‘How diversification agenda can succeed’

While the Federal Government may have adopted a resource-based industrialisation policy to resuscitate the economy, manufacturers have advocated attractive incentives to encourage value-addition in the agricultural and solid minerals sectors.

According to the Manufacturers Association of Nigeria (MAN), unveiling incentives will go a long way in attracting potential and current manufacturers into the use of local raw material inputs.

Besides, MAN emphasised the need for government to give urgent attention to agriculture, solid minerals and petroleum sectors to aid the provision of the needed inter-industry linkages for production of raw materials for the manufacturing sector.

With the country already in recession, MAN stated that the industrial sector, especially the manufacturing sub-sector, should be strengthened by removing all obstacles restraining the growth and competitiveness of the sector.

MAN identified such obstacles to include indiscriminate changes in the Monetary Policy Rate (MPR) which changed as many as four times between 2014 and July 2016, with its distorting effects on the economy; the exclusion of 41 items, some of which are essential raw materials, from the official forex market as well as failure to synchronize monetary and fiscal policy actions.

MAN President, Dr. Frank Jacobs, explained that the resource-based industrialisation policy and local sourcing of raw materials which MAN has been canvassing, for some time now, involves the utilisation of the abundant natural resources in manufacturing the products that the country needs, adding that the action is a more sustainable and enduring form of industrialisation, compared with the import-dependent industrialisation which has been practised in Nigeria for long.

“I am happy to say that manufacturers have gradually but increasingly utilised higher percentage of  locally available  raw materials over the years. For instance, local sourcing increased from 48 percent in 2013 to 52 percent in 2015.   This was possible because of the backward integration policy of the Government. The adoption of this policy by your administration, I believe, would enhance productivity in the manufacturing sector and reduce the import bill of the country.

“In order to successfully achieve this policy, however, government should create attractive incentives for investors who would engage in the processing of the abundant agricultural and mineral resources from primary produce to secondary or intermediate products.

“This would go a long way in attracting potential and current manufacturers into the use of local raw material inputs. It may not be expedient for all manufacturers to engage in processing of their raw materials except in some cases where such manufacturers can empower out-growers to produce their raw materials like in agro-food industries”, he explained.

According to him, agriculture holds a vast opportunity for wealth creation, if fully explored and exploited.

“With over 84 million hectares of arable land, supported by other resources like cheap and abundant labour, Nigeria can become a major player in the agricultural and agro-business sectors. Investment opportunities exist in the production of local staple crops like rice, maize, cassava; with the drive for local rice production to replace importation of rice, and cassava production to boost cassava flour for the manufacture of confectioneries, industrial starch and so on”, Jacobs added.