On Nov. 30, 2023, the Manufacturers Association of Nigeria (MAN) raised concerns about the limited supply of raw materials, which is hindering the nation’s manufacturing capacity. MAN emphasized the urgency for the Federal Government to promote investments in manufacturing, especially in sectors focusing on ‘backward integration’, to bolster local production.
MAN argued that backward integration could enhance the value of manufacturing firms, reduce import dependence, boost product competitiveness, and generate employment. This strategy aligns with Nigeria’s need for economic diversification, promoting growth, transformation, and employment through the development of local value chains.
Despite the government’s past initiatives for backward integration to curb raw material importation, challenges persist. Local manufacturers continue to face hurdles in accessing materials, citing poor access to credit and inadequate economic infrastructure.
Factors such as limited foreign exchange access, a stifling business environment, and infrastructure deficits compound these challenges. However, this situation also presents an opportunity to strengthen Nigeria’s import substitution agenda. Stakeholders urge the government to implement policies that discourage imports and incentivize local production.
To address these challenges, experts point out the need to confront issues like insecurity, poor infrastructure, and refining capacity. MAN President Francis Meshioye highlights the importance of embracing technology and sustainable practices to ensure self-reliance. He advocates for leveraging local materials and support services like financing and logistics.
Frank Onyebu, Chairman of MAN Apapa branch, criticizes the government’s commitment to the backward integration policy, citing dilapidated infrastructure and security concerns as major obstacles. He suggests creating industrial clusters designed to encourage backward integration, akin to practices in more developed economies.
Tunde Afolabi, General Manager of Ornua Nigeria, also calls for an enabling environment for local production, emphasizing government collaboration with stakeholders to devise effective strategies and timelines for self-sufficiency in key sectors.
The Director-General/CEO of the Raw Materials Research and Development Council, Prof. Hussaini Ibrahim, reiterates the council’s commitment to developing local raw materials and enhancing manufacturers’ access to essential resources, aiming to increase competitiveness in raw materials and product development.
In summary, MAN’s report underscores a critical need for government action to address raw material shortages in Nigeria’s manufacturing sector. This includes creating a supportive business environment, addressing infrastructure and security issues, and fostering collaboration with industry stakeholders for sustainable and self-reliant growth in manufacturing.
