Posted Mon, Aug 26, 2024 11:48 AM

NESG Hosts Pre NES 30 Webinar on Revitalizing Nigeria’s Manufacturing Sector

On August 23rd, 2024, the Nigerian Economic Summit Group (NESG) held a pre-summit webinar ahead of the 30th Nigerian Economic Summit, focusing on the theme: "Reversing the Decline: Strategies for Stabilizing Nigeria's Manufacturing Sector." The event gathered key stakeholders to discuss solutions for halting the decline in Nigeria's manufacturing industry and examining how current economic reforms impact the sector's operations. The goal was to set the stage for actionable policy and non-policy measures to address both immediate and long-term challenges.

Opening Remarks and Context

Dr. Muda Yusuf, Thematic Lead of the Manufacturing Group, who represented Engr. Mansur Ahmed, Private Sector Co-Chair of the Manufacturing and Mining Policy Commission (MMPC) Steering Committee, highlighted the significant role of the manufacturing sector in Nigeria’s development. Despite its potential, the sector faces numerous challenges, such as inadequate infrastructure, fluctuating exchange rates, and poor access to finance. Dr. Yusuf emphasized the importance of industrialization in driving economic growth, as seen in Europe and North America, and stressed the need for a thriving manufacturing sector supported by innovation, infrastructure, and strong economic policies.

Key Insights and Recommendations

Mr. Olakunle Alake, Vice President of Dangote Industries Limited and NESG Board Member, welcomed participants and pointed out that Nigeria’s manufacturing sector, which contributes only 8% to the GDP, faces stagnation due to issues like erratic power supply and inadequate infrastructure. He stressed the need for collaboration between the public and private sectors to develop policies that stabilize and rejuvenate the sector. Mr. Alake also noted that prioritizing Sustainable Development Goal (SDG) 9, which focuses on building resilient infrastructure and fostering innovation, is crucial for achieving broader economic and social goals.

Lumun Amanda Feese, Facilitator of the Manufacturing and Mining Policy Commission, delivered a presentation on "Re-imaging Industrialization: Leveraging Nigeria’s Natural Resources to Accelerate Industrialization." She suggested that Nigeria could learn from countries like Sweden, Finland, Australia, and the USA, which have successfully used their natural resources to drive industrialization through innovation and technology. She emphasized the need for robust public-private partnerships and collaboration among stakeholders to ensure the sector's growth.

Soromidayo George, Director of Corporate Affairs and Sustainability at Coca-Cola Hellenic Bottling Company Plc and Chairman of the Non-Alcoholic Drinks Sector of the Manufacturers Association of Nigeria, discussed the impact of recent economic reforms on the Fast-Moving Consumer Goods (FMCG) industry. She highlighted the sector's potential to reduce poverty by creating jobs and promoting economic diversification. However, she stressed the urgency of implementing effective strategies and policies that align with Nigeria’s cultural context and are backed by data.

Chijioke Uwaegbute, Partner & Tax Leader at PwC Nigeria, offered strategic recommendations to stabilize the manufacturing industry. He advocated for a temporary freeze on increasing levies and tax rates for 1 to 2 years to help the sector recover. He also called for simplifying processes for accessing export expansion grants and other incentives, noting that some manufacturers currently face tax rates as high as 45%.

Afolabi Olorode, Acting Managing Director of FBN Quest Merchant Bank, spoke about enhancing financial resilience to mitigate risks associated with foreign exchange volatility, scarcity, and inflation. He highlighted the importance of better capitalization for manufacturing companies to balance debt pressures and suggested that Nigeria's relatively low labor costs offer an opportunity to develop a skilled workforce in technical production and manufacturing.

Looking Ahead

The discussions from this pre-summit event will inform the 30th Nigerian Economic Summit, scheduled for October 14-16, 2024, at the Transcorp Hilton Hotel in Abuja. The summit aims to foster diverse perspectives and collective expertise to address common challenges and create sustainable economic progress for Nigeria and the African continent.

For more information and to register for NES#30, please visit www.nesgroup.org/30.