THE manufacturing sector plays an important role in the country’s economy and will continue to do so in every economy, the Central Bank of Nigeria (CBN) has said.
The regulator has, therefore, assured of its commitment to the sector.
In many leading economies, like the United States, manufacturing sector accounts for over $2.2 trillion of the Gross Domestic Product (GDP) or 11.6 per cent of the total in 2017, according to the Bureau of Economic Analysis.
The pandemic has wreaked havoc on the nation’s economy, as it has on most other economies around the world. According to the National Bureau of Statistics’ (NBS) Gross Domestic Product (GDP) survey, the manufacturing sector in Nigeria contracted by -1.51 per cent in fourth quarter of 2020, and by -2.75 per cent for the entire year.
One essential step toward repositioning Nigeria’s manufacturing sector for growth and prosperity in the year is to reconsider its industrialisation policy.
Following the COVID-19 pandemic and the challenges it presented on the economy, some of these policies by the CBN has seen GBfoods complete a N20 billion Tomato Processing Factory and Industrial Farm in Kebbi State, as well as localise the production of their Bama mayonnaise.
Last July, the apex bank banned the sale of forex in the import and export (I&E) window to importers of maize into the country. According to the bank, the decision is part of efforts to increase local production, stimulate rapid economic recovery, safeguard rural livelihoods.
More recently, CBN Governor, Godwin Emefiele, reaffirmed the bank’s commitment to encouraging companies willing to invest in the manufacturing sector to expand the economy.
Emefiele put words into action by hosting the signing of an Memorandum of Understanding (MoU) between Procter & Gamble (P&G) and Colori for the local production of Oral B, one of P&G’s Oral Care products, as part of the company’s efforts to localise production in Nigeria. The collaboration represents a $35 million investment.
“P&G have indicated to me that this is the first of many such projects and we are ready to support them achieve these localisation objectives,’’ the CBN Governor declared before calling on other multinationals to follow suit and collaborate with partners to strengthen industrialisation in Nigeria.
If there is a multinational brand that deserves support from the CBN, it’s definitely Procter and Gamble.
“Nigeria remains our manufacturing hub for West Africa. Our operations have generated over 4,000 direct and indirect jobs through our manufacturing operations in Ibadan and Lagos, and our general offices in Lagos,” Managing Director, P&G Nigeria Adil Farhat, said at the contract signing event.
Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, argued while reviewing the country’s manufacturing sector.
He said the sector generates wealth through trade and promotes innovation, which can include manufacturing efficiencies that aid economic growth, as well as scientific or technological breakthroughs that improve people’s lives.
Some believe that the Nigerian manufacturing sector is ailing. The productive sector is in a crisis as its average contribution to the nation’s GDP over the past few years has not gone beyond five per cent.
Analysts said the Federal Government could also support local industry and create jobs by reducing duties for raw materials and ensuring that the definitions of a raw material or finished product are indisputable.
Lower taxation and export incentivization policies of countries, such as China and manufacturing incentives in South Africa, have helped their manufacturers to produce cheaper products.