The Nigerian Economic Summit Group (NESG) has openly declared that although there are diverse opportunities in the manufacturing sector, only N5.73 trillion has been invested into it. They said this in a report they released on Friday.
The report proves that the investment Nigeria claims to be putting into it and the actual investment being put into it is not the same and that just shows that the investors don’t have much confidence in the sector.
Below are some of the highlights of the report issued by the NESG.
Highlights are as follows;
The NESG stated that between 2019 & 2030, the investment declared was at US$46.4 billion and the manufacturing sector had 25% of these investments which is US$11.56 billion.
The NESG also noted that the actual FDI that came into the economy for those two years was US$1.96 billion (which was just 4% of the investment that had been announced) with sectors like Telecoms, Trade, Agriculture and Manufacturing, accounting for the larger inflows (NIPC, 2021).
According to them, one core reason the manufacturing sector has not attracted significant investments when placed in comparison with other countries is the lack of consistency in its policy and regulations.
The fact that the government keeps going back on their policies on importation, their clear lack of implementations of all they’ve declared in their policy documents and the regulatory setbacks are major factors that have trapped the manufacturing sector in Nigeria in an ineffective loop.
It’s important to know that this sector is also facing other challenges. Such as;
Inferior quality of infrastructure. This is one of the major problems of the manufacturing sector in Nigeria. It is the reason why the cost of production is way too high and it also a huge demotivating factor to potential investors.
Bad roads and incapacitated power supply. This is another major factor that makes it extremely difficult for businesses. It accounts for majority of the cost of operations for the businesses hence making it hard for them to focus on other areas in order to maximize their returns.
The World Bank in 2021 declared that businesses in Nigeria suffer losses of about $29 billion every year because of the devastating condition of electricity.
The Manufacturers Association of Nigeria (MAN) also collaborated with that information when they recorded that inadequate electricity supply and the high cost of other sources of energy are the top challenges hindering the sectors growth and efficiency.
The fact that the logistics process is so stiff necked also limits the sector in terms of performance.
