Sunday, September 25, 2011

Silent Factories, Empty Warehouses, by Nasir El-Rufai
23 September 2011

Written by Nasir Ahmad El-Rufai    

Back in 1959, the manufacturing sector contributed about 4.4 percent of Nigeria’s GDP. It was also the second largest employer of labour after agriculture. As we search for answers to the question - where are the jobs? - we look today at the manufacturing sector's evolution and challenges, as well as the opportunities it presents for job creation and economic development. 

In the decades since independence, the Nigerian manufacturing sector has witnessed ups and downs as its contribution to GDP rose and fell. In 1970, it had risen to 9.4 percent of GDP. During the oil boom in 1973, it fell to 7 percent, but rose to 13 percent in 1980 at the height of the second oil boom. However, according to the National Bureau of Statistics, manufacturing only contributed 4.1 percent of Nigeria’s GDP in 2010. In other words, after tens of billions of dollars in public and private investments since independence, the manufacturing sector actually contributes less to Nigeria’s economy than it did before independence 50 years ago.

In terms of jobs, as recently as 2002, Nigerian manufacturers employed more than 2.8 million people directly, nearly as many as those employed by  all the local governments, 36 states and the federal government combined, without significant direct allocations from the national budget. This number collapsed to about 1.5 million by 2009, at the height of the Yar'Adua era of policy reversals and uncertainties. In that year alone, according to Manufacturers' Association of Nigeria (MAN), 834 factories had closed shop shedding off nearly 80,000 jobs and the trend has sadly continued...

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