The private sector plays a key role in pushing for a well-developed manufacturing sector through investment inflow, a continuous cycle of activities, higher capacity utilization, etc. However, to achieve the peak of development, Nigeria’s manufacturing sector will require increased participation from the private sector and the provision of an enabling and business-friendly environment from the government.
This was noted in The Nigerian Economic Summit Group’s report on ‘Sectorial Reforms and Investments in Nigeria: A Focus on the Manufacturing Sector’. According to the NESG report, Nigeria’s manufacturing sector is crucial to economic development because its 13 sub-sectors have the potential to create jobs and reduce poverty taking a cue from other developed countries.
Data from the National Bureau of Statistics (NBS) show that the sector is Nigeria’s third-largest in providing employment, having employed at least 5.4 million people in 2017. However, the sector is constrained by various challenges ranging from unfriendly business policies to high production cost, epileptic power supply, dismal infrastructure, among other issues all of which have caused stunted growth and low capacity utilisation for sector players.
“The cost of not implementing crucial reforms to reposition the sector for competitiveness is evident in the weak state of the sector and Nigeria’s high unemployment and poverty rates,” the report states. The country’s current situation requires urgent intervention by the government to develop the industrial sector in Nigeria, It becomes imperative that there is synergy and consolidation of efforts from all government ministries, departments, and agencies involved in developing the sector.”
The report also adds that Nigeria’s manufacturing sector has numerous favourable conditions for investment inflow including a large market, strategic location, and abundance of natural resources. However, the investments can only be realised when there is an intersection of market opportunities and government support.
“For these opportunities to fully materialize, crucial actions are required by the government, which include developing industrial policy and sectorial plans for identified priority areas, ensuring commitment to the implementation of existing plans, addressing the challenge of insecurity, and providing targeted infrastructure,” it recommends.