Nigeria has clinched the third position among Africa’s top 10 manufacturing countries. A survey conducted by The African Exponent, an analytical business information source for entrepreneurs and potential investors in Africa, placed Nigeria just below South Africa and Egypt in the continent’s manufacturing countries ranking.
The survey listed South Africa, Egypt, Nigeria, Morocco, Kenya, Algeria, Ethiopia, Ghana, Tunisia and Zambia as countries hosting the largest and most influential manufacturing companies in the continent.
Nigeria’s commanding position in the continent’s manufacturing list is boosted by expansive investments by leading local conglomerates like the Dangote Group and the BUA Group. The Dangote Cement has not only made Nigeria self-sufficient in cement production but has also given the country a firm grip of the cement markets in West and Central Africa.
Consequently, Ghana, Benin and Togo depend heavily on Nigeria for the supply of cement. That has created thousands of jobs as well as boosted Nigeria’s foreign exchange earnings.
The Dangote Cement’s control of the cement market in Africa is partially responsible for the record increase in Nigeria’s foreign exchange earnings which in November 2024 shot the country’s foreign reserves above the $40 billion mark.
The Dangote Refinery is another ingenious investment by the Dangote Group that has combined to catapult Nigeria to the enviable third position in the continent’s manufacturing list.
The Dangote Refinery has the capacity for refining 650,000 barrels of crude oil in a day.
Right now the giant refinery is gradually taking Nigeria out of its unholy dependence on imported refined petroleum products. The refinery will conserve the $20 billion Nigeria was spending annually on the importation of refined petroleum products. Perhaps, the most impressive contribution of the Dangote Refinery to Nigeria’s economy is its ability to rehabilitate Nigeria’s comatose petrochemical industry.
The industry was partially crippled by the high cost of imported raw materials as Nigeria’s four refineries failed simultaneously.
The export of all the country’s crude oil robbed the industry of residue from crude oil needed for processing into resins for use in the manufacture of plastic containers for the brewery and soft drinks industries.
That development escalated the cost of soft drinks to N500 per 60ml bottle as the cost of the plastic container outweighs the liquid content.
Besides the huge inroads into the export markets spearheaded by the Dangote Refinery, the intimidating conglomerate employs tens of thousands of Nigerians, thus reducing Nigeria’s unemployment rate which stood menacingly at 33.3 per cent at the last count in 2020.
The gains from the Dangote Refinery listed by the survey were earlier predicted by Godwin Emefiele, a former governor of the Central Bank of Nigeria (CBN), in an audience with foreign direct investors in the United States of America (USA) in 2022.
Emefiele in obvious excitement and sigh of relief hysterically lured foreign direct investors to Nigeria with the assurance that the Dangote Refinery and petrochemical plant, built at the cost of $20 billion in Lagos, would revitalise Nigeria’s economy.
He told the foreign investors that Nigeria spends 30 per cent of its annual foreign exchange earnings on refined petroleum products imports. Emefiele assured the foreign investors that when the Dangote Refinery comes on stream, Nigeria’s currency, the naira, will appreciate remarkably with the ending of refined petroleum products imports.
The ranking of Nigeria in the survey as the country hosting the third largest and most influential manufacturing companies in Africa shows that Emefiele was not misleading the foreign direct investors in 2022.
The BUA Group is another Nigerian manufacturing conglomerate acknowledged by the survey as contributing immensely to Nigeria’s enviable third position in the continent’s manufacturing list.
BUA is a leading firm in Nigeria’s cement industry. It is perhaps the second largest manufacturer of cement after the Dangote Group. The company is also prominent in the food processing segment of the manufacturing sector.
The survey also acknowledged the role of multinationals and small and medium enterprises (SMEs) in pushing Nigeria to the enviable third position in the continent’s manufacturing list. It listed multinationals like Nestle and Unilever as major contributors to Nigeria’s manufacturing sector’s impressive sprint in the continent’s manufacturing ranking.
The multi-nationals and SMEs cluster in industrial zones and free trade zones like the ones in Calabar and Lekki in Lagos will offer tax incentives and duty-free imports of raw materials along with easy access to ports.
Experts however contend that Nigeria will need massive investment in infrastructure, especially power, to sustain its recent rise in the continent’s manufacturing sector ranking.
Blueprint commends both the private sector investors and the federal government economic reforms that sprinted the country to the enviable post in the continent’s manufacturing list.
We however enjoin the federal government to tackle the country’s power problems and other infrastructure deficits with the required zeal to enable it sustain the rise in the continent’s manufacturing ranking. With an extensive market of 218 million people, Nigeria has the potential to lead the sector.