Labour-intensive light manufacturing will attract FDI’s, others, says Afreximbank boss

Nigeria’s human capital resources has been described as the tool for attracting foreign direct investments and bridging the unemployment gap, if industrial policies are aimed at appreciating it.

This is according to the President & Chairman of the Board of Directors, African Export-Import Bank (Afreximabank), Professor Benedict Oramah.

Prof. Oramah who spoke at 47th annual general meeting of the Manufacturers Association of Nigeria in Lagos, recently stressed that priorities should be given to labour-intensive light manufacturing, as Africa shifts from commodities to unlocking manufacturing with the signing of the African Continental Free trade agreement.

He explained that in the short to medium terms, light manufacturing posses the promise of industrialization and boosting intra-Africa trade.

“Nigeria should consider prioritising labour-intensive light manufacturing in its industrial policy. That will enable manufacturers and others to begin to appreciate that Nigeria’s most abundant resource is its labour. As it matures and establishes its manufacturing base, a transition to heavy industries can be made.

“At the initial stage of emphasising the light manufactures, Government can create special arrangements to support private sectors-led heavy industries in critical areas, e.g. petrochemicals, steel, cement, aluminium. Active support to ensure that survival of these industries may be needed just as China did.

Prof. Oramah also stated that another reason for such initiative is that in the short to medium terms, it presents the most promise as China, the world’s powerhouse of light manufacturing begins to exit the activity due to rising labour cost. It is estimated that over 80 million jobs will be exported by China when that process completes its full course.

“It is only by adopting this strategy that Nigeria can attract Foreign Direct Investments (FDIs) it requires to boost its manufacturing. The reason is that in its purest form, globalization is supposed to promote the free movement of labour, capital, goods and technology.

“As a result, I propose an export-oriented manufacturing strategy both at the country and firm levels. For this to succeed, the initial focus should be on the African market, leveraging the AfCFTA as well as Africans in the diaspora.”

He proposed that the manufacturers association should work with agencies of the Government to open markets for Nigerian manufactured goods across Africa.

“For instance, across some parts of Southern Africa, Nigerian traders dominate the retail of some products, such as auto spare parts and consumer electronics. Understanding the foot-prints of these traders and re-orienting them to source from Nigeria, instead of elsewhere can create the demand that can expand manufacturing capacities in Nigeria.”

Meanwhile, President of MAN, Engr Mansur Ahmed, stated that consultations are ongoing with the federal government in the area of industrial policies to target manufacturing growths in a sustainable way.

“We expect to work with the government to review industrial policies in a way that we have a comprehensive and robust industrial policy that will target growing the manufacturing sector in a sustainable way.

“The key constraint to manufacturing competitiveness like the infrastructure deficit especially in electricity, transportation must continue to be addressed. We are happy for the improvement, for an instant, the apapa port congestion is now significantly reduced and we miss acknowledge, but we need to see more.

“These initiatives need to be consolidated and scaled up so that the prospect of expanding manufacturing in a more competition the way can be realised,” he stressed.