Nigeria’s Industrialisation, Which Way Forward?

Nigeria is making strenuous efforts to announce its presence in the comity of industrialised nations, but it appears that too little has been achieved despite all the commitments and investments in the sector.

So far, the industrial sector in Nigeria (comprising manufacturing, mining, and utilities) accounts for a marginal proportion of economic activity in the country.

Over the last 50 years, Nigeria has attempted to facilitate an industrialisation policy and set a framework for industrial development from the 1960s to the present day. As of 2023, industry sector, which includes manufacturing, mining, and other industrial activities, accounted for 32.58 per cent of Nigeria’s Gross Domestic Product (GDP). But this can improve.

For instance, a national science and technology (S&T) policy was formulated and launched in 1986 with an aim to increase public awareness in S&T and their vital role in national development and well-being. It also aims to direct S&T efforts along identified national goals; promote the translation of S&T results into actual goods and services, and to create, increase and motivate output in the S&T community.

The S&T policy marked the beginning of the recognition of S&T efforts as a vehicle for successful industrial development in Nigeria, among other projects, policies and programmes to build an industrialised Nigeria.

The Bank of Industry (BOI) established in 2000, was also introduced as a development institution to accelerate industrial development through the provision of long-term loans, equity finances and technical assistance to industrial enterprises.

The bank combined the following institutions: the Nigerian Industrial Development Bank (NIDB), the Nigerian Bank for Commerce and Industry, Industrial and Insurance Brokers, and the Leasing Company of Nigeria Limited. The objectives of this bank included providing long- term loans, assisting in employment generation and promoting industrial dispersal of indigenous entrepreneurship.

However, Nigeria’s industrialisation trajectory is facing enormous challenges that have hampered its efforts and hobbled its vision.

Some of these hurdles include inadequate infrastructure, a lack of skilled labour, limited access to finance, corruption, economic instability, and insufficient raw materials, all of which hinder growth and development.

If we have to assess Nigeria’s performance in relations to other countries, it might be delusional to think that Nigeria will become industrialised if it does not tackle poor infrastructure, including unreliable power supply, inadequate roads, and limited access to water and sanitation, increases the cost of doing business and deters investment.

We have also identified shortage of skilled workers in technical and vocational fields, including the fact we have an educational system that has not been aligned with industry demands. Another obstacle is that industrial firms, particularly SMEs, struggle to access affordable and appropriate funding from banks, government programmes, and capital markets.

Then, there is this gargantuan issue of corruption bedeviling the country which has made it almost impossible for industrial development to thrive, hindering project completion, diverting resources, and creating an unfavorable business environment.

The dwindling economic fortunes   in recent times has afflicted  the country  with  volatility due to factors like fluctuating oil prices, political instability, and currency devaluation, creating uncertainty for businesses.

Nigeria also faces the obstacle of inadequate raw materials despite its natural resources, and this is a major impediment to manufacturing and industrial activities even as the country has failed to adopt and develop new technologies, partly due to a shortage of skilled labour and limited investment in research and development.

However, we believe that Nigeria can rise to the occasion and proffer solutions to problems of industrialisation and manufacturing.  Nigeria must invest in human capital and strengthen institutions that drive its industrialisation such as the National Agency for Science and Engineering Infrastructure (NASENI) and related agencies.

For over three decades, NASENI has been committed to a unique and enduring mission: to establish and nurture an appropriate and dynamic Science and Engineering Infrastructure-base for achieving home-initiated and home-sustained industrialisation through the development of relevant processes, capital goods, and equipment necessary for job creation, national economic well-being, and progress.

We believe that Nigeria can boost its innovation and entrepreneurship, which will continue to provide a clear pathway to national development, offering a bridge from economic struggle to industrialisation and prosperity. Nigeria has the talent, the ideas, and the ambition, and with adequate planning and commitment, the country will reach its promised land.

We also believe that with the right policies and sustained efforts from agencies like NASENI, the country will unleash its full economic potential and establish itself as a powerhouse of innovation and industrialisation in the global arena.

Above all else, there is no arguing the fact that industrialisation is bugged down by the absence of political will to do the needful to push the country in the right direction. This is more noticeable in the prevalence of import substitution as a policy that has turned budding industrialists into importers and foreign manufacturers’ representatives. This, kin our view is the crux of the matter.