The near-collapse of Nigeria’s petrochemical industries, made worse by the country’s inability to attain self-sufficiency in producing chemical products, forced the federal government to spend a whopping N4.97 trillion between 2017 and 2020 on importation of the products.
Director of Research and Advocacy Support of the Manufacturers Association of Nigeria (MAN), Dr Oluwasegun Osidipe, who disclosed this, said the country’s chances of development remained grim if no deliberate effort was made to stop the “huge drain on Nigeria’s external reserves” on the importation of chemical products.
Dr Osidipe made the disclosure during a public lecture organised by the Nigerian Society of Chemical Engineers (NSChE), FCT/Nasarawa Chapter in Abuja recently on the topic: ‘Manufacturing as the key engine for economic growth.”
He said, “Nigeria’s imports of chemical products was N905 billion in 2017; increased to N990 billion in 2018; N1.39 trillion in 2019; and N2.68 trillion in 2020 according to the National Bureau of Statistics. These huge imports constitute huge drain on Nigeria’s external reserves with pressure on the Naira value, even though some of the chemicals could have been produced locally.”
The lecturer lamented the collapse of petrochemical industries in the early 1990s which adversely affected chemical supply and production in the manufacturing sector.
Describing the heavy reliance on importation of chemical materials despite the “highly unfavourable exchange rate parity accounts for the high cost of production and low competitiveness of the sector,” Osidipe said the challenges involved in accessing forex has also led to high cost of electricity for consumers.
Some issues stifling the manufacturing sector, according to Dr Osidipe, include “high cost of transportation due to the hiking of refined petroleum products and bad roads; low demand of commodity caused by backlog of unpaid salaries; high cost of borrowing from the commercial banks over-regulation by all tiers of Government and lack of synergy between Research, Professional, Tertiary Institutions & the Industry Economics & Statistics Department,” among others.
Apart from stressing on the need to develop key sectors and industries “with high inter-industry linkages (machine industry, iron & steel, petrochemical sectors, etc),” Osidipe also called for “providing adequate incentive (monetary and fiscal incentives) companies embarking on backward integration and encouraging more investments in petro-chemical, machinery and iron & Steel development with appropriate incentives,” among others in order to revive the comatose manufacturing sector.
Comparing China and Nigeria’s industrial development to demonstrate the extent manufacturing plays in determining the per capita income and rate of development, the lecturer noted that development in China is hinged on manufacturing as “the key to long term social and economic development of any country.”
“This development trajectory of China far outpaced that of Nigeria within the same period even though Nigeria began with a better footing. From 1960 to 2003 Nigeria’s Per Capita Income was US$508.22, which is higher than the China’s US$342.09 at that period. China moved up the ladder from 2004 to 2019 when Nigeria’s Per Capita Income averaged US$2, 175.01 and US$2,425.12 from 2014-2019, while employment was recorded higher at 22.56% in 2018,” he said.
The occasion, chaired by the National President of the NSChE, Engr. Saidu A. Mohammed, also witnessed a certificate of recognition given to five members of the society.
