A country’s success in industrialization is measurable by evaluating the level of exports and the number of manufacturing, processing, and assembling companies. It’s also assessable by looking at the number of people shifting from rural to urban areas as well as their standard of living.
Well, Nigeria is one nation in Africa that clearly has an edge as far as industrialization is of concern. Thanks to its tons of natural resources and a stable government, policymakers are able to come up with favorable laws for the country’s industries, as well as provide funding.
Nevertheless, since independent, Nigeria’s economy is mainly driven by the export of commodities and raw materials. 70% of government revenue and 90% of Nigeria’s export earnings come from crude oil. The following are the key factors that contribute to the successful industrialization in Nigeria.
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Industrialization supply network
Some of the major industries in Nigeria apart from crude oil include cement, rubber, shipbuilding, food production, among others. For example, in the nation’s capital Lagos, which has approximately 22 million people, there are over 33061 industries. These firms significantly contribute to the low number of unemployment, which was 19% during the last quarter of 2018.
Also, the transport network is a crucial contributor to Nigeria’s successful industrialization. The country has over 195,000km stretch of roads with 33% of them paved. Although these numbers seem minimal, the country still utilizes waterways as an alternative means of transport. Still, this immensely makes the cost of transporting goods and labor relatively cheap and easy in some areas.
Again, Nigeria produces a high amount of electricity that it distributes cheaply to locals and also sells to countries such as Benin and Togo. The cheap power makes it economical for startup industries to sprout in different regions in the country.
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Skilled Labor
According to the latest United Nations data, Nigeria’s population stands at 203,763,947 people. This accounts for 2.64% of the world population. In other words, one in every 43 people in the world lives in Nigeria. This makes Nigeria have a plentiful labor supply.
In the same breath, the country has 129 universities, with the government owning 40 institutions out of the total number. The remaining schools belong to private investors, while others are co-owned by private entities and the federal government. Thanks to the collaborations, loads of learners can transition to tertiary education and eventually form part of the local labor force.
Similarly, the school fees in public universities in Nigeria ranges from $125 to $200 per year, according to the University of the People. This again makes education reasonably cheap, hence the country’s capability to produce loads of skilled graduates into the job market yearly.
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Domestic demands
As a result of the high population of people in Nigeria, everything produced locally has a ready market. And thanks to generous taxation policies, tons of local products are affordable. This is an enormous boost to Nigeria’s economy and industrialization.
Considerably, in most countries in Africa, imported goods are often cheaper than those available locally. Domestic demands also unlock job opportunities and increase the purchasing power for household goods and services. Still, Nigerian government has mechanisms to replace inferior and cheap imported goods from countries like China to improve demand for local products.
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Cost of production
For a country to boost its industrialization, the cost of production has to be lower. Nigeria diversifies energy supply to the private sectors hence increasing power efficiency and reliability.
Through the Nigeria Industry Policy and Competitiveness Advisory Council formed on May 30th, 2017, Nigeria aims at improving its manufacturing GDP by over 250% in 5 years. The council’s mandate is to track the progress of different industrials sectors in the country. This has been a huge boost to the transformations of firms as the committee provides advice and support to needy companies.
In summation, Nigeria has a new transformation agenda in its current industrial policy, dubbed the economic transformation agenda of Nigeria Vision 20:2020. This industrialization strategy aims at achieving greater global competitiveness in manufactured and processed goods. Its core mandate is linking the foreign and domestic trade. Similarly, it seeks to integrate regional business, reduce trade barriers, and boost the country’s productivity.
