The Nigerian Economic Summit Group (NESG), has said investments into Nigeria’s manufacturing sector for close to a decade has been sub-optimal.
According to NESG, despite the numerous opportunities in the manufacturing sector, only ₦5.73 trillion ($15.87 billion) worth of investments have been made into the sector for the last 8 years, indicative of investors’ low confidence level in the sector.
In its May 2021 Brief titled, Sectoral reforms and Investments in Nigeria; A Focus on the Manufacturing Sector, NESG asserts that investors’ low confidence level in the sector is evidenced by the huge gap between announced investments and actual investments made in the manufacturing sector.
According to NESG, between 2019 and 2020, investments announced for the various real sectors stood at $46.4 billion, with the manufacturing sector accounting for 25% ($11.56 billion).
Of the announced investments, actual investment inflows into the economy was $1.96 billion – just 4% of announced investment – which was shared between the telecom, agriculture and manufacturing sectors.
NESG in the report, blamed less investments in the country’s manufacturing sector on regulatory inconsistency, frequent reversals of government policies among others.
“One major reason why the manufacturing sector has not attracted significant investments when compared with those of other countries is policy and regulatory inconsistency. Frequent reversals of government policies on importation, lack of implementation of the provisions in national policy documents and regulatory lapses are key factors that have affected the manufacturing sector in Nigeria,” said NESG.
The group opines that Nigeria has numerous favourable conditions for investment, especially in its manufacturing sector citing the following reasons;
- Large arable land
- Strategic location in Africa
- Large market and opportunities presented by the AfCFTA
- Import dependent–manufactured and agricultural goods account for 72.5% of total import in 2020
- Weak manufactured goods exports – share of manufactured goods to total exports was 7.7% in 2020
- Large population – Nigeria has a population of over 200 million people.
