Stakeholders in industrial sectors have said that the adoption and implementation of local content policies in key sectors of the Nigerian economy can address the high unemployment rate in the country.
Those who spoke to Daily Sun, recently regretted that for many years, until lately, Nigeria had regarded crude oil as a commodity, instead of a resource – a situation which resulted in the loss of all in-country value adding activities and opportunity to capture the full benefits of the derivatives of crude oil.
According to the Managing Director/CEO of Patchib Energy Resources Limited, Mr. Patrick Iwuagwu the enactment of Local Content Law in the oil and gas industry and its implementation has become a game changer, helping Nigeria to claw back work, services and spend which used to leave the country to other parts of the world.
He reiterated that the essence of local content policy is “domiciliation and domesticationof value in the country”.
Noting that the oil and gas sector is not a huge employer of labour, compared to agriculture, Iwuagwu commended the emphasis on agriculture and diversification by the current administration.
He also lauded the Federal Government’s reinforcement of the Local Content Policy through the issuance of Executive Order 5, designed to boost local content practice in other critical sectors of the economy.
He said Nigeria needs to extend local content practice to other critical sectors like agriculture, ICT, Construction, Power and Manufacturing in order to tackle the scourge of unemployment in the country.
Also speaking, the Executive Chairman of Alaba International , Market Association, Mr. Daniel Uchenna Nnadozie said industrialisation was the reason for the wealth gap between advanced industrial economies and developing economies, especially those in sub-Saharan Africa.
“Industrialisation is at the heart of any growth economy and is a proven process through which economic prosperity and inclusive growth are achieved,” Nnadozie said, adding: “It not only increases a nation’s aggregate wealth but also the per capita income of its citizens.”
Commenting on local raw materials sourcing for manufacturing sector, the managing Director of Adebola Sobanjo Limited, Mr. Adebola Olubanjo said, a report by Renaissance Capital in July 2014 revealed that the manufacturing sector had become Nigeria’s major economic driver, as it witnessed growth which surpassed those of the oil and gas, telecommunications, and the agricultural sectors.
“This growth was significantly evident by the second half of 2013, when a 52.7 percent increase in manufacturing capacity utilisation was recorded.
By the end of 2013, a subsequent increase of 58.58 percent was noticed in the area of locally sourced raw materials, further showing improvement in the manufacturing sector.
“This 11.87 percent drop is attributed primarily to probable poor quality of raw materials and insufficient supply of them within the country. On the other hand, the Manufacturing Association of Nigeria (MAN) attributes this decline to the lack of a functional petrochemical industry, citing that it constrains improvement in local sourcing of industrial input materials.
He said: “The current overall unemployment rate in Nigeria is 24 percent, with over 50 percent of Nigerian youth falling into that category. If local raw material sourcing continues at this level, the percentage of unemployment in Nigeria could go higher.
For a country where large deposits of minerals and raw materials like cocoa, rubber, iron ore, coal, and animal skins are found, local manufacturing industries should be impacted positively. The ability of any nation to engage in the transformation of raw materials to finished goods significantly develops their economy. If impacted, these industries can help the Nigerian economy to stop importing finished goods from countries like Italy, China, Spain, and India. These countries are found on the top of lists of countries with high amount of manufacturing outputs, even though they buy raw materials from here.
“Manufacturing industries are capable of providing the economy with a serious boost in employment, by providing opportunities in areas such as research and development, processing, engineering, entrepreneurship, and a lot more.
The National Bureau of Statistics reported 186,334 job losses in the second quarter of 2015, But employment in the areas that sourcing and processing raw materials locally can provide will greatly impact Nigeria’s current struggles with unemployment.
It is reported that Nigeria’s over-reliance on oil remains a major contributing factor to the growing rate of unemployment, particularly because other viable job-generating sectors, like manufacturing, agriculture, and entertainment have been neglected, he added.
As a way forward, Iwuagwu said government should invest hugely in infrastructure development like power supply, roads, adding that lack of investment in the country’s infrastructure is a clog in the wheel of economic progress.
He said it was evident that so many items were competing for government revenue in the budget, hence the need for private sector funding in infrastructure development.
“With the right infrastructure, Nigeria, being at the centre of the world could be made the hub of anything,” he added.