Nigeria’s $1trn dream: Experts weigh in on manufacturing sector’s potential

Stanley Ihedigbo

Stakeholders have weighed the manufacturing sector’s potential to drive Nigeria’s economic growth to achieve its $1trn dream in 2030.

Speaking at the Commerce and Industry Correspondents Association of Nigeria (CICAN) annual conference and awards ceremony on Thursday, with the theme, “Manufacturing: $1trn GDP Target by 2030: Realities & Possibilities,” they highlighted the challenges and opportunities facing the industry.

Stakeholders urged the government to prioritize investments in transportation, energy, and technology, as well as to develop industrial parks and special economic zones.

The Director-General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agricultural (NAACIMA), Dr. Olusola Ovadimu, said that there should be an urgent need to reposition Nigeria’s manufacturing sector as a cornerstone for economic growth and development.

“Nigeria’s economic performance in recent years has shown both resilience and areas for improvement. According to the National Bureau of Statistics (NBS), the country’s Gross Domestic Product (GDP) grew by 3.19% in the second quarter of 2024, up from 2.51% in the same period of 2023. While this growth is encouraging, it remains insufficient to achieve the ambitious $1 trillion GDP target by 2030, given our current GDP of approximately $384 billion.

“Historical lessons offer hope. In 2014, Nigeria’s GDP experienced a dramatic leap from $270 billion to $510 billion following a rebasing exercise, an increase of 89%. Today, with another rebasing on the horizon, we are optimistic about identifying additional growth areas. However, achieving sustainable growth requires more than statistical adjustments; it demands structural reforms, strategic investments, and unwavering commitment.

“The manufacturing sector, which currently contributes approximately 9% to Nigeria’s GDP, has the potential to be a game-changer. With improved infrastructure, enhanced access to financing, and policies that promote local production, this sector could significantly boost economic output. Countries with similar aspirations have leveraged manufacturing to increase their GDP contributions to as much as 20–30%, creating jobs and fostering economic inclusivity.

“However, several challenges persist. The infrastructure deficit, which currently stands at 35% of GDP, undermines efficiency and increases production costs. Inadequate power supply, estimated to cost businesses over $29 billion annually, further complicates the operating environment. Additionally, recent fluctuations in the naira and inflationary pressures exacerbate these issues, emphasizing the need for robust and stable macroeconomic policies”, he stated.

According to him, NACCIMA firmly believes that a thriving manufacturing sector is pivotal for Nigeria’s economic transformation.

He urged the government to, prioritize investments in transportation, energy, and technology to reduce production costs.

” Develop more industrial parks and special economic zones to enhance economies of scale and attract foreign investment. Invest in local raw material sources to minimize reliance on imports and enhance competitiveness. Equip the workforce with the skills necessary for modern manufacturing processes.

“Achieving a $1 trillion GDP by 2030 is ambitious but within reach if we align our priorities, forge public-private partnerships, and implement pragmatic policies. Events like this CICAN National Conference provide a platform to deliberate on actionable solutions and galvanize stakeholders toward our shared objectives, which is aimed at advocating for policies that will continue to enhance the growth and development of the Nigerian private sector/business community, ” he stated.

Former Chairman and Council Member, Non-Metallic Mineral Products Sectoral Group, Mr. Afam Mallinson Ukatu, said that to chart a bold path forward as the nation face both opportunities and challenges within their dynamic sector.

“Once again, I wish to call for more investment in the non-metallic mining sector. This is because this sector, if well harnessed can lift Nigeria out of the economic quagmire. This sector is very rich.

“Moreover, until the country looks away from the oil sector, it will be very difficult to come out of the woods. Important to note is that it costs less to invest in the mining sector than in the oil sector, which has more returns on investment.

” I urge the Federal Government of Nigeria to urgently rework the policies of the sector, which has gone obsolete, to make it more investment-friendly and attractive,” he emphasized.

According to him, the mining sector and its value chain can generate over 15 million jobs (direct and indirect jobs), thereby addressing the ever-growing unemployment ravaging the country.

“Worthy of note is that innovation, technology, and sustainability are key drivers of growth, and as the government shifts focus towards economic diversification, our industry stands poised to play a pivotal role in Nigeria’s future development. We eagerly anticipate the ideas and strategies that will emerge from today’s discussions, particularly on global trends that can drive transformation in industrial activities.

“Our sector is a critical contributor to national development, especially in addressing Nigeria’s housing deficit, currently estimated at 28 million. This gap presents a significant opportunity for members in the production of essential materials needed to close the housing shortfall.

“We must align our efforts with national strategies to help overcome this challenge, a task we believe today’s deliberations will greatly contribute to. Irrespective of the various obstacles we face, ranging from infrastructure deficits, regulatory burdens, the threat of substandard imports, and massive invasion of the sector by some foreigners who connive with some unpatriotic Nigerians to disorganize the sector, we remain resolute. Our industry has shown resilience, and with pragmatic solutions, and we must be prepared to compete both locally and across the continent. Together, we can drive our sector toward greater achievements and ensure our competitiveness on a global scale.

“On the rule of law, the government needs to look into multiple taxes and how it is administered. The three tiers of government should encourage more people to participate in the mining and allow others to come up, knowing what is needed to boost the country’s GDP,” he stressed.

Special Adviser to Lagos State Government on Public Private Partnerships, Mrs. Bukola Odoe represented by Consultant and Financial Analyst, Lagos State Office of Public-Private Partnerships, Mr. Adefisoye Adekunle, noted that ongoing discussions surrounding the proposed new tax bill in the National Assembly are needed for a balanced approach to tax collection that fosters economic growth and development fairly and equitably.

She said enhancing tax collection processes not only boosts revenue generation but also contributes to sustainable economic progress, supporting the realization of national economic targets.

“We need to focus and optimize our collection process, make it simpler, make it easier in such a way that people with a small Phone, Android can access, you can access your tax, and you can pay without any stress.”

She explained that the importance of fiscal policy in the context of national development needs sustainable revenue generation for progress.

She pointed out the significance of non-oil taxes for states that lack control over oil revenue.

She underscored the need for prudent financial management by states for the benefit of their citizens.

She further expressed her support for a bill that aims to streamline and update tax laws, ensuring that taxes are levied appropriately and collected efficiently.

She highlighted the proposed integration of technology in tax administration to simplify processes and enhance compliance.

She said the anticipated amendment of the current VAT Acts is in alignment with the proposed bill.

She also emphasized the pivotal role of infrastructure sustainability in facilitating tax reforms, advocating for the automation of revenue collection processes in Nigeria to improve effectiveness and transparency.

“There is a saying that there is no budget without revenue. When you look at the key sectors of Nigeria’s economy, health care, road infrastructure development, power, and education, anything you can talk about, we need money to do most of these things. There is a need to automate the revenue collection process in Nigeria and sub-national”

The National Chairman of CICAN, Mr. Charles Okonji, in his address, highlighted the concerning state of Nigeria’s private sector, which serves as the economy’s driving force.

He expressed deep worry over the sector’s poor health, noting that even government interventions have failed to address the challenges.

“The repercussions are evident, with many multinational corporations relocating to neighbouring countries due to unfavourable business conditions,” he stated.

Okonji stressed the critical role of production in a nation’s greatness, saying without a vibrant private sector driving innovation and economic growth, Nigeria risks falling behind in the global market.

“It is imperative for policymakers and stakeholders to collaborate on effective strategies that will rejuvenate the private sector and attract investments that will propel Nigeria towards prosperity.

“The ambitious target, however, also raises concerns, especially with the potential disruptions caused by the intermittent changes in government leadership in Nigeria. The lack of sustained policies and strategies across different administrations could impede progress towards achieving such a significant economic milestone by 2030.

“Despite these challenges, the confidence expressed in the capabilities of the experts present at the event is reassuring. It reflects a collective determination to navigate the complexities and uncertainties surrounding the manufacturing sector.”

Okonji, while emphasizing the importance of stakeholder engagement and collaboration, particularly with CICAN, underscores the need for unity and advocacy to drive meaningful change.

“By involving key industry players and leveraging their collective voice to influence government decisions, there is a greater likelihood of shaping policies that not only support local businesses but also contribute to the overall growth and sustainability of the manufacturing sector in Nigeria”, he said.