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Experts: Low industrialisation may undermine 20:2020 vision

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THE attainment of vision 20:2020 may be a mirage if the Federal Government fails to tackle the challenges militating against the growth of the country’s manufacturing sector, former Senior Special Assistant to the President on Financial Sector Development, Dr. Abiodun Adedipe, has said.

Also, to the Vice President of Lagos Chamber of Commerce and Industry (LCCI), Alhaji Remi Bello, the lingering crises besetting the nation’s industrial sector, despite propositions over the years by the operators, need to be urgently addressed. Speaking on “The Industrial Focus Towards Vision 20:2020” at the yearly general meeting of the Industrial Group of LCCI, yesterday in Lagos, Adedipe expressed concern about the nation’s tax system, which he said, has not been favourable to manufacturing.

¨My major concern in this set of drivers of manufacturing competitiveness is the tax system. It appears to me that the emphasis in the tax system and structure is to maximise government revenue, rather than motivate the type of economic activities that line up with the 20:2020”, he said.

He argued that if Nigeria is to be competitive and achieve the 20:2020 dream, there should be deliberate system of discovery and nurturing of talents to world-class standards. “The nation must seek to redefine the standards as world beaters, not merely dubbing what exists in other climes”.

He also stressed on the need for the Federal Government to pay attention to the development of transportation system, and other infrastructure to strengthen domestic manufacturing. Adedipe pointed out that since there are existing clusters of industrial and economic activities, government should target those estates to provide strategic linkages between the sources of manufacturing inputs and the markets for their outputs.

He noted that “while the world is now focusing on clean, sustainable and renewable energy, Nigeria is yet struggling with meeting the existing energy demand, which is set to expand further as the economy grows and income levels rise. According to him, the measure of electricity consumption in Nigeria was a reflection the poor policies and weak institutions we have had until recently.

¨Nigeria has resource advantage, especially for industrial processing of raw materials. There are however, weak linkages that connect primary processing to the more sophisticated production activities. ¨Most manufacturers in Nigeria therefore, end up importing most of their inputs, thereby exposed to the risks to logistics and exchange rate movements, and many other associated risks.

¨China is a good lesson in this regard. At the earlier stages of its manufacturing and international trade expansion, ports began to clutter and congestion became a nightmare. It then embarked on an aggressive port expansion and creation of new ones that brought the country into number one ranking globally in container cargo handling and capacity – all in context of about 172 ports at present,” he added.

Bello described the Nigerian industrial sector as being in an undesired state, bedeviled by high operating overheads, poor infrastructure, tight credit conditions and absence of a well articulated industrial blueprint. The sector, he noted, holds the answer to any meaningful inclusive growth and job creation the Nigerian economy can experience at this time.

“Taking notes from the 2013 budget proposal of the Federal Government and particularly looking at the allocations to infrastructure development and some critical sectors of the economy, it is evident the allocations are grossly inadequate.

“At this time when Nigeria suffers from infrastructural deficiencies, more needs to be done urgently in critical areas like power, roads and agriculture to jump start the industrial sector to optimal performance.  The capital expenditure component of the 2013 budget proposal does not reflect this urgency,” he said.

Source: The Guardian

http://www.ngrguardiannews.com/index.php?option=com_content&view=article&id=102584:low-industrialisation-may-undermine-202020-vision-say-experts&catid=31:business&Itemid=562