Rebuilding FG’s Collaboration with Nigerian Industrialists

A new wind that will strengthen collaboration between the federal government and the organised private sector that will enable the government to respond with appropriate policies to the challenges of manufacturers has started blowing, writes Dike Onwuamaeze

The large turnout was an indication of the importance stakeholders in the Nigerian industrial sector to the opportunity to engage with the federal government.  

The meeting was the, “Town Hall Meeting with the Minister of State for Industry, Senator John Owan Enoh,” which was organised in Lagos by the Manufacturers Association of Nigeria (MAN) and members of the Organised Private Sector of Nigeria (OPSN), on Wednesday, December 5, 2024.

It was their first opportunity to interact exclusively with a cabinet minister entrusted with overseeing the country’s industrial sector since the inception of President Bola Ahmed Tinubu’s administration.

Presenting an “Overview of the State of the Industrial Sector,” which was focused on discussing the manufacturing sector’s critical roles, pressing challenges and solutions, the Director General of MAN, Mr. Segun Ajayi-Kadir, emphasised that manufacturing is the backbone of the Nigerian industrial sector that included construction, utilities, mining and quarrying. Ajayi-Kadir stated that manufacturing contributed 46.5 per cent of Nigeria’s industrial output in the first nine months of 2024.

He added that manufacturing sector also contributed $55,74 billion out of the $118.22 billion value addition that was recorded by the Nigerian industrial sector in 2023.  

He said: “Clearly, manufacturing is the most vibrant sector of any industrialised economy, considering its cross-cutting linkages with all other sectors and if prioritised, Nigerian manufacturing can generate a minimum of $6.72 billion of foreign exchange and contribute over 80 percent of non-oil export.

“Therefore, the structural change engendered by higher value-added manufacturing operations is the essential route for our economy to achieve higher income level and better quality of life for Nigerians.”

He added that manufacturing is a major contributor to the GDP, export earnings, foreign direct investments, technological advancement, innovations and diversification of the economy.

“Manufacturing industries are labour-intensive and create numerous jobs, both directly and indirectly. Manufacturing requires a skilled workforce, which encourages education and training, leading to a more skilled labor force.

“Manufacturing industries support the development of local supply chains, which lead to the growth of other sectors such as services and agriculture.

“Research and development (R&D) in manufacturing have spillover effects on other sectors, driving overall technological progress within an economy,” Ajayi-Kadir said.

Yet, he told the minister of state that in spite of these critical roles, Nigeria’s manufacturing sector has declined over the past few decades due to difficulties that have hindered investments from local and foreign investors. “These difficulties include insufficient funding, infrastructure deficit, skills’ shortage, poor access to foreign exchange, inefficient supply chain, heavy dependence on imported raw material and insecurity.

“Others are unstable economic indicators, high inflation rate, electricity challenges, Naira devaluation and multiple taxations. These have led to closure of companies. For instance, in 2023 alone, 767 manufacturing firms had to shut down their operations nationwide.

“Therefore, revitalising the industrial sector would require focused interventions across several critical verticals that would include the creation of financial instruments and mechanisms that provide affordable credit to manufacturers; offering incentives for banks and financial institutions to lend to the manufacturing sector, especially Small and Medium Industries (SMIs). It would also includeensuring market access and trade facilitation by assisting manufacturers in obtaining international quality certifications that would enhance their competitiveness,” he added.

Ajayi-Kadir noted that Nigerian textile manufacturers have been driven out of the local market by unwholesome business practices like product counterfeiting, excessive importation and smuggling of textile products

He also made key actions recommendations to the Federal Government of Nigeria to revitalise the country’s industrial sector. They are effective budgetary allocation, promotion of patronage for Made in Nigeria products, initiating measures that would promote foreign exchange liquidity, energy and tax reforms, attracting foreign investments and reduced interest rates.

“Federal Government of Nigeria should facilitate investment in the modernisation and reinforcement of the power infrastructure, including feeders, transformers, and distribution networks, to reduce technical losses and improve the reliability of power supply,” he said.

Speaking during the town hall meeting, the Director General of Nigerian Association of Small Scale Industrialists (NASSI), Mr. Chris Oputa, said that access to finance is one of their biggest challenges.  Oputa, therefore, called for a five year real industrial development plan for Micro, Small and Medium Enterprises (MSMEs).

“In that five year plan, all banks in Nigeria must be compelled by law to dedicate 50 per cent of their credits wholly to the MSMEs,” he said.

He argued that 90 per cent of the jobs in the Nigerian economy are being created by the MSMEs, which are the engine room of the country’s economy.

He also observed that it is only people that are engaged in criminal activities that hide what they are doing and regretted that in Nigeria, the MSMEs are constrained to hide what they are doing even though they are not criminal activities.

He, therefore, tasked the government to initiate measures that would bring the activities of the MSMEs into the open so that their businesses, especially their export activities, would be regularised. Otherwise few people would be overburdened with taxations as the government would have no chance to see what the real operators of the economy are doing.

Similarly, the Director General of Nigerian Employers’ Consultative Association (NECA), Mr. Adewale-Smatt Oyerinde, told the minister of state that he was interacting with the real bodies that made up the Nigeria organised private sector. He frowned at occasions the government would parley with few billionaire businessmen and claimed that it has consulted the OPSN.    

In his contribution, the Executive Secretary of Nigerian Association of Small and Medium Enterprises (NASME), Mr. Eke Ubiji, asked the minister to revive the forum the OPSN used to have dialogue with the government, adding that the SMEs and other operators in the economy are really suffering.  

The Director General of the Raw Material Research and Development Council, Professor Nnanyelugo Ike-Muonso, emphasized the need to save the Nigerian economy from being trapped in colonial structure.  He said that legislation is ongoing on a law that would ban the exportation of raw materials that have not attained a minimum of 30 per cent value addition.

After listening to various presentations that were made by the industrialists and members of the OPSN, the Minister of State for Industry, Senator John Owan Enoh, assured that he would be their ambassador and champion. Enoh said that President Bola Ahmed Tinubu was intentional in designating him as the minister in charge of the industrial sector after the recent cabinet reshuffle. Tinubu’s intention is to have someone that will be dedicated to industry.

He remarked that the challenges of the industrial sector have always been the same perennial problems and promised that his tenure would bring a way forward out of these recurring challenges.  

 “For me this session can only make sense if we can make a movement. I see myself as having an opportunity to make a positive change because I am the Minister of State for Industry to provide leadership for the sector.  The minister will not be absent anymore when conversation that has to do with the sector is being made,” he said.

According to him, no country has been able to transit from developing to developed economy without strong industrial sector.

Enoh said: “Therefore, Nigeria is going to be more intentional in developing its industrial base like India and China that attained their present status as one of the world’s industrial giants through conscious and deliberate implementation of policies.  

 “I say this as a statement of intent that we have an opportunity for a new beginning together. To take one step together; to take second step together in building a sustainable partnership. That is what that will make sense.

“We are not just coming to talk and make recommendations. We have to come and review key progress that has been made from these recommendations.  

“We are trying to do industrial push at a season of constraints but challenging moment like this gives us the opportunity to even do much better and make tremendous progress. We have to be strategic in what we offer. We will not make it business as usual.”

The minister of state said that there would be a multi-stakeholders’ forum to be co-chaired by himself and the President of MAN, Mr. Francis Meshioye. The forum would foster a deliberate inter-ministerial collaboration because, “We cannot make progress alone. He also assured that the stakeholders’ engagement would henceforth be held quarterly.

“I am greatly concerned with what is practical. I am very concerned with what is real. I am very concerned with actions that can give us results.

“That is what this country is in dire need of. Nigerian people cannot wait to see results. I believe that by working together we will be able to achieve these results.

“The key thing to me is that there is a new regime that understands and appreciates the value of proper engagement. There must be clarity, actions and results.  

“This is a time for realism. It is not for much talk. Like I have said the challenges are so significant. I am not going to promise of instant solutions. I would not do so.

“But I can bet is that I am going to commit to visible actions that are going to be supported by timelines and measurable results.  We need to make sure that every commitment is achievable and impactful. Not promising too much but promise those things that are achievable.”