Stakeholders have stated that the country is experiencing high de-ndustrialisation with almost half of its thriving manufacturing establishments becoming obsolete.
They noted that, there is a need to stem the tide of deindustrialisation in the Nigerian economy.
Following the collapse of many manufacturing firms (most of them are SMEs), many factory premises around the country have been taken over for activities order than manufacturing.
Some premises have been converted to event centers, supermarkets, worship centers, warehouses for imported finished goods, restaurants, viewing centres, cinemas among others.
Many of industrial estates have become a shadow of what they used to be. Evidence of all of these can be found in industrial estates located in Ilupeju, Ogba, Ikeja, Sango-Ota, Agbara and many other parts of the country both in the eastern or northern part of the country the story is not different.
Stakeholders stated that “it is therefore imperative to take urgent steps to stem the tide of deindustrialisation if we must curb the growing unemployment and the increasing import dependence of our economy.”
Factors Responsible For Deindustrialisation
According to director/CEO of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, the influx of cheap and substandard products into the country which creates unfair competition for our domestically produced goods.
“The crisis in our foreign exchange market which has elevated the volatility in the exchange rate and which has worsened the illiquidity in the foreign exchange.
“The epileptic power situation and high cost of energy especially diesel and gas; the phenomenon of multiple taxation imposed by the three tiers of government; the challenge of multiple taxation and excessive drive for revenue by agencies of government which imposes a huge burden on our manufacturing industry, especially those who are in the MSME category; there is poor domestic patronage of what is produced locally; paucity of basic industries to support our manufacturing enterprises; policy inconsistency; weak infrastructural base; high cost of fund; among others,” he stressed.
Way Forward
Yusuf stated that “the systemic issues of infrastructure should be addressed as a matter of utmost priority. Immediate focus should be on electricity supply and logistics. Unless we have these two critical infrastructures in place, it will be very difficult to ensure a competitive industrial sector and to make possible the transformation of the sector.”
He noted that “we should fix the foreign exchange liquidity and currency depreciation issues. MSMEs with annual turnover of N50 million and below should be exempted from corporate tax and VAT. This is in addition to tackling the problem of multiple taxes and levies on small businesses both by state and non-state actors.
“Structural issues on infrastructure should be addressed to improve productivity and competitiveness of manufacturing firms.”
He explained that “if we must promote economic growth and inclusion, we must bring the MSMEs on board. The government needs to put in place the support infrastructure to facilitate the growth of MSMEs.
“We should also not leave the informal sector behind. We should have strategies to de-risk manufacturing enterprise and ensure their sustainability, promote linkages between the large and small enterprises and entrench the concept of clusters for small scale industries.
“We need to promote technology adoption by our MSMEs. Any business that is not embracing technology is at the risk of extinction. We cannot emphasise this point enough; we need to adopt technology in our production processes. We need to adopt technology in our business processes to make our processes a lot more efficient and cost effective.”
The director-general of Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona, noted that the President Bola Tinubu’s eight-point agenda: food security, ending poverty, economic growth, and job creation. Others are improving access to capital, particularly consumer credit, inclusivity in all its dimensions, improving security, improving the playing field on which people and particularly companies operate, the rule of law, and fighting corruption.
“The LCCI is of the view that if these highlighted policy thrusts of the administration are well articulated and implemented, they are certain to strongly impact the nation’s socio-economic landscape.”
She said, “Specifically, the administration’s target of creating 50 million jobs should go beyond a policy statement, as implementation is critical to the economy. The most sustainable approach to job creation is to support production and create an enabling business environment for the private sector. A thriving private sector will continue to create jobs for the foreseeable future.”
She recommended the implementation of responsive fiscal and monetary policy measures in order to ensure/ promote macroeconomic stability with a particular focus on effectively managing inflation, addressing the challenge of high interest rates and foreign exchange shortages.
She also anticipated that the government would focus its policy efforts on sectors with the potential of generating high employment.
