Nigeria’s manufacturing sector remains far behind China, South Korea and Vietnam on key measures of industrialisation, with its contribution to gross domestic product (GDP), exports and manufacturing value added substantially below those of the three Asian economies, the Nigerian Economic Summit Group (NESG) has said.
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The NESG, in its latest report, ‘Turning Potential into Progress: Accelerating Nigeria’s Industrialisation for Economic Transformation and Inclusion’, said manufacturing accounted for 8.3 per cent of Nigeria’s GDP, compared with 24.7 per cent in China, 27.4 per cent in South Korea and 24.5 per cent in Vietnam.
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The gap is wider in exports, with manufactured goods accounting for only 2.8 per cent of Nigeria’s exports, against 91.9 per cent in China, 86.1 per cent in South Korea and 85 per cent in Vietnam.
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Nigeria also recorded the lowest real manufacturing value added per capita among the four countries at $209, compared with $3,563 in China, $10,115 in South Korea and $1,038 in Vietnam.
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The report stated the comparison pointed to the significant gaps Nigeria must address to achieve manufacturing-led structural transformation and improve social inclusion.
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It also showed that Nigeria lagged the three countries in several conditions considered necessary for industrial development.
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Nigeria’s access to electricity stood at 62.5 per cent, compared with 100 per cent in each of China, South Korea and Vietnam.
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Its Mobile Connectivity Index was 54.4 points, against 79.1 points for China, 84.7 points for South Korea and 72.7 points for Vietnam, while Nigeria’s government effectiveness score was 31.7 percentile, compared with 63.3 for China, 76.8 for South Korea and 66 for Vietnam.
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The NESG said successful industrialisation required strong inputs, including effective institutions and industrial policies, reliable infrastructure, skills, technology, access to finance, trade integration and macroeconomic stability.
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According to the report, these inputs enable higher manufacturing value addition, productivity, export expansion and investment mobilisation, while supporting decent employment, higher incomes, and poverty reduction.
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The group said the experiences of China, South Korea and Vietnam showed that strategic industrial policies had to be implemented alongside investments in infrastructure, human capital, technology and institutional capacity.
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It said the three economies had prioritised export competitiveness and manufacturing productivity while linking government support to measurable performance outcomes.
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The report noted that Nigeria’s industrialisation challenge was not simply a question of adopting an industrial policy, saying policy effectiveness also depended on infrastructure, human capital, access to finance, institutional quality and technological capabilities.