The Lagos Chamber of Commerce and Industry (LCCI) says Nigeria needs to improve the competitiveness of her industrial sector to benefit from international trade pacts.
Mr Muda Yusuf, Director-General of LCCI, said this in an interview with our reporter on Monday in Lagos.
Yusuf said there was urgent need to lift the manufacturing sector’s competitiveness with low cost fund and improved infrastructure.
“The Nigerian industrial sector is highly vulnerable because of its weak competitiveness.
Manufacturers are burdened by profound infrastructure challenges and high cost of fund which put tremendous pressure on their production and operating cost.
“These two major factors are the vulnerability of the sector in a continental or global setting,” he said.
Yusuf noted that the Africa Continental Free Trade Area (AfCFTA) was part of the dream of the African Union (AU) to promote and drive integration, investment and trade on the continent.
“Currently, trade within the continent account’s for 11 per cent of total trade. It is expected that AfCFTA will make the continent more integrated, united and prosperous.
“However, a liberal trade regime within the continent poses a major risk to the Nigerian manufacturing sector because the sector is highly vulnerable due to its weak competitiveness,” he said.
According to him, the nation’s industrialisation strategy, which has been in place for years, is rooted in import substitution.
“This is a model of industrialisation that is inward looking and focusing on domestic market for its sustenance. This strategy does not position the sector for competition in the regional, continental or global market place.
“The sector does not have an outward looking or export-oriented disposition. Therefore, exposing the industrial sector to international competition may be the undoing of the sector.
“This poses a major dilemma for our trade policy.
“While economic integration is desirable because of the attraction of larger market, we need to worry about the implications for our weak industrial sector.
“The summary is that trade can only be beneficial if we are in a good competitive position to be part of such trade,” Yusuf said.
He urged the Federal Government to review the industrialisation strategy from the disproportionate dependence or protectionism to a policy choice that focuses on building the capacity of the manufacturing sector for competitiveness.
“This is what can create an enduring industrial sector and is also in tandem with the Nigeria Industrial Revolution Plan [NIRP] which underlines the significance of resource-based industrialisation strategy,” he said.
The LCCI boss noted that the model stresses local value addition, robust linkages and competitiveness to deepen industrialisation growth in the country.