In this article, EDET UDOH highlights the challenges faced by the Ministry of Industry, Trade and Investment and stakeholders’ expectations from the minister.
The Federal Ministry of Trade and Investment is responsible for diversifying the resource base of the economy by promoting trade and investment with special emphasis on increased production and export of non-oil and gas products.
It is also mandated to formulate policies that would help create wealth and employment, reduce poverty and ensure enhanced service delivery in a manner that would stimulate the growth of the domestic economy through industrialisation, trade and investment.
Administration of Charles Ugwuh
Close to actualising the objective was in 2007, when the then commerce and industry minister, Charles Ugwuh, introduced the Cluster Concept to drive industrilisation in Nigeria.
He did not stop at the policy formulation and introduction, but practicalised the concept by involving the United Nations Industrial Development Organisation (UNIDO) in commissioning the Common Facility Centre (CFC) for shoe manufacturers in Aba, Abia state on May 9, 2008.
The CFC, expected to boost Nigeria-made shoes to meet international standards, provided a common facility with requisite modern machines needed for the production of shoes and leather products.
The Aba CFC was the first bold step to actualise the federal government’s new industrial strategy anchored on the cluster concept. The project was a joint initiative of UNIDO, Abia State Government, Nigerian Export Promotion Council (NEPC) and the Ministry of Commerce and Industry.
With the training of the first batch of 32 shoemakers in the state, it was estimated that the centre would meet the training needs of over 20, 000 professional shoemakers located in the famous Ariaria Market, the home of Aba-made shoes.
At the commissioning, Ugwuh said, “If the centre is well managed, it would produce about N1.6 billion-worth of leather products by January 2009.”That was the last time Nigerians heard about the project as ministers who came after him abandoned the laudable project which would have industrialsed the country and reduced unemployment.
Systemic collapse of commerce, investment and real sector
Since then, stakeholders in the commerce, investment and indeed the real sector of the nation’s economy have witnessed the systemic collapse of the sector through negligence of the supersory body, which is also the parent ministry.The ministers who came after Ugwuh have all failed to resuscitate the Industrial Cluster Concept or formulate new policies that would boost the nation’s economy via revival of the real sector.It would be recalled that the rapid development in Europe was through the Industrial Revolution of the 18th Century in Britain. While Britain boosted its economy with industrialisation, Nigerian government has continually shown no interest, preferring crude oil export.
Effect of government’s disinterest
The government’s disinterest in industrialisation first hit the textile industry. It collapsed as a result of negligence by the ministry.
In December 2006, Michelin Nigeria Limited shut its factory due to the harsh operating environment (infrastructural deficiency, tariff structure, etc), disposed of its equipment and left after 43 years of operations in Nigeria.
In December 2008, barely six months after it scaled down production, Dunlop Nigeria Plc formally announced its decision to cease tyre manufacturing in the country.
The company, after declaring a loss of N2 billion at its 46th Annual General Meeting (AGM) in Lagos said that it was shutting down its tyre plant pending improvements in the country’s operating environment.As if that was not enough, Nigeria’s biggest indigenous manufacturing company, Dangote, announced that its cement exports from Nigeria to neighbouring countries fell 41 per cent in 2019 when Nigeria’s government closed the land borders.It also disclosed that the development has forced the dominant cement company in Africa to move its exports to Congo Republic, producing from plants in the country.Besides, Joseph Makoju, Dangote’s outgoing chief executive, lamented that the border closure by the Nigerian government led exports to drop to 0.5 million tonnes in 2019 from 0.7 million tonnes in both 2018 and 2017. He said the company had exported to West and Central Africa from Nigeria.
Makoju further revealed that the total production volumes last year was flat at 14.1 million tonnes. Higher discounts, marketing and haulage cost caused core profit to fall below 9.1 per cent while margins slid to 59.2 per cent, he said.“We undoubtedly faced several challenges last year,” Makoju said. Again, the federal government has increased Value Added Tax (VAT) from five percent to 7.5 percent without considering its consequences on the few manufacturing companies and the consumers.
Assessing the ministry
In all these, the Federal Ministry of Industry, Trade and Investment appears not doing enough to boost the nation’s economy via the non-oil sector. When the immediate past minister Okechukwu Enelamah was appointed in November 2015, stakeholders expected much from him but were disappointed as his tenure never brought any positive change.
Otunba Adeniyi Adebayo’s appointment
Now his successor, Otunba Adeniyi Adebayo appears to be following his footsteps. No one knows his agenda on industrialisation and commerce though he oversees the government’s goal of economic diversification to non-oil revenue earnings.
Following his inauguration by President Muhammadu Buhari on 21 August 2019, Adebayo became Nigeria’s 40th minister in charge of industry, trade and investment to oversee the government’s goal of economic diversification to non-oil revenue earnings.
Agenda for the new minister
The ministry is supposed to be leading in the promotion of government’s policies of Ease of Doing Business, job creation, poverty eradication and industrialisation.But the non-implementation of policies and programmes including standardisation of bilateral trade agreements, stimulating growth of domestic micro, small and medium enterprises (MSMEs) and lack of roadmap to increase Nigeria’s Foreign Direct Investment (FDIs) are some of the challenges of the ministry under a new minister.The success of Charles Ugwuh in the ministry in 2007 was largely his romance with all stakeholders including various chambers of commerce and industry; businessmen and journalists.
A regular meeting with such people would enable Adebayo to have empirical knowledge of the sector.Born on 4 February 1958, Adebayo had built a business and legal career spanning about 40 years. His experience is extensive in areas such as project financing, oil and gas, Commercial Law and business facilitation.He is a member of the Nigerian Bar Association (NBA) the International Bar Association, the Nigerian Institute of Management, a fellow of the Institute of Public Administration of Nigeria and a director of the Sickle Cell Foundation Nigeria. He is also a member of the Royal Commonwealth Society, Nigeria.
