The political manifestos are emerging – and we can understand one thing: Obi, Atiku and Tinubu want to decouple Nigeria’s future from hydrocarbons. Obi was crystal clear: “diversion from oil dependency”. As I study the emerging documents, one can see a sense of optimism provided the promises could be executed. That has been the challenge in Nigeria – campaign promises are never followed up after elections.
Hoping that the redesign will be different in 2023, I posit that light manufacturing will be a growth policy area. None of the candidates has made mindless promise of “fiatly” strengthening the Naira. But reading some documents, you can see that the playbook is to improve balance of payment and trade. And if they succeed, Naira will have a better outlook.
Light industry are industries that usually are less capital-intensive than heavy industry and are more consumer-oriented than business-oriented, as they typically produce smaller consumer goods. Most light industry products are produced for end users rather than as intermediates for use by other industries. Light industry facilities typically have less environmental impact than those associated with heavy industry. For that reason zoning laws are more likely to permit light industry near residential areas.
The strength of Naira does not come from the central bank’s headquarters or bank branches. Nigerian warehouses and factories (the industrial age and knowledge age types) will provide whatever Naira needs to compete as a currency globally. There is no better way than to make more things in Nigeria.
Atiku has made many statements on revitalization of industries. Obi has used the word “production” a lot. Through Tinubu’s proxies, we can extrapolate the same; he has not been speaking a lot. So, the clear conclusion is this: making things in Nigeria will deliver alpha. I understand the challenge of electricity. Yes, it is a concern but every day, I have seen how gasification is evolving in Nigeria. Indeed, more plants will be powered by gas than diesel over the next few years. That will provide marginal cost positioning until the nation finds a solid solution to energy.
If you want to win, think what you can make using local raw materials in the nation. You will make great friends with policy makers as 2023 loads. Light agro-processing will give you a solid positioning of using one stone to kill two birds (food security and diversion from oil).
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