The mining and agriculture blueprints of President Muhammadu Buhari hold keys to Nigeria achieving its industrial revolution, as the vitality of the two sectors will have positive multiplier effects on the manufacturing sector.
Buhari has set plans in motion to stimulate the mining sector to ensure the country becomes diversified amid oil price drop. Analysts observe that achieving a virile mining sector will ensure manufacturers have quality local raw materials for the iron, steel, automotive, cement, glass and ceramics sub-sectors in the required quantity.
This will reduce importation of inputs across these sectors, cut down pressure on the foreign reserves and strengthen local content which is necessary for industrial revival.
“Industrial revival depends on the ability to supply raw materials to industries,” Shehu Sani, president, Miners Association of Nigeria (MAN).
“A robust mining sector can provide 70 percent of inputs to industries. This is why we want mining mechanised, because most of the local miners cannot meet the capacity of our industries in terms of raw materials supply,” Sani said.
Most foods, beverage, tobacco, textile and leather industries depend on how robust the agriculture sector is, given that they get almost 100 percent of their raw materials from the sector.
While the textile sector relies on good cotton seedlings, the shoe and diary makers need a strong animal husbandry system to thrive.
A country without a virile wheat industry like Nigeria puts most of its flour millers in peril as most of them will depend on importation to sustain their factories. The food and beverage industry is the largest sector in Nigeria’s manufacturing.
“Here is where the issue of linkages come into play,” said Ike Ibeabuchi, managing director of a chemicals-maker, MD Services Limited.
“I believe President Buhari wants to imitate the immediate past administration that was pursuing the Agric Transformation Agenda and National Industrial Revolution Plan. Unless you get the agric sector working, you cannot get agro-allied industries working,” Ibeabuchi said.
Nigeria’s manufacturers import almost 55 percent of their output. The situation piles up pressure on Nigeria’s naira, whose value against international currencies has seen a freefall in the last 18 months.
Apart from the issue of quantity, few manufacturers say some of the locally available raw materials do not often meet the expected standards. Others say some of the country’s available inputs need beneficiation or further processing, which is capital intensive.
“I am a manufacturer and I used to import raw materials from the UK, but today all my raw materials are 100 percent produced here, and they are comparable to what we used to import,” said Abdul Alimi-Bello, president, Kaduna Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA).
“So the issue of poor quality is what I don’t believe,” Alimi-Bello said, to dispute the view in some quarters that local raw materials are not good enough.
Experts say Buhari must be ready to revive the Ajaokuta Steel Complex, and Aluminium Smelter Company, if he wants more manufacturers to source more raw materials locally.
According to the Manufacturers Association of Nigeria (MAN), the absence of a functional petrochemical industry remains a constraint to improvement in the local sourcing of industrial input materials.
“Government should work towards the speedy removal of all impediments to the full privatisation and operation of the steel complex,” said Frank Udemba Jacobs, president, MAN, recently, in a document made available to BusinessDay.
“Over 85 percent of manufacturing equipment are developed from iron and steel industry,” Jacobs added.