The Urgency of Fixing Nigeria’s Manufacturing Sector As Index Falls

The Urgency of Fixing Nigeria’s Manufacturing Sector As Index Falls

We hail our digital companies but the fact remains that most would not create enough jobs without strong physical components. In the late 1970s,  General Motors used close to one million workers to serve about 300k customers. Today, Facebook uses just sub-40k workers to serve more than 4 billion customers. Apple uses about the same number, but Foxconn which Apple relies upon on the physical elements of its business has excess of one million in its payroll.

That brings me to the big news that Nigeria’s manufacturing sector is further contracting. Besides  the impact of Covid-19, the sector has been struggling for years. The border closure did not help the very small manufactures who focused on the niche markets in the western and central African regions. Covid-19 only exacerbated a trajectory that has been ongoing for years. Of course we do know the big elephant in the room: electricity  – the weakest link in Nigeria’s manufacturing sector.

The Manufacturing Purchasing Managers’ Index (PMI) in September stood at 46.9 index points, indicating a contraction in the Nigerian manufacturing sector for the fifth month.

This was disclosed by the Central Bank of Nigeria (CBN) in its September PMI report released on Wednesday.

According to the report, four out of the 14 sub-sectors surveyed reported expansion (above the 50 per cent threshold) in September.

It listed the expansion order as electrical equipment; transportation equipment; cement and nonmetallic mineral products.

So, the point is this: Nigeria needs jobs and most of those jobs are not going to come from our digital startups. Rather, the old industrial players would be expected to provide many assists as in the game of football. Aba shoe sub-sector needs to be fixed just as many clusters across the nation.

Aba could be great and has the sparks of genius to compete with Italy and Spain in the leather industry. I have offered some clear strategies to redesign the sector. Establish a vehicle that will galvanize the different shoe making entities into brands. Each brand will push for higher quality through better tools and training and advocate more collaboration among players. A requirement that a brand buys from the entities will be established. It will be similar to a merchant buying farm outputs from farmers even as the merchant has provided seeds to the farmers at planting season. Through strategic advertising and marketing, Aba will reach its promise.

Nigeria needs to work!

Fixing Aba Shoe And Leather Industry

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One thought on “The Urgency of Fixing Nigeria’s Manufacturing Sector As Index Falls

  1. Electricity is not what is holding Nigeria down, it’s a ruse to keep selling that idea, if you provide constant power today, Nigeria won’t magically rise, the blame will be shifted elsewhere.

    Again, manufacturing sector alone won’t be able to absorb the alarming unemployment in the land, so it has to be an integrated approach, because as technologies advance, you will always do more with less people; we have to bear that in mind.

    What do we need to create jobs in abundance? By first defining what we want as a people, then finding out what it could take to achieve them; then giving it our all to ensure that we get there.

    Whenever there’s any fifty or hundred billion naira available in Nigeria, what usually comes to mind? Sharing! Sharing! Sharing! No serious people think this way, but that’s the prevailing thought process in the land, and we think electricity will cure such mentality? We need to first begin to think alright, for now it’s a hopeless situation.

    What’s the cost of setting up 100MW of power plant near a manufacturing zone? The cost of fixing roads from plants to processing/aggregation centres? The cost of linking educational institutions to these sites? We think everything is costly, even when we lack sense.

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