, and energy. We have been involved in manufacturing for nearly two decades. Linea Miles Industries specializes in producing a variety of wood products for both domestic and export markets.

In addition to manufacturing, we are engaged in construction and infrastructure development. Linea Group also distributes pharmaceuticals and fine chemicals in bulk. In the energy sector, we procure and supply oilfield equipment and tools. One of our subsidiaries has recently ventured into renewable energy, recognizing its importance for the future. Our manufacturing unit is one of the first sustainable manufacturing facilities in Nigeria, contributing to reducing the environmental impact of production and aligning with the United Nations’ 2030 net-zero emission goal.

Through the skilled leadership of our industrial team, we have successfully navigated the challenges faced by the manufacturing sector in Nigeria. Despite difficult operating conditions, we have continued to grow, increasing production volumes and expanding our sectoral involvement. Our commitment to production-oriented enterprises has been a key driver of our sustained growth. Our involvement in manufacturing has also had significant economic and social benefits for our investors, employees, partners, and the broader community.

WHAT HAS BEEN THE SECRET OF YOUR SUCCESS?

As mentioned earlier, our enterprise is dedicated to fully leveraging the potential of the manufacturing and production sector. This aligns with our mission to distribute the resulting wealth and benefits across all economic levels in Nigeria.

Overcoming the challenges inherent in Nigeria’s manufacturing sector can lead to substantial profits. However, success requires a strategic approach. Effective leadership, rigorous micro management, and the right talent are essential. Sourcing raw materials locally can be complex, often involving supporting suppliers or creating internal sub-chains for production or importation.

Consumer targeting is crucial. For high-end markets, quality and marketing are paramount. For low-income segments, affordability and accessible packaging are key. By addressing these factors, you can achieve significant profitability in Nigeria’s vast market.

While we’re currently focusing on the domestic market, our long-term goal is to enter the export market fully. This is a key driver of economic growth for major nations. By successfully exporting our products, we aim to contribute to Nigeria’s economic development.

WHAT CHALLENGES DO YOU FACE AS A MANUFATURER IN NIGERIA?

Manufacturing in Nigeria faces numerous setbacks that deter many investors from venturing into the sector. Among the most critical challenges are inadequate power supply, scarcity of raw materials, and high interest rates from banks. Electricity is a fundamental requirement for any industry. Nigeria, despite its population, resources, and oil wealth, remains one of the few countries globally struggling to generate sufficient electricity. Frequent nationwide power outages, lasting for days, due to breakdowns in generation and distribution systems, disrupt manufacturing operations. To mitigate these disruptions, entrepreneurs often invest heavily in generators and diesel fuel, which significantly increases production costs and limits market competitiveness.

Raw material scarcity is another significant obstacle. The lack of support for local sub-processors has led to a reliance on imports, which is further complicated by foreign exchange shortages and cumbersome customs procedures. Additionally, Nigeria’s deteriorating road infrastructure poses significant transportation challenges, resulting in frequent accidents, delays, and losses due to damaged goods. High interest rates from banks and burdensome taxes impose additional financial strain on businesses. Moreover, the human factor, including the need for micro-management and dealing with inefficient or moribund institutions, presents operational challenges. Given these formidable obstacles, it is a testament to the resilience of Nigerian manufacturers that some have managed to survive. However, it is essential to acknowledge and address these challenges to create a more conducive environment for industrialization and economic growth.

WHAT DO YOU THINK THE COUNTRY IS MISSING OUT ON BECAUSE OF POOR INDUSTRIALISATION

Until Nigeria prioritizes industrialization, the country will remain trapped in poverty. Industrialization will create jobs, absorb the vast number of unemployed youth, and provide a source of income and livelihood. It will transform the nation’s energy into a force that propels it from a cesspool of poverty to a world-class economy. Countries like Japan and China were once in similar situations. Today, thanks to industrialization, they have surpassed Western economies and paved the way for other Asian countries like Korea and India. There’s no reason why Nigeria cannot follow suit.

Industrialization will open Nigeria to the export market, offering alternative sources of foreign exchange beyond oil. It will reduce the cost of goods and services, improving the standard of living. This will lead to a more equitable distribution of wealth, increasing per capita income and creating a substantial middle class. A strong middle class is essential for meaningful socio-economic development.

Industrialization will also enhance healthcare and education, producing a more skilled workforce. Additionally, the increased tax revenue from industries will fund better infrastructure development. In essence, Nigeria’s future prosperity depends on its commitment to industrialization. Moreover, the country possesses the resources necessary to achieve this goal.”

WHAT DO YOU THINK THE COUNTRY NEEDS TO DO TO BUILD ITS MANUFACTURING SECTOR?

You see, we need to begin to demystify that question. It is as simple as ABC! A few years back, what you call Dubai today was just a heap of sand dunes in the midst of nowhere! What made all the difference? Just proper application of economic metrics. To improve its manufacturing sector, Nigeria can take several strategic steps. First, enhancing infrastructure is crucial, this includes investing in reliable power supply and efficient transportation networks to reduce operational costs and improve logistics. Also increasing access to finance for manufacturers will enable them to invest in technology and expand their operations. This can be achieved through favorable lending conditions and financial products tailored for the manufacturing sector. And then developing a skilled workforce through vocational training and partnerships with educational institutions will ensure that the labor force meets the demands of modern manufacturing. Additionally, creating a stable policy environment that encourages local sourcing and innovation can help manufacturers thrive. By focusing on these areas, Nigeria can significantly strengthen its manufacturing capabilities, leading to economic growth and job creation.

GIVE US A GLIMPSE INTO YOUR COMPANY’S CSR INTERVENTIONS

The Linea Group and all its subsidiaries are deeply involved in the economic empowerment of young people. Our woodworking industries operate a training program that imparts skills in woodworking and construction for young people who exhibit the talent and resourcefulness required to become professional craftsmen. We train them for free and employ some of them. Others we empower with tools and capital grants to set up their own businesses. Even when they work independently, we ensure their continued success by sub-contracting them for various construction, interior décor, and furnishings projects for our clients, both locally and internationally. Many of these trainees have grown to become employers of labor themselves. We also supply imported woodworking materials to some of our trainees who are involved in trading, on a credit basis. This way, they keep their profits and return the cost price to the company, ensuring their continued business viability. We have nurtured numerous entrepreneurs through this intervention.

We offer a flexible training program for students, allowing them to maintain their logbooks and come in when they can to receive training at their own pace. This enables us to train students from universities, high schools, and unemployed graduates. Our objective is to equip them with skills that will enable them to earn a living if other aspirations fail. Many of them end up working in the construction and interior décor sector at various levels. Some have advanced to becoming construction contractors based on the skills acquired from us. We are also exploring other areas of intervention, such as agriculture and information technology. Our methodology is to provide a conducive and reliable environment where people can train at their own pace, free of charge. After acquiring adequate hands-on skills, they can seek employment or start their own businesses. We provide business equipment, tools, and inputs. Giving back to society is a core value at the Linea Group, and we are strongly committed to social responsibility.

QUOTE

“Manufacturing in Nigeria faces numerous setbacks that deter many investors from venturing into the sector. Among the most critical challenges are inadequate power supply, scarcity of raw materials, and high interest rates from banks. Electricity is a fundamental requirement for any industry. Nigeria, despite its population, resources, and oil wealth, remains one of the few countries globally struggling to generate sufficient electricity. Frequent nationwide power outages, lasting for days, due to breakdowns in generation and distribution systems, disrupt manufacturing operations. To mitigate these disruptions, entrepreneurs often invest heavily in generators and diesel fuel, which significantly increases production costs and limits market competitiveness.”