Akinwumi Adesina, President of the African Development Bank Group, has stated that Nigeria’s industries will always be noncompetitive unless the country takes significant action to address energy insufficiency and reliability.
On Tuesday, Akinwumi made this statement during a meeting organized by the Manufacturers Association of Nigeria (MAN) in Abuja.
No business in Nigeria can survive without generators, according to the AfDB President.
“In Nigeria today, no business can exist without generators. As a result, the abnormal has become the ordinary.
“Unless Nigeria’s energy shortfall and reliability are addressed firmly, its industry will always be noncompetitive,” he stated.
Adesina noted that the country had failed to position itself for economic growth and achievements, the type attained by developing countries like Vietnam and Malaysia.
“While for decades the share of manufacturing in Nigeria’s GDP, has hovered around 7%, the nation has not been able to extricate itself from the comatose of its industrial manufacturing sector to unleash the fulness of its potential.
“The performance of the manufacturing sector in the past five years has been poor. Between 2015-2017, the sector declined by -1.5%, -4.3% and -0.2%. This is in sharp contrast to the dynamic and rapid performance of manufacturing in Asian countries, such as Singapore, Malaysia and China.
“While Asian countries have focused on the export of manufactured products, Nigeria’s approach has been on import substitution. The manufacturing sector of Nigeria represents only 3% of total revenues from exports, but accounts for 50% of imports in the country. Instead of being forward looking in expanding the share of the manufactured goods in its total export revenue, Nigeria focuses on the model of import substitution.
“Import substitution, while important, is a very restrictive vision. It looks towards survival, instead of looking to create wealth through greater export market and value diversification. The end result is a manufacturing sector that cannot develop nor compete globally, but limits itself to “survival mode, not a “global manufacturing growth mode”.
Nigeria’s manufacturing sector, according to Adesina, must have a higher ambition by integrating and rapidly advancing up global and regional value chains in areas of comparative advantage, as well as driving more specialisation and competitiveness.
He also chastised the country’s apparent policy of restricting foreign exchange access rather than increasing forex earnings.