With Nigerian manufacturers paying between two and 10 times more than their competitors for power, finance and logistics, Nigeria risks losing both domestic and African markets unless it cuts production costs, Executive Secretary of the National Sugar Development Council (NSDC), Kamar Bakrin, has warned.

Presenting a paper at the technical session of the 17th National Council on Industry, Trade and Investment (NCITI) in Enugu, Bakrin said higher production costs have made locally manufactured goods less competitive despite a domestic market of about 230 million consumers and duty-free access to 1.4 billion consumers under the African Continental Free Trade Area (AfCFTA).

He proposed measurable targets to improve industrial competitiveness, including reducing electricity costs for industrial clusters to between eight and 10 cents per kilowatt-hour, expanding single-digit industrial lending, cutting port clearance time to fewer than seven days from the current 18 to 21 days and doubling output per worker by 2030.

Bakrin also presented four resolutions for adoption by the Council, including requiring every state to designate at least one industrial cluster for a dedicated power arrangement within 12 months; establishing a federal-state compact to harmonise levies and eliminate informal checkpoints along industrial corridors; introducing an annual State Industrial Competitiveness Index to rank states on power, land, levies and logistics and enforcing Nigeria First procurement at both federal and state levels through quarterly compliance dashboards.

He said each resolution should have a named owner, timeline and measurable performance indicators.

He said industrial electricity costs about eight cents per kilowatt-hour in Vietnam and about 10 cents in China, compared with about 15 cents on Nigeria’s grid, rising to nearly 30 cents when manufacturers rely on diesel-powered generators.

He said Nigerian manufacturers spent an estimated N1.34 trillion generating their own electricity last year, describing the situation as one in which “every factory in Nigeria is running a second, unwanted business as a private power station.”

He added that manufacturers also contend with working capital costs of between 27 and 35 per cent, compared with about nine per cent in Vietnam and three per cent in China, while Nigeria ranks 88th out of 139 countries on the World Bank’s Logistics Performance Index, behind Vietnam at 43rd and China at 19th.

The combined impact, he said, has left manufacturing contributing only about eight per cent to Nigeria’s Gross Domestic Product (GDP), while capacity utilisation has fallen to 57.7 per cent.

“None of this is a demand problem. Nobody needs persuading to buy what Nigeria makes,” he said. “It is a cost-of-production problem—and that distinction matters, because costs, unlike demand, are within our power to fix.”

He said recent macroeconomic reforms have created a more stable environment for investment, noting that inflation has roughly halved from its peak while external reserves have risen to $51 billion, the highest level since 2009. He added that the changes come at a critical period as global supply chains continue to shift and manufacturers seek new production locations.

Bakrin said Nigeria must seize the opportunities presented by AfCFTA or risk losing its market to competing countries.

“Either our goods are crossing borders going out, or everyone else’s goods are crossing ours coming in. We are either going to compete, or we are going to concede the market,” he said.

To demonstrate that industrial competitiveness can be improved through targeted policy, Bakrin cited Nigeria’s urea industry, whose production capacity increased from about 500,000 tonnes in 2005 to 6.5 million tonnes, making the country one of the world’s top 10 exporters of nitrogen fertiliser.

He attributed the growth to a policy that treated natural gas as an industrial input rather than solely a revenue source.

Bakrin said government support for industry should remain performance-based, arguing that tax credits, subsidised electricity and procurement preferences should be tied to verified production outcomes, similar to the approach adopted under the Nigeria Sugar Master Plan’s Backwards Integration Programme.

He urged state governments to take advantage of the Electricity Act 2023 to develop power markets, make industrial land bankable by resolving host-community compensation issues and securing physical possession, consolidate levies into a single published schedule and align technical college training with the industries they seek to attract.

He also called for annual public ranking of states’ investment climates, arguing that competitiveness should be measured consistently.