Dreams of greatness

It is no secret that given its resources, its population and the capacity of some of its business leaders, Nigeria is punching well below its weight. There are indications that Nigeria’s rebased gross domestic product (GDP) could rise to $432bn compared with South Africa’s $370bn, when figures are released sometime this year. This would effectively make Nigeria Africa’s largest economy but there is no comparison between the industrial sophistication of South Africa and the badly creaking sector in Nigeria.

If the oft-repeated claims by Nigerian leaders that they want to see Nigeria among the ranks of the top economies of the world are to be taken seriously, then the country will have to wean itself off the easy oil-revenue stream and work doubly hard to rescue and reinvigorate current industries that still show signs of life and create an environment that rewards and encourages manufacturing and related industries.

President Goodluck’s NIRP focuses on areas where Nigeria has competitive and comparative advantage such as agriculture and agro-products, metals and solid minerals, oil and gas, construction and light manufacturing services. This is the standard transition formula for resource based countries but theoretical ‘competitive and comparative’ advantage has little relation to the real thing.

All countries try to leverage on their competitive advantages – it is common sense if nothing else to do so, but turning a theoretical advantage (or even a disadvantage) into a competitive force is what separates the men from the boys in this game.

The NIRP seeks to increase the share of manufacturing to the GDP from the current 4%, to more than 10% over a five-year period. It is hoped that this will boost the annual revenue earned by local manufacturers by up to N5trn (about $3.08bn) per annum. Jonathan said the NIRP will help to fast-track economic growth by reducing the current haemorrhaging of the nation’s reserves caused by unbridled importation. Virtually everything is imported into the country – from toothpicks to fruit juice. This has stunted the growth of local industries that are unable to compete with rival imported brands. He explained why the plan had focused the sectors selected: “These subsectors were prioritised because they will also generate jobs and tap into existing markets and demand in Nigeria. In each of these sectors, we could become number one in Africa and in the top 10 globally, because of our competitive advantage.”