The assertion last week by the New Nigeria Development Company Limited (NNDC) that poor government policies are responsible for the poor performance and total closure of most investment companies should indeed rattle the nation’s policy makers.
As a matter of fact, the disclosure is call on the government to review its economic policies with a view to boosting and encouraging industrialisation.
Chairman of NNDC, Alhaji Bashir Dalhatu Wazirin Dutse, who made the disclosing during the maiden edition conference for state-owned investment companies from the North-west, North-east and Northcentral organised by Kano State Investment and Properties Limited (KSIP), said that in most cases, government policies are in themselves responsible for the folding of such investment. He said that as important as banks are to the development of modern economy, it is sad to note that the 19 northern states presently own no bank as theirs, when compared to the initial state in the late 1970s and early 1980s when the North had nine banks.
In his address, chief host of the occasion and Governor of Kano State, Dr. Abdullahi Umar Ganduje, represented by the Commissioner for Works, Engineer Aminu Aliyu Wudil, stated that the company’s equity investment had risen from N1.2 billion in 2015 to N1.5 billion as at December 2018 through restructuring of its investment and adoption of e-trading system.
The NNDC’s assertion is coming at the heels of a protest by the organised labour on the rate of de-industrialisation in Nigerian economy. Labour lamented that the manufacturing continues to decline due to the challenges of inadequate power supply, high cost of credit, inadequate foreign exchange supply and depreciating value of the naira.
Speaking, President of Nigeria Labour Congress, NLC, Ayuba Wabba, noted that “this trend needs to be reversed with a focus on key areas of the economy such as automobile, textile, petrochemical, agro allied, refineries, fertilizer and pharmaceutical industries. Other areas with great potential for growth and development include building materials, milling, paper and paper products, solid minerals, iron and steel and boat building, etc.”
Corroborating Wabba, President of Trade Union Congress of Nigeria, TUC, Bobboi Kaigama, said there is no company that currently spends less than half a billion naira to power their plants in a month. He said diesel now sells for between N250 and N300 per litre, noting that “those that could not sustain their businesses have left the shores of the country but their products still flood our markets.
Who is losing?” He said the food and beverage sector had in its employ millions of workers until recently when the issue of violation of collective agreement and redundancy arising from forex problems, etc became the order of the day. “At its peak, the textile sector provided direct jobs to close to half a million of Nigerians and millions of indirect jobs.
Sadly, over 90% core investors have since gone into importation. The footwear and leather industry is combating with the challenges of influx of fake tyres from China and fairly used ones.” The labour leader urged government to assist through policies to curb further closure of companies. The same evil that befell the textile, food and beverage, footwear and leather sectors have since befallen the pharmaceutical and chemical, aviation and iron and steel sectors, etc. Despite billions of naira so far spent on Aladja, Katsina and Ajaokuta they are yet to fully come on stream.
The pulp and paper industries at Jebba, Iwopin and Oku-Iboku have all long been abandoned and forgotten despite several appeals to government. It is not a plus that 21st century Nigeria still imports paper even with all the trees all over the country.
There is no doubt that the Nigerian economy, the largest in Africa with a population of 180 million, is underdeveloped. Between 2011 and 2012, the oil and gas sector dominated GDP, accounting for over 95 per cent of export earnings and about 85 per cent of government revenue.
The industrial sector accounts for 6 per cent of economic activity, while in 2011, the manufacturing sector contributed only 4 per cent to GDP. The poor performance of the manufacturing is largely attributed the over-reliance on the oil revenue over the last 50 years.
At independence in 1960, and for much of that decade, agriculture was the mainstay of the Nigerian economy. The sector provided food and employment for the populace, raw materials for the nascent industrial sector, and generated the bulk of government revenue and foreign exchange earnings. Following the discovery of oil and its exploration and exportation in commercial quantities, the fortunes of agriculture gradually diminished.
We, therefore, urge the federal government to arrest the drift by diversifying the economy and formulating policies that promote industrialisation. Factors militating against economic growth such as insecurity, high interest rates, corruption, high exchange rate, poor power supply, among others, must be eliminated.
Government must also move swiftly to revive ailing industries, create jobs, conserve foreign exchange by reducing imports and grow national reserves in order to make Nigeria the industrial hub of Africa.