Nigeria could lose its competitive edge in the African market unless urgent steps are taken to reduce the high cost of electricity, financing, and logistics that continue to weigh down local manufacturers.
The warning was issued by the Executive Secretary of the National Sugar Development Council (NSDC), Kamar Bakrin, during the technical session of the 17th National Council on Industry, Trade and Investment (NCITI) in Enugu.
Speaking on the opportunities and challenges presented by the African Continental Free Trade Area (AfCFTA), Bakrin said Nigeria must improve its industrial competitiveness or risk becoming a dumping ground for goods from other African countries.
“Either our goods are crossing borders going out, or everyone else’s goods are crossing ours coming in. We are either going to compete, or we are going to concede the market. There is no third option,” he said.
Bakrin highlighted the country’s high energy costs as one of the biggest obstacles facing manufacturers. According to him, industrial electricity costs about 8 US cents per kilowatt-hour in Vietnam, 10 cents in China, 15 cents from Nigeria’s national grid, and rises to 30 cents per kilowatt-hour when factories rely on diesel generators.
He revealed that Nigerian manufacturers spent an estimated ₦1.34 trillion on self-generated electricity last year.
“Every factory in Nigeria is running a second, unwanted business as a private power station,” he said.
The NSDC boss also expressed concern over the high cost of borrowing, noting that working capital loans attract interest rates of 27 to 35 percent in Nigeria, compared to 9 percent in Vietnam and 3 percent in China.
He added that manufacturing contributes only 8 percent to Nigeria’s Gross Domestic Product (GDP), while industry capacity utilization remains at 57.7 percent.
To boost industrial growth, Bakrin urged every state government to establish at least one industrial cluster with dedicated power supply within the next 12 months. He also called for a federal-state partnership to harmonize taxes and eliminate illegal checkpoints along industrial corridors.
Among other recommendations, he proposed the creation of an annual State Industrial Competitiveness Index to rank states based on electricity supply, access to land, taxes, and logistics performance. He further urged strict implementation of the Nigeria First procurement policy at both federal and state levels.
Bakrin stressed that Nigeria must reduce industrial electricity costs to 8–10 US cents per kilowatt-hour, ensure access to single-digit interest loans, and cut port clearance time to less than seven days, down from the current 18 to 21 days.
Citing the country’s fertilizer sector as a success story, he noted that Nigeria’s urea production capacity has increased from 500,000 tonnes in 2005 to 6.5 million tonnes today.
“When a country prices inputs as if it wants industry to live, industry lives,” Bakrin said.
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