Harvard economist Dani Rodrik has in the past written that development in a country is virtually synonymous with producing manufactured goods for export. And if that is the criteria, as far as developed countries go, Nigeria hasn’t met the quota.
Manufacturing in a country is an imperative sector that contributes significantly to the growth of that country’s economy.
Nigerian during the 1900s was a hubbub of manufacturing activities. Especially in Lagos, it’s then capital state and the northern parts of Nigeria.
However, at some point in the history of Nigeria, everything changed, and the majority of manufacturing companies were made to shut down, causing an increase in the rate of unemployment and a tragic crash in the economy.
How significant were manufacturing companies before?
Currently, the Nigerian economy is showing clear signs of an undeveloped country, with most of the nation’s revenue coming from agricultural and oil and gas exports.
Nigerians oil makes up for over 80% of revenue made from exports also accounts for almost 15% of the nation’s GDP.
This is a stark contrast to the manufacturing sector that only makes up a small portion of the national economy (about 4%).
The eventual dependency on oil for export revenue happened despite government policies in the early 1960s to focus more on the manufacturing industry.
This policy involved a plan to focus on accepting imports that can kickstart the product of setting up infrastructure that is dedicated to promoting manufacturing industries.
It was in light of this policy is made that major projects such as the kanji dam were commissioned for the purpose of energy generation, an imperative element of the manufacturing industry.
Other projects for what would have been a manufacturing takeover in the country were also commissioned during this period.
However, there was the problem that most of the materials needed for the mobilization of the manufacturing industry were imported with almost complete neglect of domestic endowments.
Regardless, manufacturing companies were a large contributing factor to the nation’s company compared to know that they barely make up to a scratch of the country’s GDP.
However, just decades ago, the northern part of Nigeria was a thriving state for manufacturing industries and manufacturing activities.
Kano, with its infamous dye pits, was a major producer of textile materials. At the same time, Kaduna was once considered the Manchester of Nigeria.
Why and when were they run down?
Nigeria had such a thriving economy due to the country’s multiple economic ventures. However, everything came crashing down during the period when oil was discovered.
When oil was discovered in Nigeria, it caused a slight distortion in the economy, causing inflation in the exchange rate.
What this meant was that it had become cheaper to import foreign commodities from other countries than it was to produce them domestically.
Safe to say that the main reason what would have been a thriving industry was run down was because of mismanagement and ultimately neglect.
How has the lack of manufacturing companies impacted the Nigerian economy?
Currently, Nigeria imports almost everything from foreign countries, even down to the food we eat.
And while everyone from local producers to the citizens of Nigeria complains about this, not much seems to be done.
This overdependence on imports hit the hardest in 2020 when the country went into recession during the Coronavirus outbreak.
And it emphasized how weak the nation’s economy truly is.
Ideas have been thrown about on how best to revitalize the manufacturing industry in the country, from stricter import laws to supporting local businesses. But all that just won’t cut it.
As long as the basic infrastructure, amenities, and domestic productivity are poor, then the manufacturing industry doesn’t have much hope.
The Nigerian economy has experienced a rollercoaster ride from its pre-independence era till now, and while manufacturing is no longer a major part of the nation’s economic output, the government seems to be on a mission to revive this sector.
By imposing prohibitions on foreign commodities and making Nigerian-made products more accessible to the public, there has been an increase in home manufacturing and trade.
However, sixty years later and Nigeria is still an exporter of raw materials.
But now the question remains whether Nigeria has missed its mark for the manufacturing boom other countries had experienced and benefited from in the past.
Regardless, the only way to save the Nigerian economy is by promoting and developing a competitive manufacturing sector to increase productivity, lower the rate of unemployment and boost the nation’s home and foreign trade.
Leave a Reply Cancel reply