ADESINA AND OPTIONS FOR REVERSING OUR INDUSTRIAL ARREST
Ayo Olukotun
"The future benefits those who anticipate and prepare…Nigeria must look beyond the industries of today into the industries of the future and develop a plan and capacity to compete."
African Development Bank Group President, Dr. Akinwunmi Adesina at a lecture to the Manufacturers' Association of Nigeria.
Tuesday, October 26, 2021.
A few years before he passed on, elder statesman, Chief Obafemi Awolowo, was asked a question on what his vision for Nigeria was. Awolowo replied that first and foremost, he would like to see an industrialized Nigeria. The statesman and politician could not have foreseen that such a prospect would not materialize, not only during his lifetime but in the lifetime of his youngest daughter, the Amazon, Dr. Tokunbo Awolowo Dosunmu who turned 70 a few years ago. Let us not forget that Awolowo had kick-started an industrial future for Nigeria in the 1950s and the 1960s. At the time, countries like Malaysia, Indonesia, South Korea, even China, were at the same low level of industrialization as Nigeria and depended primarily on the export of raw materials and unprocessed products. Fast forward to 2020, and we find that these other counties have become prominent industrial powers with diversified export bases and with a clear foothold in the emergent 4th Industrial Revolution. This desultory background provides a context for the lecture delivered last week by the President of the African Development Bank Group, Dr. Akinwunmi Adesina, quoted at the outset of this column.
Adesina, in what can be considered a manifesto for a revitalized industrial future for Nigeria, laments the several woes and disabling environment that continue to arrest Nigeria's industrial potential. One of the problems, as he points out, is not the lack of ideas or blueprints, for as he says, even the first National Development Plan of the 1960s envisaged Nigeria's industrial development. Obviously, such programmes as the National Economic Empowerment and Development Strategy, Vision 2010, Vision 2020 as well as Nigeria's Industrial Master Plan, clearly envisaged the industrialization of Nigeria on the scale of the Asian Tigers.
The issue, however, as the lecturer noted is the lack of implementation and follow-up to bring these dreams to actualization. He buttresses the widening gap between Nigeria's manufacturing sector and those of the Asian Tigers by pointing out that Malaysia diversified its economy away from an agricultural base consisting of rubber and palm oil through heavy investment in high-tech sectors such as electronics. Consequently, last year, the value of Malaysia's total exports which included computers, vegetable oils, semi-conductors and machinery stood at 234 billion dollars. By contrast, Nigeria, which started the industrial race at about the same time as Malaysia, had total exports worth of 33.5 billion dollars consisting mainly of oil. In other words, not much has changed since the 1960s and 1970s despite the harvest of promises not kept and blueprints not executed.
Why is this so? Principal among the deficits and debilities of the manufacturing sector is the lack of steady supply of electricity, an albatross which has defied every successive government, high spending and several campaign promises. For sure, this is a problem that affects the Nigerian work culture to an unimaginable degree. Consider for example what the lack of steady and predictable electricity supply means to an academic expected to write world-class papers and do experiments in modern laboratories. As Adesina demonstrated, it is even more devastating for the manufacturing sector–small-scale or large scale – because any manufacturer is compelled to spend huge sums on providing their own electricity. He reveals also that it is in pursuit of solutions to this unending problem that the AfDB has invested and supplemented heavily Nigeria's power sector.
The lecturer, also a diplomat, did not ask the question whether the sums poured into that sector had yielded commensurate dividends, but going by the continuing ailments of power supply, it can be inferred that very little improvements so far has attended foreign and internal expenditure on the sector. So, the country continues to be stranded by infrastructural limitations and inability to scale the hurdle of those accoutrements that would have aided its industrial takeoff. Unsurprisingly, therefore, rather than attract much needed foreign investment, several companies hitherto operating in Nigeria have had to relocate to some neighbouring countries where the ease of doing business is more than a rhetorical claim. That is not all.
There is also such disheveling factors as the port congestion, especially in Apapa. Quoting a Financial Times report, Adesina maintains that "the port in Lagos has become so bad that it could cost more than 4 thousand dollars to truck a container 20 kilometers inland, almost as much as it costs to ship it 12 thousand nautical miles from China". As well known, the congestion at Apapa port, despite minimal advancements, has enigmatically continued to defy several task forces, ultimatums and proposed remedies. Other matters such as the astonishingly high interest rate, which is a disincentive to borrowing, feature in the lecture. He provides comparative data by citing the low interest rates in such countries as Japan (-0.1%), USA (3.9%), China (0.25%), and India (4%). Compare this to Nigeria's 15% and you will begin to grasp how uphill the journey to entrepreneurship, which is facilitated in other climes by the low cost of borrowing, can be. There also is the instability of the foreign exchange sector with multiple exchange rates prevalent, providing opportunities for a non-industrial strata to make fast bucks from differences between the formal and so-called black markets.
Engagingly, a good part of the lecture is devoted to panaceas and solutions for lifting Nigeria from its current industrial backwardness. Fortunately, because as the technocrat argues, the future of manufacturing is digital, we can skip stages in what experts in industrial change call the law of combined and even development. In this respect, rather than behave like Generals preparing for the last war, we simply find how to plug ourselves into the digital wave which underlies most current manufacturing. As the opening quote drawn from the lecture suggests, this takes a lot of planning and thinking outside the box of jaded policies that have failed us. That apart, Adesina provides the concept that we should leverage on our comparative advantage in agriculture through a massive programme of agro-industrial enterprises from which several countries across the globe are currently earning windfall profits. He reveals that the AfDB in partnership with state and federal governments as well as other agencies, is currently in collaboration to turn agro-industrial manufacturing into the goldmine of the future. If the idea succeeds in spite of the usual bottlenecks, Nigeria may well be entering a new industrial age through a door that has been there all the while but which successive governments have failed to take advantage of.
Interestingly, most of the countries cited by the lecture for industrial advancement are developmental states which reorientated their politics and institutions to comprehensively drive economic development. Arising from the lecture, part of the debate should now be: is Nigeria ready to transform into a developmental state considering that these states managed to drastically reduce poverty whereas Nigeria has been fiddling with, more or less, a jobless growth model?
Hopefully, some of the ideas canvassed at the lecture will find its way into policy-making circles for collective profits.
Professor Ayo Olukotun is a director at the Oba (Dr.) S. K. Adetona Institute of Governance Studies, Olabisi Onabanjo University, Ago Iwoye.
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