The President of the African Development Bank Group, Dr. Akinwumi Adesina, has said that inadequate power supply is negatively affecting the growth of Nigerian industries.Speaking at the meeting of the Manufacturers Association of Nigeria (MAN) on Tuesday in Abuja, Adesina said: “Today, no business can survive in Nigeria without generators.”
“Consequently, the abnormal has become normal. Unless Nigeria decisively tackles its energy deficiency and reliability, its industries will always remain uncompetitive.”
Dr. Adesina, who was a former Minister of Agriculture in Nigeria lamented the country’s failure to diversify its export base to high-value market products, adding that the country has focused more on replacing imports and saving the naira rather than deliberately pursuing wealth creation and value-added manufacturing.
He noted that Nigeria has failed to position itself for economic growth and achievements, the type attained by developing countries like Vietnam and Malaysia.
“While for decades the share of manufacturing in Nigeria’s GDP, has hovered around 7%, the nation has not been able to extricate itself from the comatose of its industrial manufacturing sector to unleash the fullness of its potential.
“The performance of the manufacturing sector in the past five years have been poor. Between 2015-2017, the sector declined by -1.5%, -4.3% and -0.2%. This is in sharp contrast to the dynamic and rapid performance of manufacturing in Asian countries, such as Singapore, Malaysia and China.
“While Asian countries have focused on the export of manufactured products, Nigeria’s approach has been on import substitution. The manufacturing sector of Nigeria represents only 3% of total revenues from exports, but accounts for 50% of imports in the country. Instead of being forward looking in expanding the share of the manufactured goods in its total export revenue, Nigeria focuses on the model of import substitution.
“Import substitution, while important, is a very restrictive vision. It looks towards survival, instead of looking to create wealth through greater export market and value diversification. The end result is a manufacturing sector that cannot develop nor compete globally, but limits itself to “survival mode, not a “global manufacturing growth mode,” local media reports on Wednesday quoted Adesina as saying.
According to Adesina, Nigeria must have a greater ambition for its manufacturing sector by integrating and rapidly moving up global and regional value chains in areas of comparative advantage; “by and by driving greater specialisation and competitiveness”.
In her speech at the meeting, the Director-General of the World Trade Organisation, Dr. Ngozi Okonjo-Iweala noted that trade was a key part in the global economic recovery and called for more support for micro, small and medium enterprises.
“Poor countries need access to bigger markets to grow rapidly. With trade projected to grow at 10.8 percent this year, more than twice as fast as GDP, external demand will far outpace domestic demand for many countries, especially those on the wrong end of the k-shaped recovery.
“For Manufacturers, trade is also important because they need better access to imports as well as competitive logistics and other services critical to international competitiveness.
“Digital is very important here, especially for young Africans and the businesses they create; many businesses have been able to weather the pandemic because they were able to access the Internet and sell online.
“We should work harder, first to understand the barriers facing micro, medium and small enterprises in global trade and then to lower these barriers,” she said.