The Vision 20:2020 industrialisation slogan, like other slogans such as Housing For All, Water For All, etc, is gradually turning out a mere slogan, indeed, as the magic year, 2020 approaches. Critical stakeholders all agree there is nothing on ground to make Nigeria enter the big league of 20 topmost industrialized countries in eight years, as can be deduced in this special report by ROSELINE OKERE. They provide a roadmap to follow if the dream would become a reality.DAILY, we are regaled with stories of one factory or the other shutting down. No factory in the country is immune to the threat of going out of business.Businesses, big and small, have had to decommission their plants and send their workers home to an uncertain future.Aside from age-old reasons like poor infrastructure and high cost of credit, it is the intangibles that do the most damage to businesses in the country.Over the years, manufacturers have been forced to factor into their business matrices the cost of doing business in Nigeria. They take into consideration the unavailability of constant electricity; and they also build into their business models high interest rates charged by the banks that make credit available.In addition to these, they further recognise the near absence of adequate distribution channels and a top-grade transportation network. In doing that, additional costs are transferred to consumers that utilise their goods and services.But what manufacturers never factor in, in the course of doing business are indiscriminate fiscal policies and an unpredictable macroeconomic regime.Nigeria first plunge at industrialisation was via the import substitution strategy.The attraction of the import substitution strategy lies in its potentials as a strategic tool for the replacement of industrial imports with domestic production.It also has enormous potentials not only for correcting the balance of payment disequilibrium but also for boosting employment in the real sector.The idea was for the local industries to gradually and over time, substitute imported products with local inputs.Thus, by setting up local industries in Nigeria to produce goods that were formerly imported, a realistic industrial base that could transform Nigeria into an industrial state would have been laid.Unfortunately, the import substitution strategy did not help neither did it put Nigeria's feet on the path of rapid industrialisation as envisaged.Disappointingly, the 'import substitution industries' still depended primarily on imported raw materials and thus helped to worsen our balance of payment problems that it was designed to solve.The import substitution strategy did not encourage self-reliance or inward looking as these startup industries continued to look up to foreign sources for their raw material supplies.Director-General, Lagos Chamber of Commerce and Industry, Muda Yusuf believes that the story of the Nigerian industrial sector is not entirely that of gloom.'We have seen remarkable progress in the food and beverage sector - the breweries, bottling companies, food processing companies.We have also seen impressive growth in the cement industry as well as some chemical industries.Evidently, the star performers are large enterprises, some of them multinationals.Their sizes create clear advantage of economies of scale, which reduce cost and improve competitiveness. Many of them also have good record of backward integration.But for the small and medium enterprises segment of the sector, the challenges of the environment are considerable which is why the mortality rate is high.'President Goodluck Jonathan's transformation agenda comes to grief without re-industrialisation and after power supply, the most critical issue in re-industrialisation is long term cheaper financing.The advantages of re-industrialisation for Nigeria include lessening of dependency on imports, thus saving scarce foreign exchange. Where the economy is diversified, industrialisation serves as a source of foreign exchange. It also serves as a source of mass sustainable decent employment for greater number of the population and invariably reduces income poverty.President Jonathan, it is believed, directed the Minister of Finance, Dr. Ngozi Okonjo-Iweala and the Central Bank of Nigeria, (CBN) Governor Lamido Sanusi Lamido to meet with the Minister of Trade and Investment, Olusegun Aganga with a view to coming up with modalities which would enable the Federal Government increase the capital base of Bank of Industry (BOI).The sustainability of the reopened UNTL Kaduna for instance, and further reopening of others depends on the continuous commitment of governments through adequate funding of development banking institutions like BOI, which of course must be complemented with other supportive and progressive policies such as drastic reduction in the incidence of smuggling.Stakeholders believe that despite Dr. Jonathan's transformation agenda, Nigeria may likely fail to achieve Vision 20:2020 as the manufacturing sector contributes less than the expected for the nation's economic growth.According to them, Nigeria needs to grow its Gross Domestic Product (GDP) to over $900 billion in order to be among the top 20 economies by the year 2020.They said that the current GDP figure of $194 billion places the country in the 41st position, according to International Monetary Fund (IMF) estimates.Yusuf told The Guardian last weekend that the manufacturing sector, which is one of the areas critical to the attainment of the Vision 2020, has not been able to achieve its full potential because of certain challenges.Some of these challenges, according to him, include poor power supply, dilapidated road network, absence of defined master plan for railway development, rising cost of automotive gas oil and gas, as well as uncoordinated tax administration.Others are smuggling and trade malpractice, incessant increase in the Monetary Policy Rate, difficulty in accessing long-term credit for small-scale industries, achievement of a single digit interest rate and insecurity of lives and property due to activities of hoodlums, terrorists, militants and pirates.He emphasized the need for the government to address the gap in infrastructural development, using the abundant human and natural resources available.Yusuf stated that the Federal Government should urgently declare a state of emergency in the power sector if it wants to achieve its Vision 20:2020 dream.He said: 'The challenge posed by inadequate and epileptic power supply has refused to abate and this has continued to exact its toll on the operations and the consequent cost of doing businesses in Nigeria.Yusuf listed other challenges to include high cost of fuel, especially diesel; high transportation cost; policy inconsistency; overbearing regulatory institutions and difficulties in the clearance of cargo at the ports.He added: 'High cost of funds and dearth of long term funds; influx of finished goods from Asia; weak linkages between small and large enterprises; weak research and development support and dearth of strategic industries such as steel and petrochemicals. If the Vision 2020 for the sector is to be achieved, these constraints will have to be addressed.'It is expected that the Federal Government will indeed urgently take drastic measures that would ensure positive performance of the power sector, as most manufacturing companies in the country have relocated to other West African nations as a result of poor power supply.'Yusuf said the chamber would continue to advocate for private public partnership (PPP) as a pointer to ensuring effective implementation and sustainability of the transformation agenda of the government.He added: 'The Federal Government should focus on power and energy, agriculture and food security, wealth creation and employment, mass transportation, land reforms, security, qualitative and functional education and of course, the Niger Delta would turn around the nation's economy and make possible the realisation of the Vision 2020 dream.'An economy gets the kind of investment it deserves.The predicament of the industrial sector is a reflection of the investment environment.In any economy, the sector that gives the best returns would, in all probability, attract more investment. Presently, the Nigerian industrial sector does not present a major attraction for investment, especially at the small and medium enterprises levels. This explains the contribution of the manufacturing to GDP, which is currently less than five per cent. At the heart of this is the problem of competitiveness.The challenges for industrial production and indeed real sector of the economy had persisted for over two decades.'With Vision 2020 being only eight years away, this is definitely a tall order, especially in the light of where we are at the moment.But a great deal of impact could be made if there is the political will and sincere commitment to make things happen.To realise Vision 20:2020, Yusuf stated that quality investment should be undertaken in strategic infrastructures to reduce operating cost and improve competitiveness.He added: 'There should be development of clusters for small scale industrialists; increase in local content; there should be higher investment by government in research and development and government should encourage patronage of locally purchased goods; development of strategic industries, especially steel and petrochemicals; improvement of linkages between small and large enterprises and improvement in funding at low interest rate and with long tenure'.President, Nigerian Union of Traders (NANTs), Ken Ukaoha said the Nigerian industrial sector has been suffering from long abandonment by successive governments hence the inability of the private sector to brace up to the challenges of globalisation and competitiveness.The sector, according to him, has therefore remained in the state of comatose and has not added any value to the economy for over three decades.'Statistically, it is on record that during the period between 1982 and 1985, the Nigerian industrial sector contracted about two per cent. Growth in manufacturing industries dropped by two per cent, while crude petroleum and natural gas grew by 0.2 per cent in the same period. Growth of the industrial sector edged up to 3.4 per cent in 1986-1993 in response to the SAP policies,' he said.Ukaoha stated that the guided-deregulation policies did not favour the manufacturing sector as growth rate dropped to 1.2 per cent between 1994 and 1998.He explained: 'Significant growth was later observed for the first time in 1999-2010 as growth was up by 4.5 per cent. The share of manufacturing in GDP declined consistently from 6.7 per cent in 1981 supported by various measures including import-substitution industrialisation strategy to 4.2 per cent in 2010.'In order to stem this tide, the nation developed Vision 20:2020, which has a strong policy thrust on industrialisation ' becoming one of the 20 largest industrialised countries by the year 2020. However, massive investment required for infrastructure and the fact that the Vision itself is being gradually abandoned coupled with heavy corruption in the country, appears to be derailing the pursuit of the Vision.'Indeed, the industrial sector has been dominated by exploitation of natural resources, specifically crude petroleum and natural gas. Unfortunately, while the exploration ought to have activated maximization of benefits in the nation's hydrocarbon resources, what we rather have is an industrial sector that generates its own power and depends on long queues for imported and exorbitant fuel.'The decline in the relevance of manufacturing sector in the economy has been attributed to a myriad of challenges including the poor state of the nation's infrastructure, which imposes high cost of production, weak technological support and low level of innovation, that led to production of low quality products and non-competitiveness. Policy instability and discontinuity as well as lack of funding and financial services have been contributing also to the decline in the share of the sector.'Ukaoha disclosed that the sector is constrained by a host of growth inhibiting factors such as poor infrastructure, low research and development, application of outdated and inappropriate technology (obsolete and manual machines in a contemporary digital manufacturing world) by industrial operators - a typical example of this is the Nigerian textile industry where manual machines are still being used to compete with Chinese and other manufacturing outfits where manufacturing is digitalized to produce specs, styles and fashions that are in vogue and irresistible, shortage of skilled manpower in the sector, over-dependence on external sector for inputs including raw materialsand high cost of capital, which makes it is easier and quicker to borrow money from the banks for imports than to invest in manufacturing.He listed others to include influx of imported goods as unchecked importation, which stifles local demand and the protection of domestic producers - and this brings to question the role of the Customs and other security agencies where even goods that are prohibited or banned still find their way into the local markets, inappropriate industrialisation policies and or policy inconsistencies by government, Nigerians 'love' or preference for imported/foreign goods, weak and selfish private sector industrialists/operators who are only interested in negotiating for their personal benefits instead of sectoral benefits (and they apply for and receive waivers that most times kill other industries), and the absence of a strict and implementable trade policy that focuses on sustaining/protecting local industry.President, Manufacturers Association of Nigeria (MAN), Kola Jamodu, says Nigeria needs a virile manufacturing sector to attain Vision 20:2020, which will push the country into the league of top global economies.Speaking recently at the 44th yearly general meeting of Ikeja Branch of MAN, Jamodu said Federal Government's agenda of making the country a top economy in 2020 would be a mirage unless concerted efforts were made to raise the capacity of local manufacturing sector.He decried rapid relocation of industries out of the country, saying government must arrest the ugly trend by addressing all operational challenges and threats confronting investors in their quest for profitable performance in the business environment.'Our dream to become a top economy in the year 2020 will be a mirage unless we have a virile manufacturing sector. Is it too complex for us to understand that no nation can be tagged developed without a virile manufacturing sector''Is it difficult for our operating environment to be improved significantly' We are concerned about the rate at which companies are relocating to Ghana due to harsh operating environment,' the MAN chief said.Speaking recently at the yearly general meeting of Bayelsa Branch of MAN, chairman of the association, Emilia Akpan pointed out that the states were richly endowed with abundant raw materials that could support various areas of manufacturing begging for exploitation.Akpan said: 'The fortunes of the real sector continue to decline and in fact in a near comatose state. A turnaround in this very important sector therefore would engender overall growth of the economy because this is a sector capable of generating employment for all categories of employees. It is a sector that should give life to the state government's policy on employment generation and empowerment if so recognised. However, this sector has become endangered as its decline has partly contributed to the current level of unemployment as more people were forced into the labour market'.She, however, acknowledged efforts by the Federal and state governments, especially Rivers, to address some of the challenges, stressing the need for government and relevant stakeholders to work together to restore manufacturing to its pride of place in Nigeria.'Nigeria has great potential for economic and industrial development but unless these potentials are decisively and properly harnessed, the Vision 20:2020 will continue to be a mirage', she advised.Chairman of Edo/Delta States MAN, Humphrey Emuobor Masogje, expressed fears that Nigeria may still not become the fastest growing economy by 2020.Masogje said the prediction may come true except governments at all levels set up functional, multiple industrial parks as part of measures to attract foreign investment, create jobs and boost the internally generated revenue.He also bemoaned the low patronage the few 'Made in Nigeria' products from these firms face and linked them to the decline in the number of manufacturers and industries in the country.He said to boost growth in the manufacturing sector, government, at all three tiers, should streamline the activities of indigenous industries and promote policies favourable to enforce the use of locally produced goods in all ministries and departments.Commenting on the power sector, Masogje said lack of electricity had hampered development and growth in the manufacturing sector of the nation's economy, adding that, 'Nigeria with a population of about 160 million is struggling with a mere dismal power generation capacity of below 4,000 megawatts.'Accordingly, the MAN boss declared that 'the scenario is appalling,' compared with South Africa with a population of 45 million but generates 42,000 megawatts, which he said is a veritable signal for development and growth within the manufacturing sector of global economy.
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