In developed and developing countries, industrialisation is accepted as the major driving force of modern economy. In most economies therefore, industrial/manufacturing sector serves as the vehicle for the production of goods and services, the generation of employment and the enhancement of incomes. Hence, the sector is often described as the heart of every economy.
Unfortunately, the case is not the same here in Nigeria. Statistics show that the real sector is in precarious state requiring urgent attention.
Nigeria has in the past employed several strategies aimed at enhancing industrial productivity. But they all failed. For instance, Nigeria adopted the import substitution industrialization strategy during the First National Development Plan (1962-1968) which aimed at reducing the volume of imports of finished goods and encouraging foreign exchange savings by producing locally, some of the imported consumer goods. The country consolidated her import substitution industrialization strategy during the Second National Development Plan (1970-74) which actually fell within the oil boom era.
At that time, manufacturing activities were so organized to depend on imported inputs because of the weak technological base of the economy. However, as a result of the collapse of the world oil market in the early 1980s, there was a severe reduction in earnings from oil exports. Consequently, the import-dependent industrial structure that had emerged became unsustainable, owing to the paucity of earnings from oil exports which could not adequately pay for the huge import bills.
Various policy measures were adopted to ameliorate the above situation, such as the stabilization measures of 1982, the restrictive monetary policy and stringent exchange control measures of 1984. Like all previous measures, these ones also proved abortive. This led to the introduction of the Structural Adjustment Programme (SAP) in 1986. One of the main reasons for the introduction of SAP was to reduce high dependence of the economy on crude oil as the major foreign exchange earner, by promoting non-oil exports, particularly manufactured goods. But the contribution of the manufacturing sub-sector to Gross Domestic Production, GDP declined steadily, due to a number of factors. As a result, government introduced many other economic policies.
Sadly enough, despite all government efforts, the performance of the manufacturing sector is still abysmal.
Based on the foregoing, the keys to reversing the present poor state of Nigerian manufacturing sector are:- an increase in sectoral investment, improved capacity utilization from present 35% to about 85%, importation of right technology to boost local manufacturing, export-based economy which encourages local manufacturing, constant power supply, provision of motorable roads and rail system as well as friendly tax and exchange rate regime.
We agree with industrial experts that efficient manufacturing firms are more likely to export, more likely to invest and pay their workers more. A major ingredient in the successful transformation of most economies where there are sustained rises in per-capita incomes, is the growth in manufacturing output. An important policy issue facing the Nigerian government is understanding and addressing factors that enable efficiency of firms and their competitiveness to increase. This is because a sound economic policy is enormously important for economic development and poor policy results in a nexus of constraints from which escape is difficult, but not impossible.
Finally, increased industrial production should be sought through sustainable manufacturing by developing technologies to transform materials using processes and systems that are non-polluting, conserving of energy, economically rewarding and socially viable. This is a challenge the new administration of Muhammadu Buhari must give prompt attention to if it really wants to grow the economy, create jobs for the teeming jobless youths, promote local goods production and economics of scale.