CPPE laments declining presence of local manufacturers

As the nation celebrates 26 years of its return to democracy, today, the Centre for the Promotion of Private Enterprise (CPPE) has expressed concerns over the declining presence of indigenous manufacturers, as compared with the growing dominance of foreign-owned manufacturing firms, in the nation’s manufacturing sector.

The Centre, in a statement issued on Thursday, argued that while foreign direct investment is welcome, and remains highly beneficial to the economy, it however noted that the declining relative presence of indigenous manufacturers raises important concerns about local industrial capacity, domestic entrepreneurship and economic sovereignty.

It warned that an industrial ecosystem that increasingly relies on foreign ownership, without simultaneously nurturing indigenous industrial champions, such as Nigeria’s, risks weakening the foundations of sustainable industrial development.

The centre also expressed concerns that 26 years after the return to democratic governance, Nigeria’s manufacturing sector still remains largely trapped in a low-growth equilibrium.

“The sector’s contribution to GDP has hovered around 9–10 per cent for most of the period, underscoring the absence of a decisive industrial transformation despite successive policy pronouncements and reform initiatives.

“Industrialisation is the engine room of economic transformation. It creates quality jobs, deepens value addition, strengthens export competitiveness and reduces vulnerability to external shocks. Yet, Nigeria’s democratic journey has delivered only modest industrial outcomes, leaving the economy heavily dependent on primary commodities and imports,” it argued.

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The centre expressed regret that the sector has continued to witness progressive erosion of industrial capacity across several sectors, citing the collapse of the nation’s public refineries as the most striking example.

It argued that the refineries, which should have been strategic industrial assets, suddenly became victims of poor governance, policy failures, weak accountability and entrenched rent-seeking, deteriorating, over time, into symbols of institutional dysfunction.

“The story is similar across several manufacturing sub-sectors. Textile mills that once employed hundreds of thousands of Nigerians have largely disappeared. The tyre industry collapsed. Battery manufacturing faded. Automobile assembly plants lost momentum. Many industrial clusters that once drove economic activity have either contracted significantly or vanished altogether.

The consequence has been a gradual weakening of Nigeria’s industrial base and a growing dependence on imports for products that were once manufactured domestically,” it added.

The Centre, however, noted that despite the challenges, a few sectors, such as the cement industry and the food and beverage sectors, have been able to demonstrate remarkable resilience.

It also described the emergence of the Dangote Refinery as representing the most transformative industrial investment in Nigeria’s recent history, noting that the project has demonstrated the scale of industrial ambition required to reposition Nigeria as a major manufacturing and processing economy.