It is now clear from all indications that Nigeria’s economic growth has once again stalled since after the last recession that ended in 2016 or thereabouts. This new stagnation is in large measure due to the nagging issue of low industrial utilization. Industrial output, the main engine of employment has continued to dwindle in Nigeria for years now due to the persistent issues of irregular power supply, high lending rate and inadequate infrastructure. The question now is what is the quickest approach for government to adopt in order to achieve maximum industrial expansion in the shortest time. I propose government led industrialization. The Federal Government, as a matter of urgency should move quickly to identify key industrial sectors in Nigeria’s six geo-political zones where the country has comparative industrial advantage and lead an industrialization policy to boost output and expand the industrial base for increased employment. This will require government actually building manufacturing plants in sectors such as agro-allied; textile; pharmaceutical; leather and others that utilize locally sourced materials. If properly planned and executed, this policy will cost the Federal Government not more than $120 million annually. Each of the six geopolitical zones will receive $20 million in investment. If this policy is sustained over a five-year period, Nigeria’s industrial landscape and outlook will forever change. This will result in an unprecedented industrial growth and expansion that will guarantee many Nigerians, particularly the youth, a reasonable chance at employment. Yes, these manufacturing outfits will be fitted with a minimum of two power generators and with a diesel tank built at the site to ensure round-the-clock manufacturing activity, even without public power supply.
Some might wonder, and rightfully so, why I encourage government to get involved in industrial production when Nigeria is going towards privatization. I am proposing a different model. In the sixties, seventies and some parts of the eighties, what the Nigerian government did was to build and own industries. These government owned enterprises are today largely unprofitable and should be sold. My proposal deals with a new approach of “Build and Sale” rather than “Build and Own”. This will be a mercantile economic program; a concept that has led to accelerated economic growth and expansion in many Asian countries – China, South Korea, Taiwan, Singapore and Malaysia.
“Build and Sale” industrial policy will have government build industrial manufacturing plants and sale them to primarily local investors vetted and pre-selected in competitive bidding processes, who have knowledge and experience in the industries. The private investors will obtain government subsidized single digit low interest loans from commercial banks and acquire a majority interest in the companies while the government retains a minority interest. Anything short of this will further prolong the ongoing industrial underutilization for an even longer period.
Further, waiting for public power supply and infrastructure to become stable and regular or for lending rates to drop down to single digit is unrealistic and will forever delay Nigeria’s industrialization, guaranteeing continued economic hardship for generations of Nigerians.
Dr. Anusiem is a United States of America-based Attorney.