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President African Development Bank (AfDB) Dr. Akinwumi Adesina has called for an industrial revolution and manufacturing digitalisation.
The AfDB boss also raised concerns over the epileptic power supply in Nigeria, which he said, had caused the nation’s manufacturing sector to lose N10.1 trillion annually.
Adesina, while delivering a keynote lecture with the title, “The Day the Lion Roared! Making Nigeria a Global Industrial and Economic Giant” at the Business Day CEO Forum Thursday in Lagos, said the source of Nigeria’s greatest wealth would come from having strong manufacturing capacity for competitiveness in regional trade and integration into global value chains.
He said, “with the right policies, investment frameworks, infrastructure, logistics and financing framework, and powered by a highly trained, dynamic, and youthful workforce, Nigeria must fully unleash the power of manufacturing.”
Loss in power sector
On the power sector, Adesina said unless Nigeria decisively tackles its energy deficiency and reliability, its industries would remain uncompetitive. Miffed by the level of Nigeria’s underdevelopment, the former Nigeria’s agriculture minister said: “For now, Nigeria is developing too slowly and well below its potential. The challenge is for the lion to roar. Then we will have the making of an economic giant.”
He said Nigeria should have a greater ambition for its manufacturing sector, by shifting to integrating into global and regional value chains, rapidly moving up the value chains in areas of comparative advantage, driving greater specialization and competitiveness.
“A well-developed and policy-enabled manufacturing sector, with export orientation will spur greater innovation, industrial policy for export market development and structural transformation of the economy. Instead of being consumed with conserving foreign exchange, the focus would shift to expanding foreign exchange through greater export value diversification.
“Industrial manufacturing can earn Nigeria ten times what it earns from reliance on oil. Let’s change our perspective away from simply import substitution, to high-valued export-oriented manufacturing,” said the former minister.
Adesina further said: “The major challenge facing the industry in Nigeria is the very high cost and unreliability of supply of electricity. Load shedding and unreliable power have made the cost of manufacturing extremely high and uncompetitive. Most of the manufacturing companies do self-provision on energy, with dependence on generators, with diesel and heavy fuel oil, with emissions, making them brown industries, not green industries.
“It has been estimated by the IMF that Nigeria loses $29 billion annually due to lack of and unreliable power supply or 5.8% of its GDP. Also, that Nigerians spend $14 billion per year on generators and fuel.
“Lack of electricity is killing Nigerian industries. According to the Manufacturers Association of Nigeria, industries spent N93.1 billion on alternative energy in 2018. No business can survive in Nigeria without generators. A recent survey of manufacturers in Nigeria shows they lose N10.1 trillion annually due to power failure. To put this in revenue perspective, the annual total revenue of the government of Nigeria last year was N10 trillion. So, the industrial sector loses the same revenue as the nation collects in one year. What an irony!
“Unless Nigeria decisively tackles its energy deficiency and reliability, its industries will remain uncompetitive. There should be massive investments in gas to power to assure stable baseload power for industries, hydropower resources, large scale solar systems, direct power preferentially to industries, and support industrial mini grids to concentrate power in industrial zones. In addition, we should develop more efficient utilities, reducing technical and non-technical losses in power generation, transmission, and distribution systems.”
“The African Development Bank invests massively in the power sector in Nigeria to support the implementation of the Power Sector Recovery Program. The Bank provided $200 million for the Nigeria Electrification Project, designed to fill the electricity access gap in Nigeria. We have also invested $257 million in the Nigeria Transmission project, to strengthen grid power evacuation and regional interconnection.
“The Bank has launched the Desert to Power initiative, a $20 billion project to provide electricity for 250 million people across 11 countries of the Sahel, including Northern Nigeria. Desert to Power will create the world’s largest solar zone. This initiative will draw lessons from successful projects already financed by the Bank, including the Noor Ouarzazate solar PV power project in Morocco and the Ben Ban solar project in Egypt,” AfDB boss further added.
Digitalisation
On digitalisation of the manufacturing sector in Nigeria, Adesina said the future of manufacturing would be digital. He said: “The global digital economy is estimated to be worth over $16 trillion. The use of Internet of Things (IoT) will raise productivity of labor in manufacturing; deploy smart machines, manufacturing platforms and systems, connecting machines and people, and using machine learning and artificial intelligence to improve speed and efficiency of complex manufacturing processes.
The former minister also said Nigeria must look beyond the industries of today into the industries of the future and develop a plan and capacity to compete in the smart industries that will become the main drivers of global economies.
“The fourth industrial revolution, based on automation, robotics, artificial intelligence, machine learning, big data computing, 3-D printing and additive manufacturing are rapidly transforming industrial manufacturing. Nigeria must therefore enhance its readiness to transition to digitized and smart manufacturing. The rising use of robots for manufacturing will pose a challenge for Nigeria’s drive to attract and be competitive in labor-intensive light manufacturing,” he said.
He therefore called for rapid investment in digital skills for manufacturing, re-tooling of workers, vocational training, digitisation of industrial processes, and investments in digital infrastructure and enabling environment.
“It is time to prepare students in Sciences, Technology, Engineering and Mathematics. It is time for the Manufacturers Association of Nigeria to establish “Industrial Digital Skills Academies” and link them to universities and technology innovation hubs. It is time for Federal and State governments to make massive investments in digital infrastructure to support learning and skills development for global labor market demand.”
He said AfDB, Agence Francaise de Development and the Islamic Development Bank launched the $618 million I-DICE program to develop digital and creative enterprises, saying this will create 6 million jobs and add $6.3 billion to Nigeria’s economy. Adesina further revealed that AfDB had so far provided about USD1.6 billion in low interest rate lines of credit to 15 financial institutions in Nigeria in the last decade.
(blueprint.ng)
