The decline in manufacturing activities is one that gives a lot of concern to the citizens of Nigeria in an honest democracy setting.
As a result, there is massive importation of food, medicines, refined petroleum products and various goods across the spectrum of economic activities. No wonder then that the value of the Naira continues to diminish against major foreign currencies, thus fuelling local inflation.
The main cause of this decline is the corrupt and inept political leadership the country has had over the years. The political class has instituted a perverse value system of get-rich-quick in which import trade in finished goods and public embezzlement are preferred.
The public corruption ensures there is lack of basic infrastructure of electric power, potable water, good roads and railways which are very necessary for the support of manufacturing.
Laying out adequate infrastructure presupposes good planning, which is never lacking, but the plans are often not adhered to.
Most of the industries in Nigeria are set up through the funding and technologies of foreign companies. The raw material inputs are designed to be imported such that there is perpetual demand for foreign exchange to import them; the factories shut down if foreign currencies are unavailable or too expensive to purchase.
Examples of such companies were local tomato manufacturer, Erisco Foods Limited which shut down its N4 billion tomato paste processing plant in Oregun, Lagos State. The company’s President, Mr. Eric Umeofia, said it closed down its 450,000 tonnes tomato plant and sacked 1,500 workers out of its 2,520 entire workforce and moved its operations to China. According to Umeofia, this is due to the refusal of CBN to allocate forex to the company for importation of raw materials.
Another company, Dag Motorcycles Industries Nigeria Limited, the assemblers of Bajaj tricycles and motorcycles, was forced to cut down its 1,000 per day production capacity by 40 percent and terminated some of its staff.
With poor leadership, there is also poor emphasis on research and development of raw materials, manufacturing technologies and equipment fabrication.
Another impediment to manufacturing is unfair trade practices of industrialized countries: the grant of subsidies to their factories that, in turn, dump their products in Nigeria, thus out-competing the local industries to death.
Most industrial concerns in Nigeria are single proprietor businesses with very little capital. Accessing funds for expansion or to cope with difficult business cycles is a problem that ensures their demise.
Fraud and low productivity among employees of manufacturing outfits also contribute to de- industrialization.
In order to revive manufacturing, the following remedies are mandatory:
The enthronement of honest democracy that will throw up accountable political class.
With an accountable political class, there will be good industrial plans that will be faithfully implemented. The Rule of Law will be enforced to curb corruption both in the public and private sectors.
A responsible government will also encourage sound education and research and development.
One of the dividends of honest democracy is invariably dependable infrastructure that will support local manufacturing.
Public enlightenment for the patronage of local goods and services is also important; so is the tackling of foreign unfair trade practices.
The public will also be encouraged to invest in shares on the local stock exchange to ensure more equitable distribution of wealth while supporting local industries with cheaper capital.