Nigeria’s declining industrial production

NIGERIA’s industrial value dropped by 41 per cent between 2012 and this year, the African Development Bank (AfDB) indicated last Wednesday. Delivering a keynote address  at the opening ceremony of the 2018 annual meeting of the AfDB at the Busan Exhibition and Convention Centre, South Korea, its president, Dr. Akinwumi Adesina, revealed that the African continent lost a total of $72 billion between 2012 and this year, with Nigeria, South Africa, Egypt and Algeria accounting for most of the drop in value added through industrial production. This loss of industrial production value, the AfDB boss noted, was responsible for massive unemployment on the continent. He added that the bank planned to invest over $35 billion in the next 10 years in a bid to reverse the de-industrialisation trend.

Adesina said: “Between 2012 and 2018, Africa’s industrial value added declined from $702 billion to $630 billion, a loss of $72 billion. Among countries with the largest industrial output, industrial value added dropped sharply by 41 per cent in Nigeria, 26 per cent in South Africa, 64 per cent in Egypt and 67 per cent in Algeria. But some are doing well. Morocco’s industrial output expanded in the period by 16 per cent, as it became the hub for global aeronautical companies. Ethiopia witnessed a fivefold increase in its industrial value added, driven by its heavy investments in industrial parks, special economic zones, and strategic partnerships with Chinese companies for its leather industry, and with global textile and garment companies.”

From the statistics provided by the AfDB president, it is evident that Nigeria accounted for a fairly large drop in industrialisation  value in the period under study. That being the case, the conclusion is inevitable that successive administrations  have, in spite of their rhetoric, not only failed to provide an enabling environment for industrialisation to thrive but also compounded the woes of the sector. The tragedy is therefore two-fold: whatever level of production the country had in the manufacturing sector in 2012 was far from satisfactory, yet the government has forced a decline from it in the last six years. If the government was not going to add anything positive to the industrial sector, at least it should have ensured that the situation did not degenerate further. That it failed to do this is nothing but a tragedy.

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To be sure, the fact remains that a vibrant manufacturing sector is sine qua non to national development whether or not the government thinks so. The point has never been in doubt that the country can only develop if it boasts of a vibrant manufacturing sector. Sadly, only last year, the Minister of Agriculture, Chief Audu Ogbeh, waxed lyrical about the exportation of yams to foreign countries. According to him, “the Federal Government’s position is that we are exporting yams and we will continue to export yams because we are the biggest producers in the world and we should be the biggest exporter. While people are talking now, the rest of the world has given us notice that about 10 years from now, we won’t be selling much oil. And if people want to wait till then to look for what to export, the crisis then will be worse than what we have now. And when we want to do it, we look like the enemies of this country. We feel sorry for those who are so ignorant; they don’t understand, but we will continue until we take over the world market.” The minister did not indicate that the government had any plans to provide a climate for the extractive industries to create a value chain from the country’s yam produce. It was enough, in his estimation, that the country was ready to profit from primary production. This is surely a road to nowhere.

The country would be engaging in self deceit if it thinks that it can make any realistic progress without sustained industrial production. The federal and state governments, if they want the nation to move forward, must shed the idea behind their “back to agriculture” mantra. The idea rests on primary production and casts the country as a flippant player in the global market. The days are past when anyone should be talking of, say, recreating the famous groundnut pyramids for export. The pyramids, if the country succeeds in bringing them back, will not amount to much unless they are utilised in local industries. Those industries have to exist and remain in business. Unless and until the country is  ready to move into the modern system, any talk of achieving some nebulous sustainable development goals (SDGs) would be completely empty. The way forward, therefore, is for the government to re-engineer its policies and programmes and move the country from primary to industrial production. At the very minimum, it must be serious about improving the power sector. Many of the companies which folded up did so because of the power problem. You either produce or perish. There’s no two ways about it.