Sustainable local supply of basic and secondary raw materials and innovations is fundamental to manufacturing sector’s survival. These and other innovative strategies, cutting-edge technologies, and sustainable practices that can contribute to the growth of the manufacturing ecosystem were subjects of discussion at the Nigerian Manufacturing and Equipment Expo (NME) co-located with the Nigerian Raw Materials Expo (NIRAM) in Lagos. Assistant Editor CHIKODI OKEREOCHA reports.
The acute shortage of raw materials and intermediate input foisted on local manufacturers by the disruption in the global supply chain caused by the Covid-19 pandemic has since forced a rethink in favour of reconfiguring the manufacturing sector’s supply chain.
Essentially, the supply chain reconfiguration- through backward integration for inputs that can be sourced locally, will enhance local sourcing of raw materials and products development in the Nigerian manufacturing sector.
But even before the global supply chain glitch, which was unprecedented, and induced by COVID-19, which was first reported in Nigeria in February 2020, local raw materials utilisation in Nigeria’s manufacturing sector was on the downward trend.
According to manufacturers, the downward trend was traceable to the first half of 2017 when the Central Bank of Nigeria (CBN) started its policy intervention in the official Foreign Exchange (forex) market.
Manufacturers said the relatively more available forex resulting from the apex bank’s intervention rubbed off negatively on the backward integration agenda, as manufacturing firms preferred to import raw materials as against looking inward.
Also, poor access to credit and inadequate economic infrastructure for inward development of local input was, and still is, an issue.
Fast-forward to 2022 and 2023, local raw materials utilisation continued its downward spiral. For instance, it dipped to 52 per cent in the first half of 2022, down from 53 per cent of corresponding half in 2021.
This indicated one percentage point decline over the period, according to the ‘Executive Summary of H1 2022 Economic Review’ by the Manufacturers Association of Nigeria (MAN). It, however, increased by two percentage points when compared with 50 per cent recorded in the second half of 2021.
MAN, in the review stated the manufacturing sector was generally faced with limited investment in domestic production of raw materials for utilisation in most of the sub-sectors, which was as a result of limited funding and policy incentives in the country.
However, manufacturers got a slight breather when local raw materials sourcing increased to 55.3 per cent in the first half of 2023 from 48.0 per cent recorded in the corresponding half of 2022.
This indicated 7.3 percentage points increase over the period. It also increased by 1.8 percentage points when compared with 53.5 per cent recorded in the second half of 2022, with manufacturers attributing the observed increase in local raw materials utilisation within the sector to the growing challenges associated with sourcing forex.
“This situation has compelled manufacturers to shift their focus towards obtaining raw materials domestically, despite the substantial cost implications involved,” MAN Director General Segun Ajaiyi-Kadir said.
For Ajaiyi-Kadir and indeed, other manufacturers who, even before the global supply chain crisis, were agonising over the unavailability of raw materials and delay in receiving imported raw materials, including the high cost of raw materials, the shift in focus towards obtaining raw materials domestically is therefore, desirable.
The desirability of such change in focus found expression in the seventh edition of the Nigeria Manufacturing Equipment Expo (NME Expo) co-located with the ninth Nigeria Raw Materials Exposition (NIRAM Expo), which held in Lagos, Nigeria, from November 21 to 23, 2023.
Tagged: ‘West Africa’s largest manufacturing, equipment and raw materials event,’ the co-located NME/NIRAM Expo 2023 had the theme: “Future Manufacturing: Building a Sustainable Roadmap to the Industrialisation of Nigeria.”
Organised by MAN, in collaboration with Raw Materials Research and Development Council (RMRDC), NME was a response to government’s commitment to industrialisation and economic diversification.
It was, for manufacturers, an opportunity to explore new production processes that will increase their production output, including embracing innovative technologies to boost their competitiveness.
NIRAM, on the other hand, was designed to create a platform for manufacturers to seamlessly source raw materials and also benefit from research and development breakthroughs.
For the RMRDC, it was the answer to its yearning for a paradigm shift from Nigeria’s over dependence on imported raw materials and products to local raw materials utilisation and backward integration in areas where the country has comparative and competitive advantages.
If the robustness and reach of the recommendations put forward by various stakeholders in both the public and private sectors are anything to go by, the co-located event may have set the stage for what promises to change the narrative in local sourcing of raw materials and products development in the Nigerian manufacturing sector thereby enhancing the sector’s productivity and global competitiveness.
For instance, the Minister of Industry, Trade and Investment, Dr. Doris Uzoka Anite, was emphatic that Nigeria must prioritise the development of the local raw materials sector in order to support her manufacturing industry.
The minister, in her keynote address at the opening ceremony of the expo on Tuesday, stated that by focusing on value addition and local sourcing, Nigeria can reduce her reliance on imported raw materials and improve the overall competitiveness of her products.
“This-value addition and local sourcing, will also contribute to the growth of Small and Medium-sized Enterprises (SMEs) and empower local entrepreneurs to participate actively in the manufacturing value chain,” Anite said.
The minister, who was represented by Mrs. Olumuyiwa Ajaiyi-Ade, said in line with the objectives of the President Bola Tinubu’s Renewed Hope Agenda, it was essential that “We intentionally shift our focus towards non-oil manufacturing sectors…
“Through fostering innovation, championing local content, and strategically investing in critical infrastructure, we have the potential to catalyse the development of a robust and globally competitive manufacturing sector, thereby significantly contributing to our economy.”
New technologies hold the ace
Dr. Uzoka Anite did not mince words when she said the future of manufacturing in Nigeria relies on the ability to embrace technological advancements and innovation. She said by adopting cutting-edge technologies, Nigeria can boost the competitiveness of local manufacturers and also position herself as a global manufacturing hub.
She said the expo’s theme aligned with the nation’s quest for revitalisation of the manufacturing sector, but that manufacturers must leverage emerging trends such as Artificial Intelligence (AI), automation, robotics, and the Internet of Things (IoT) to enhance their manufacturing processes, improve efficiency, and drive productivity.
The minister’s words: “The theme emphasises the need for a renewed focus as well as deliberate attention to the development of the non-oil sector through manufacturing processes. As we are all aware, Nigeria has long been dependent on oil as our primary source of revenue, putting marginal attention to sustained manufacturing activities.
“However, the volatility of the global oil market and the need for diversification have necessitated a shift towards developing our manufacturing industry and tapping into its immense potential. We are convinced that manufacturing has always been a critical driver of any economic development and is crucial for sustainable growth and job creation.
“It has the potential to transform our nation’s economy, diversify our revenue sources, and reduce our dependence on oil. The current global economic landscape provides us with unique opportunities to showcase Nigeria’s manufacturing potential and attract local and foreign investments to drive this crucial sector forward.”
Dr. Uzoka Anite reaffirmed the Federal Government’s commitment, through her ministry, to fostering a conducive environment for manufacturers to flourish.
“Our commitment extends to the implementation of policies and programs that facilitate ease of doing business, improve access to finance for manufacturers, and enhance infrastructure and logistics to bolster the manufacturing sector’s growth,” she said.
She stated that as part of this commitment, the ministry will strengthen collaboration with MAN to implement sector-specific guidelines. This, according to her, underscores the pivotal role of the manufacturing sector in government’s overarching strategy for sustainable growth.
“We acknowledge that manufacturing is a cornerstone for job creation, value addition, and a robust workforce. Our policy initiatives centered on creating an enabling environment, incentivising production activities, and promoting the use of made-in-Nigeria products to boost the competitiveness of our manufacturers, the minister stated.
She pointed out that since her assumption of office, with the approval of the president, a Presidential Council for Industrial Revitalisation has been established, with the Minister of Finance serving as the Chair and herself as the Vice Chair.
The industry minister added that various workgroups and task forces have been formed to effectively implement the council’s mandate.
Some of them include subcommittees on consumer credit, commodity exchange, heavy industries, and steel development, as well as trade facilitation and ease of doing business.
Other subcommittees are licensing and certification of artisans, trade facilitation and realisation, mining and solid minerals, oil and gas, and creative industries.
MAN President Otunba Francis Meshioye could not agree less that the future of manufacturing in Nigeria is hinged on embracing technology and innovation.
He noted that the unprecedented rate in which the world is changing in terms of innovative technologies, shifting customer expectations, as well as increasing social awareness of gender equity and restoration of previously marginalised communities has considerable impact on the future of the manufacturing sector hence the choice of the theme for the expo.
Given these major shifts, Meshioye said: “If manufacturers can efficiently balance a combination of efficient economies of production and supply chains; strong and reputable products; loyal customers; an established logistics network; as well as reliable on-line business elements, they will be well-positioned in the future to compete favourably in the industrial marketplace.”
The MAN president expressed optimism that by successfully assimilating advanced technologies into their systems, existing and prospective industrialists can expect to realise even greater revenue and profits from their investments.
Meshioye said despite concerns that the continent lacks the requirements for global advancements to capitalise on innovative technological initiatives, African countries are uninhibited by infrastructure legacy challenges, thereby providing a higher degree of flexibility than their developed counterparts.
“Accordingly, Industry 4.0 remains a considerable opportunity for African manufacturers, ultimately giving the continent a cutting edge over the global economy. Beyond manufacturing, all industrial and commercial businesses in the country also suffer from energy inadequacy and inefficiency,” he said.
Industry 4.0—also called the Fourth Industrial Revolution or 4IR—is the next phase in the digitisation of the manufacturing sector, driven by disruptive trends including the rise of data and connectivity, analytics, human-machine interaction, and improvements in robotics.
Generally-speaking, Industry 4.0 describes the growing trend towards automation and data exchange in technology and processes within the manufacturing industry.
RMRDC: we’ve risen to the task
Aware that local raw materials utilisation and products development are key to Nigeria’s industrialisation and global competitiveness, the RMRDC said it is leaving nothing to chance in expediting Nigeria’s industrialisation through optimal utilisation of its natural endowments (agro and mineral raw materials) as inputs for manufacturing.
The Council’s Director-General/CEO, Prof. Hussaini Doko Ibrahim, described its collaboration with MAN as ‘strategic,’ noting that their roles complement each other, and this, according to him, underscored the Council’s partnership with MAN in co-hosting these yearly expositions.
He said the essence was to maximise the benefits to their common stakeholders, who continually aim to reduce the cost of manufacturing amid the rising cost of raw materials and process equipment.
The DG, who spoke through RMRDC’s Director Business Innovation Centre, Mr. John Obekpa, specifically said the Council has assiduously worked over the years with stakeholders to increase manufacturers’ access to both basic and secondary raw materials.
“The primary production of several strategic agricultural raw materials like cotton, sorghum, tomatoes, cocoa, sheet trees, oil palms, soya beans, cane sugar, cashew, fruits and sesame have been boosted by providing specific farmers with improved seeds or seedlings as the case might be,” he said.
Prof. Ibrahim also said the establishment of over 40 pilot plants at the recently-inaugurated Raw Materials and Development Council’s Technology and Innovation Complex, Obasanjo Space Centre, Airport Road, Abuja, was a testimony to the Council’s unwavering commitment to ensuring competitiveness in raw materials and products development.
According to him, the pilot plants at the complex signpost the Nigerian “I Can Do spirit’’ as it has emerged as a unique manufacturers’ hub.
“It beckons venture capitalists to replicate the plants across the country for increased manufacturing activities even as their feasibility/viability and the capability of Nigerian Engineers to design and fabricate manufacturing equipment have been astutely demonstrated by the quality of indigenous engineering prowess brought to bear in putting the Technology and Innovation Complex together,” he said.
The RMRDC boss further said the Centre has developed technologies that can produce caustic soda, soap noodles, calcium carbonate, lovastatin, herbal medicine, calcined kaolin, chemicals, talc, hydrated lime, essential oil, API from Mushrooms, Artemesia and triple concentrate tomato paste, which are secondary raw materials which are hitherto with limited local inputs and heavily imported.
The Nation learnt that the technical feasibility/viability of all these have been ascertained and need scaling up for investment. And these innovations and their products were on display at the expo alongside other local raw materials and products, where a detailed exposé of the nation’s raw materials and their potential to grow the manufacturing sector was made.
