We’ll Drive Economic Diversification through Private Sector – FG
…As MAN focuses on value-addition
Minister for Works, Housing and Power, Babatunde Raji Fashola, said the President Muhamadu Buhari’s-led Federal Government would give more attention and support to the Organised Private Sector (OPS) in its economic diversification plans.
The Minister for Works, Housing and Power said this while speaking at the opening ceremony of the 2019 edition of the Manufacturing Equipment Expo (NME) and Manufacturing Partnership for African Development (mPAD), tagged, “Optimising Value Chain to Maximise Growth and Competitiveness in the Manufacturing Sector.”
Fashola who was represented at the occasion by Ibi Terna, Director, Highways Development, said the Muhammadu Buhari-led Federal Government, in a bid to create an enabling environment for manufacturing and other businesses, has intensified activities in the provision of basic infrastructure such as roads, power generation, rail lines and water.
He said improved transport infrastructure is expected to improve the time and cost of access to raw materials/finished goods and ensure wider market for the sale of manufactured products.
“However, being aware that public funds are not adequate to provide the desired level of infrastructure due to other competitive demands on public resources, policies have been put in place to encourage the private sector to partner the Federal Government in the provision of these critical infrastructures.
“The Federal Government’s focus on previously comatose road projects on major arterial routes like the Enugu-Port Harcourt Highway, Apapa-Oworonshoki Highway, Lagos-Ibadan Highway, Kano-Maiduguri Highway, Lokoja-Benin Highway and Kaduna Eastern Bypass, to mention few, is not accidental but targeted at increasing manufacturing capacity and national productivity. Such projects are now making steady progress towards early completion,” he said.
He explained that government would further intensify efforts in the diversification of the economy from monolithic product, which is oil, to the expansion of real sector, agriculture and adding value to raw materials being exported to other parts of the world.
Speaking also, President, Manufacturers Association of Nigeria (MAN), Mansur Ahmed, said with contribution from the manufacturing sector still hovering at less than 9% of the Nation’s Gross Domestic Products (GDP), its members will renew focus on value-addition, as well as improve the technology deployed in factories, adding that 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.
“This was a fallout of the Intra-African Trade Fair (IATF) held recently in Cairo, Egypt. I was elected the chairman of the interim committee saddled with the responsibility of birthing this Pan-African body that would provide the platform for African manufacturers to collectively address the challenges confronting sustainable industrialisation of Africa and trade among ourselves.”
The Director General of MAN was also elected as co-secretary in conjunction with his Kenyan counterpart,” he stated.
Chairman, Flour Mills Nigeria, John Coumantaro who delivered a keynote address on the theme of the event, “Optimising Value Chain to Maximise Growth and Competitiveness in the Manufacturing Sector,” said the topic was most suitable for several reasons, as it gives Nigerians an opportunity to look at the seemingly obstinate challenges that they must contend with in the manufacturing sector, including the widening infrastructure deficit, unfavorable policies, dwindling consumer spending, and its attendant effect on our bottom line.
