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Missing the train of industrialism?


One of the more sobering lessons of post-World War II history is that enduring power does not “flow through the barrels of the gun.” Germany and Japan, the principal conquered nations of WWII, seem to have been seized of this lesson well ahead of the rest of the world. While the conquering nations consolidated their military industrial complexes, in a frenzied arms race against each other, Germany and Japan focused more on improving their respective industrial-productivity competitiveness. The initial results of these divergent regional thrusts first came to the fore in the early 1970s, when Japan literally inundated the world market place with her cheap industrial products, so-called. German competitively-priced and efficient electronics soon followed suit. Today, Germany and Japan hold sway in almost every subsector of global manufacturing.

The conquering nations, led by the United States of America and Russia, would appear not to have factored that reality into their post-WWII projections; their knee-jerk response to that reality is the proof. While the conquered nations stayed awake, the conquering nations slumbered. When the latter finally woke up, they were presented with a rude wakening: global sphere of influence (a euphemism for global market share) can no longer be guaranteed by military might. When the two superpowers made to respond to the demands of industrial productivity, they belatedly also realised they lacked the fundamentals to so do. Well, that proved not to be entirely correct, because the U.S. and Russia have since respectively looked beyond planet Earth for a way out of their industrial-productivity challenges.

In the last decades the U.S. and Russia between them have expended trillions of U.S. dollars exploring esoteric production methodologies, including the feasibility of setting up manufacturing complexes in Space; namely, zero-gravity manufacturing. Since basic physics tells us that friction, a consequence of gravity, is a major challenge in manufacturing, zero-gravity production would offer incredible advantages, leading to steep reductions in expenditures. Science fiction? Far from it; published information suggests commercial Space manufacturing is only a few shades removed(!)

As an aside, it is worth observing that neither the U.S. nor Russia has seriously considered exploiting the enormous productivity advantages inherent in the Third World bloc, including Africa. Rather, they preferred to “go out of this world,” in search of solutions. Obviously the U.S., Russia, and their allies’ parochial view of the Third World as no more than a market place and a source of cheap raw materials, has a lot to do with it. The Atlantic Charter, which U.S. President Franklin Roosevelt and British Prime Minister Winston Churchill ratified in 1941, had made no secret of that regional viewpoint. The Atlantic Charter would later form the basis for the creation of the Reconstruction Bank (later the World Bank), and the International Monetary Fund (IMF). That is why it is tantamount to deliberate misinformation to refer to those institutions as “world” or “international” bodies when, in fact, they were essentially founded to serve the interests of the U.S. and European nations. The Asians had the intuition to discern this early in their evolution, and today they have an impressive share of the global market to show for their prescience. Not so Africans; meanwhile available time for Africa’s industrialisation inexorably diminishes.

It was, therefore, heartening to hear the Federal Government announce last week its plan to re-launch Nigeria’s Industrial Revolution. One hopes government is in earnest this time round. Since the mid-1970s, tremendous time and resources have been expended on that national quest. The culmination of these was the United Nations’ assisted 1989 Strategic Management for Industrial Development (SMID) document, which should serve as a veritable reference point for Nigeria’s Industrial Revolution. A precursor of that document, Nigeria’s existing seven-chapter Industrial Policy, did highlight that the country’s poorly coordinated industrialisation eventually led to: high geographical concentration; high production cost; low value added; low capacity utilisation; high import content of manufacturing activities, and low levels of foreign investment in manufacturing.

The foregoing flaws in Nigeria’s industrial space were believed to be the reason the 1986 Structural Adjustment Programme (SAP) failed to grow the economy. The National Committee that was subsequently set up to find a pathway out of SAP’s quicksand produced the SMID document. SMID envisions a private sector-led holistic national industrial system, optimally interlinked such that the outputs of some industries are primary material inputs of other industries. A leading member of that committee, late Chief Rasheed Gbadamosi, the great art patron, summarised the merits of the SMID document as follows:

“A private sector-led industrial initiative, fully backed by government regulatory machinery stands a better chance of outliving transient regimes; Representatives of industrial enterprises that have survived the economic travails of the recent past constitute a body of experienced entrepreneurs who speak authoritatively on matters affecting industry;

The interactive, consultative and cooperative principles of the Strategic Management of Industrial Development is the best way to remove the mutual suspicion between government officials and entrepreneurs, and beyond that, it is a two-way channel of learning the problem and constraints of each side;

There has to be a resurgence of domestic manufacturing activities before there could be meaningful overseas investment in the Nigerian economy; Attempts at commencing positive movement in the industrial sector would excite macro-economic management, since the industry lobby could be relied upon to be rather vocal in their demands – confidence begets confidence;

Once the vision of industrial prosperity is sketched, the task of industrial building, such as the variety of long-term finance institutions, the role of international agencies and institutional investors who view investments and assistance from log-term perspective will be clearer and better defined. The Nigerian Stock Market itself will respond, and the Nigerian financial institutions should at last widen, deepen and aid more meaningfully the mobilisation of resources for medium and long-term activities;

The success of SMID process can very well divert the energies of significant members of the society from destructive policies to creative enterprise building. For example, the consensus building aspect of SMID is a veritable lesson in democratic practices, such as give and take, compromise, fairness; and justice once there is a commonality of goals and values.”

In other words, SMID advocates the quantum-leap approach if Nigeria were to join the list of industrialised nations. That was the informed position in 1989. That quantum-leap approach has become urgent with the 21st century realities.

As available information affirms, the coveted club of industrialised nations is as likely to become inadmissible of new entrants in the near future; a reason the ruling All Progressives Party (APC) Federal Government should seriously rethink its expressed “incremental approach” to industrialising Nigeria. The USD1billion Eurobond recently issued by government speaks eloquently of government’s poor grasp of the depth of our economic malaise. What impact could that paltry sum possibly make on our infrastructural deficit, which has variously been aggregated at USD80billion? With Nigeria’s proven revenue base, foreign reserves aggregate, and her working population, we should be issuing USD30billion or thereabouts worth of bond in the capital market, to galvanise the much desired Industrial Revolution. To persist in the present incremental approach exposes Nigeria to the grave risk of missing the train of industrialism in perpetuity. This should be a source of concern for the obvious reason that industrial-productivity now determines the fate of nations, and Nigeria barely has enough time to catch up.
• Nkemdiche, consulting engineer, lives in Abuja

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