Intellectually speaking,What I really feel the Dilemma is
Manufacturing could be seen as the transformation of concepts to new products.It is a major drive and competent source of convergence with stronger economies
Nigeria was said to have reached its peak at 7.83% contribution to the GDP in 1982 . So many manufacturing establishments have gone out of business due to various challenged that posed as threats and later became a reality
According to the Rostow’s stages of growth, Nigeria ought to be at the 3rd stage –Take –off stage
Take -off -Manufacturing industry assumes greater importance,Political and social institutions start to develop,Savings and investment grow, probably to 15% of GDP. and Agriculture assumes lesser importance in relative terms.
Prior to the oil boom of the 1970’s, manufacturing contributed approximately 10% to Nigeria’s economic output. Thereafter, increased revenues from oil caused the sector’s relative Gross Domestic Product (GDP) share to decline it Recently the manufacturing contribution to GDP shrunk by N80bn!
We are deeply under performing and this could be due several physical, psychological and cultural reasons.
CHALLENGES IN THE MANUFACTURING SECTOR
1. Insufficient power supply: This mostly due to lack of infrastructure
2. Low quality products
3. Silenced barriers to entry: There is a silenced barrier to entry in most sectors which could be deemed as politically corrupt and the use of ones’ social status to secure a patent or ensure the downfall of other small firms is rampant .eg the generator suppliers (cabals) has undoubtedly malnourished the ability of the power industry to grow and better infrastructures.
4. The ease of doing business index: Sadly ,Nigeria is ranked at 169
5. Lack of technical expertise-We usually import knowledge and technical expertise form advanced countries
6. Political instability
7. Deficient Human capital.
8. Insufficient Public-Private partnerships in industries that do not yield immediate but long –term impressive profit
9. Crowding out investments by the Government
10. Cultural and psychological barriers: This is majorly due to the fear for westernization of culture/cultural lag
11. Lack of prudent policies and stringent regulation
· Aspiring manufacturers should take a cue from the Asian tigers and carve out a niche for itself in a wearing market. However those that do not possess sufficient capital for mechanized operation should take advantage of the cheap labor resident in their environment
· They also ensure that their products are more “people oriented” (satisfy the need of the people per time& unit cost)” rather than “Market oriented”. Most times people tend to follow the demand and supply rule of the market .Although this would enable the firm to make profit due to the low cost of goods but by the time prices rise(Considering the flexible exchange rate and import dependent status of our economy)Their product will not be able to stand the quality and preference test of individuals because they would now be shortening their rations and quality (eg-beloxxi biscuit) and they would not be able to sustain their brand which could lead to a short down depending on their variable cost
· Technology is non –rival-( goods that can be consumed simultaneously by an unlimited number of consumers. unlike conventional factors of production, which are rival). They are innovations that precede sporadic growth. SME’s should consider investing in efficient and revel ant technology in their field to ensure better processes and maximized output.
· Aspirants should take geographically viable Decisions when situating their plants.
The present Dangote Refinery and Petrochemical Project set to operate by 2019 whose major objective is to improve the power supply in Nigeria and to have uninterrupted power supply in Lagos.
It is estimated to create over $500 million revenue over 3 years. –What an economic leap!
It has been carefully and strategically situated in Lagos, not that there would be proximity to raw material…but due to the fact that Lagos State is the hub of commercialization ,the emergence of Eko Atlantic city and other investments in the state,there would need for a more steady supply of raw materials and electricity .It could and should have been situated it in his state or where he has social and political jurisdiction.
By 2030, more than 34 million households, with about 160 million people, are likely to be earning more than $7,500 annually, making them aspiring consumers.
Entrepreneurs in this sector should be innovative and enterprising to be able to produce and make optimize output.
Well I on the other hand, can’t wait to be an entrepreneur in this sector and thrive beyond the challenges that may want to define my growth
Perfection is not attainable .But if we chase it ,We can catch excellence.-Vince Lambardi