Manufacturers focus on value-addition, technology to raise GDP contribution

With contribution from the manufacturing sector still hovering at less than 9% of the Nation’s Gross Domestic Products (GDP), the Manufacturers Association of Nigeria (MAN) has stated that its members will renew focus on value-addition, as well as improve the technology deployed in factories.

According to MAN president, Mansur Ahmed, there is need to deepen the sectors both in depths and scope through increase in value addition.

Citing the textile sector as an example, Ahmed said the sector used to be very vibrant, but it has declined significantly.

“So, we must broaden the sector to ensure that sectors that are not adequately functioning are restored to good health. In leather and footwear there is tremendous capacity but today it is not being fully exploited. We are stopping at the production of wet leather.

“Value addition is the key to success in manufacturing, for instance, if you take the process from hide to finished leather and compare the value that is added from that finished leather to a pair of women’s handbags, the difference is huge.

“The same scenario is applicable to food processing; you produce cocoa, turn it into cocoa butter and you export it, what you get from that cocoa butter and they convert it into chocolates, for the same quantity of cocoa butter the manufacturers of chocolate will make literally a thousand times more than you do”, he added.

He also noted that one of his goals as the president of the association is to work with the National Council and Government to ensure the continued growth of the manufacturing sector both in depths and scope through increase in value addition and thereby better the contribution of the manufacturing sector to the Nation’s GDP.

On the technology deployed in industrial firms, Ahmed said it is not enough to have a factory but also watch what technology is doing to that factory.

“If you don’t update your technology very soon your processes will become obsolete and therefore your products will not be competitive.

“For the manufacturing sector to contribute to the GDP, part of the contribution comes from, not only the scope or depths of the sector, but also from the operational efficiency of the productivity, that is, the capacity utilization.

“Consequently, we need to make sure that we eliminate those things that on a day to day basis tend to impede the operations of members and therefore reduce their capacity utilization.

“Therefore, under my administration, members should expect expansion of the sectors as we are bringing more manufacturers into the fold and ensuring that sectoral groups are made vibrant.

“We have about ten sectoral groups, but if you look at the relative contributions you will observe that not more than four or five sectoral groups are responsible for most of the contribution of the manufacturing sector to the economy and for most of the employment as well”, he explained.

He also charged the government on the need to implement economic policies that will enable local producers to achieve their goal, adding that MAN is willing to take advantage of policies, creating the right interface between sectors and the policy makers in Government and ensuring that there is some level of understanding.