Made in Nigeria whither the route for Nigeria
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The document discusses Nigeria's potential in manufacturing and economic development by drawing comparisons to successful models such as the Asian Tigers. It highlights Nigeria's large consumer market, natural resources, and labor force, while also addressing challenges like poor infrastructure and reliance on oil. Strategies for growth include diversifying the economy, enhancing industrial capacity, and fostering international competitive advantages through investment and trade agreements.
Made in Nigeria whither the route for Nigeria
- 1. Made in Nigeria WHITER THE ROUTE FOR NIGERIA? By Bolaji Okusaga
- 2. Content No Subject Slides 1. In the Beginning 3 - 8 2. The Reality 9 - 13 3. Recreating the Reality 14 -20
- 3. 1. In the Beginning WHITER THE ROUTE FOR NIGERIA?
- 4. Made in Nigeria - The Objective GLOBAL REALITY • World over, manufacturing and productive activities play a major role in the improvement of a nations economic fortunes THE BENCHMARK • Following the examples of the Asian Tigers Nigeria intends to initiate an active campaign towards driving in In-bound Manufacturing opportunities GETTING THERE… • The Nigeria Made in Nigeria Show is therefore one of the tactical imperatives for achieving the target objective.
- 5. Nigeria’s Competitive Edge Large indigenous consumer market Abundant natural resources Strong agricultural base Hardworking and resourceful labor force Central location in Africa Pros: Largest market in Africa Young Population Cheaper Labour Cons: Red-tape Unclear Policies Tough Operating Environment
- 6. Nigeria Has a Large Market Over 190 million people 70% population under 45 Nigeria has a large indigenous consumer market… Strong pent-up demand for quality products ◦ Foreign branded goods ◦ Franchised foreign retailing ◦ Automobiles ◦ Consumer financial services
- 7. Nigeria Has Abundant Natural Resources Large Petroleum and Large natural gas reserves ◦ Sixth Largest Crude Oil Producer in the World A huge variety of natural resources: COAL South East (Enugu) GOLD South West and parts of North- Central COLUMBITE AND TANTALITE North Central especially around Plateau and Nasarawa States BITUMEN South West and Edo State IRON ORE North-Central, around Ajaokuta URANIUM Cross River State, Adamawa State, Taraba State, Plateau State, Bauchi State, and Kano State
- 8. Nigeria Has a Large Arable Land and Agricultural Base Nigeria has ecosystems, arable lands and yield gaps that can be exploited: Well over two-third of the land is cultivable: 30,850 thousand hectares of Arable Land Rainfall supports rain-fed agriculture in the whole of Nigeria Northern, irrigated agriculture predominates in the area around the Lake T-Chad Basin
- 9. 2. The Reality WHITER THE ROUTE FOR NIGERIA?
- 10. Implications of Building Foreign Earnings on a Wasting Asset The Need to raise Industrial capacity in the Economy • Agriculture accounts for over 60% employment, but weak infrastructure and a lack of a value chain approach to sector development militates against growth • Petroleum Industry’s rating is poor given the fact that the down-stream sector remains largely undeveloped • Mining is basically absent on the radar because of a lack of policy and regulatory environment to harness this great potential Crude Oil is a Wasting Asset • It is projected by 2048 Nigeria’s Oil Reserves will dry up • The invention of Electric Cars, Shale Oil and mainstreaming of alternative energy sources also spell doom for Crude Oil Commodities will not mean much except it is backed with value addition • Without secondary industries that add value to Agricultural output, poverty and underdevelopment will continue to plague the Nation
- 11. 11 The Development Plans under the Military NEEDS Seven-Point Agenda Economic Recovery and Growth Plan ERGP Development Policies Examined: The broad goals are : Lowering of domestic cost structure especially infrastructure cost Strong promotion of exports Harmonization of tariffs across ECOWAS to create the common external tariff (CET); Use of systemic import restrictions in particular in particular sectors to quicken local capacity The restructuring of institutions responsible for trade facilitation
- 12. Little has been achieved in terms of rebalancing the Economy by diversifying its productive base. The Reality…
- 13. The Challenge – The Oil Doom of 2014 - 2017 Removal of 41 Items from Official Forex Allocation Sourcing of imported materials was negatively impacted by the ban on 41 items from forex Local sourcing of materials was extremely high on pricing in comparison to importation of raw materials Drop in oil price: Largest contributor to Nigeria’s FX earnings and government revenue Declining reserves: FX reserves declined to USD30.3bn (November 2015) from USD34.6bn at the beginning of the year due to significantly lower oil revenues. Devaluation of naira: In Feb 2015 with the closure of the WDAS/RDAS window. Tightened FX market: Restrictions on forex transactions: “41 items introduced”. Demand / supply disparity: Corporate demand rationed with an estimated backlog of around USD3.0bn. The Reaction Source: Standard Bank
- 14. 3. Recreating the Reality WHITER THE ROUTE FOR NIGERIA?
- 15. Porter’s five forces – Diamond Model Substitute Products RivalryCustomers New Entrants Suppliers • Michael Porter believes that the competitiveness of a businesses is related to the performance of other businesses - Business Clusters • He identifies five forces which shape competitiveness: • Michael Porter uses the concept of clusters of identical product groups in which there is considerable competitive pressure. • Businesses within clusters usually stimulate each other to increase productivity, foster innovation and improve business results.
- 16. Porters Diamond Model Explained • Learn to be More Innovation • Learn to be More Productivity Competition Pressure • Search for new markets • Pressure to out play Cluster Competitor Need for Market Expansion • Able to withstand international competitive pressure given the high Innovation and Productivity already ingrained in their operationsTransnational Success • Given their experiences in local competitive clusters such companies are able to survive and out- perform peers in foreign markets. Examples of large clusters are the Swiss watch industry and the Hollywood film industry. The German and Japanese Car Market, etc. Translating national advantages into international advantages.
- 17. Factor Conditions Location – Ports, Major markets Labor – High concentration of skilled Labour Government – policies for trade, education Strategy and Structure What is the strategic push of Nigerian local businesses Demand Conditions What is the disposable income of the Average Nigerian Porter Diamond theory of National Advantage Related/Supported Industries Where are the Primary Producers •Where are the Cottage Industries
- 18. The Role of Trade TRADE AS PLATFORM The need for cooperation with other African and developing countries to ensure that the WTO trade negotiations address the concerns and interests of Nigeria including the negotiation of Economic Partnership Agreements (EPAs); We have seen the recent attempts by Morrocco to join ECOWAS and the push by European Union to push its trade agenda
- 19. The Role of Investments FDI is a means to development, not an end in itself Complementary domestic policies are needed to facilitate spillovers, growth and environmental protection Trade and financial agreements must preserve the ‘policy space’ for complementary efforts on a national scale • FDI is Good, but real development comes from domesticating our advantages first
- 20. Critical Success Factor – Growing an Home Advantage A holistic approach, where Nigeria would tie into the on going reforms of the Federal Government, by lending a voice to the call on Nigerians in Diaspora to come back home, and in so doing, begin a decision towards taking an economic stake in Nigeria Subtly projecting the advantages of taking an economic stake in Nigeria, while bringing out the benefits of Nigeria Manufacturing opportunity Attempt a comparative analysis of Manufacturing opportunities and the offer from Nigeria Ensure ease of accessibility to Manufacturing opportunity, convenient and affordable structure and process
- 21. Thank You