The minister of finance and coordinating minister of the economy, Dr. Ngozi Okonjo-Iweala yesterday said her ministry was interested in raising the manufacturing sector from the many problems and challenges bedeviling it to ensure that the sector contributes meaningfully to the nation’s gross domestic product (GDP) and employment creation.
The minister said this at the 44th Annual General Meeting (AGM) of the Ikeja branch of the Manufacturers Association of Nigeria (MAN) in Lagos yesterday.
Okonjo-Iweala who also heads the President Goodluck Jonathan administration’s economic management team was represented by the minister of state for finance, Dr. Yerima Agoma at the event which was themed, “ECOWAS Common External Tariff: Potential Implications for the Manufacturing Sector.”
The minister said, “The manufacturing sector is very important to the development of our economy and self reliance. The president is very interested in raising the sector to attain its former glory. I can assure MAN today that the federal government is already putting plans in place to restoring this sector.”
She added, “If we are to generate employment and increased the sector’s contribution to the national GDP, then we cannot but come headlong with the many problems that the manufacturing sector is having today.”
Over the years, the sector’s contribution of to the GDP has dropped significantly from 15 per cent in the 1970s to about 4.21 per cent in 2010. Hundreds of manufacturing concerns have closed shop in the country and converted to places of worship and event centres. The capacity utilisation has also nosedived from 70 per cent in the 1980s to 45 per cent in 2010.
Earlier in his presentation, the president of MAN, Chief Kola Jamodu, said that implementation of the ECOWAS common external tariff (ECET) which commences next year, presented a mixed situation which required that care must be taken by the federal government.
He said, “We are aware that full implementation of the ECET is expected to commence in 2012. Its operation in the past has witnessed high and low points in the Nigerian economy. If not carefully implemented, it will further add hardship to manufacturing, which I’m sure, is not the intention of the President.
“Happily, the challenges being faced by the manufacturing industry which is a leading sector in the provision of employment is being addressed in the agenda of the current government.”
While noting that MAN was working to enhance its interface with governments at all levels as well as upgrade capacity and infrastructure within the body, Chief Jamodu said all incentives from the government, including waivers would now be sector-based.
In his welcome address, the chairman of the Ikeja branch of MAN, Rev. Isaac Agoye, said it was worrisome that key operational challenges identified at the previous AGM were yet to be properly addressed by the government, with the economy being gradually exposed daily to international and regional trade threats associated with the full implementation of the European Economic Partnership Agreement (EPA) and ECOWAS common external tariff.
“The partial implementation of these trade agreements and regional uniform tariff system is currently throwing up fresh challenges that could further strangulate the manufacturing sector,” he said.
“It is discouraging to literally bring to our attention annually the fact that the manufacturing sector did not fare well again in 2010 due to familiar business environment related and operational challenges. Over the years, the sector’s contribution of to the GDP has dropped significantly from 15 per cent in the 1970s to about 4.21 per cent in 2010. over 1,000 manufacturing concerns have closed shop nationwide and converted to places of worship and event centres.
The capacity utilization has nosedived from 70 per cent in the 1980s to 45 per cent in 2010. the ever busy industrial estates are now shadows of their past glory and what government at all levels keeps saying indirectly is ‘we need more fund and the manufacturing sector must provide it,’ without a commensurate provision of the required environment,” he lamented.
He further called on the Lagos State Government to build the dilapidated roads around the Ikorodu Industrial estate.