It is a well-known fact that industrialization and true inclusive economic growth cannot be achieved by focusing solely on primary products by John Coumantaros, Chairman, Flour Mill of Nigeria (FMN)
The Manufacturers Association of Nigeria MAN member has solicited for specific incentives provided to targeted sectors to develop the value chains in those sectors to achieve either import substitution or the development of export markets against specific measurable targets/milestones. Cited what was accomplished in the cement industry to drive home point.
John Coumantaros, Chairman, Flour Mill of Nigeria (FMN), made this called while delivering a keynote address on “Optimizing Value Chain To Maximize Growth And Competitiveness In The Manufacturing Sector” at the Nigeria Manufacturing And Equipment Expo (NME Expo) held at the landmark centre, Lagos.
Coumantaros commend the organizers of the EXPO for the opportunity to be a part of this discussion, on the very important subject, “Optimizing Value Chain to Maximize Growth and Competitiveness in the Manufacturing Sector” saying it is a well-known fact that industrialization and true inclusive economic growth cannot be achieved by focusing solely on primary products.
He pointed out that Nigeria needs a more diversified and stable alternative than oil to drive an economy that can feed and empower its growing population.
“The place of an integrated agriculture and manufacturing sector in this regard cannot be overemphasized.
“The Chairman said thus, the need to promote the real sector of the economy to stimulate sustainable economic growth that trickles down to the betterment of the populace.
“The first sector that comes to mind when you review the real sector of any economy is the manufacturing sector given its role in engendering inclusive growth. However, he said, the contribution of the manufacturing sector to gross domestic product (GDP) in Nigeriais low when compared to other emerging economies, a development that has been widely attributed to the country’s crude oil based, mono-product economy.
He urged MAN members to look inwards to explore ways of increasing the sector’s paltry 8.9 percent contribution to GDP.
Holistically, he said manufacturing itself is essentially the main component of all value chains adding that manufacturing can be accomplished through the efficient and careful development of value chains that facilitate higher-value-added processing using locally produced inputs and services in production.
For manufacturing in Nigeria to truly succeed and play its rightful role in being a significant contributor to GDP, we must look at all aspects of the value chain – from inbound Raw material procurement all the way to sales and after-sales service. While appreciated Federal Governments for increasingly recognizing the role of sectoral backward integration policies, which has provided incentives to look inward for inputs; as stakeholders in the private sector. He therefore said we (MAN) must take active roles in promoting manufacturing competitiveness in the country. For instance, due to Government’s backward integration policy and effort of key players in the Nigerian manufacturing industry, local sourcing of raw materials in Nigeria has increased from 47.2% in 2014 to 60.23% in 2018 according to a survey conducted by MAN.
The Chairman said this important topic, as we (MAN) to take a critical look at the Nigerian manufacturing sector and examine how it can play a role towards Nigeria achieving a more inclusive industrial development
Also, it gives us an opportunity to look at the seemingly obstinate challenges that we 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.
FMN Boss reminded MAN to evaluate the inherent benefits that may accrue to the sector from the impending ratification of the AfCFTA agreement. In addition, this discussion is coming at a very auspicious time for Nigeria as it once again transits for the end of one civilian administration to another, he said.
The Chairman pointed out that following the severe economic crisis, the country suffered in 2015/16 and the recession that lingered afterwards, the country appears to be back on a positive growth trajectory. However, for this growth momentum to be sustained, and more importantly, be at levels that would result in the desired transformation of Nigeria’s economy to a path of double-digit growth, continued attention must be given to addressing the structural rigidities and other binding constraints that are faced by manufacturing and other sectors, added he.