The Executive Secretary of the National Sugar Development Council (NSDC), Mr Kamar Bakrin, has unveiled a four-point plan aimed at reducing Nigeria’s high cost of production, warning that the country must lower the cost of manufacturing and boost infrastructure development or risk losing both domestic and African markets to more competitive economies.
Speaking at the technical session of the 17th National Council on Industry, Trade and Investment (NCITI) in Enugu, Bakrin said Nigeria’s factories currently pay between two and ten times more than competitors in countries such as Vietnam and China for electricity, credit and logistics, making locally manufactured goods less competitive.
He described the situation as a ‘cost-of-production problem’ rather than a demand problem, stressing that the solution lies in deliberate policy actions that lower production costs.
According to him, while manufacturers in Vietnam pay about eight US cents per kilowatt-hour for industrial electricity and those in China pay around 10 cents, Nigerian manufacturers pay about 15 cents when connected to the national grid, with costs rising to nearly 30 cents whenever they rely on diesel-powered generators.
He noted that manufacturers spent an estimated N1.34tn generating their own electricity last year as well as building other physical inftrastructure to improve production
Bakrin further disclosed that working capital costs range between 27 and 35 per cent in Nigeria, compared to about nine per cent in Vietnam and three per cent in China.
He also cited the World Bank’s Logistics Performance Index, which ranks Nigeria 88th out of 139 countries, behind Vietnam at 43rd and China at 19th.
Bakrin argued that the timing for industrial reforms was ideal, noting that recent macroeconomic reforms had restored greater stability, with inflation falling significantly from its peak and external reserves rising to about $51bn, the highest level since 2009.
He said the improved macroeconomic environment gives manufacturers greater confidence to plan and invest, even as global supply chains continue to shift.
He warned that AfCFTA presents both opportunities and risks for Nigeria.
To demonstrate that industrial transformation is achievable, Bakrin pointed to Nigeria’s urea industry, which expanded from about 500,000 tonnes of production capacity in 2005 to 6.5 million tonnes today, making Nigeria one of the world’s top ten exporters of nitrogen fertiliser.
He attributed the success to the decision to price natural gas as an industrial input rather than simply as a revenue source.
Bakrin further proposed the introduction of an annual State Industrial Competitiveness Index that would publicly rank states based on power supply, access to land, levies and logistics performance.
In addition, he advocated strict enforcement of Nigeria First procurement policies at both federal and state levels, supported by quarterly compliance dashboards.
‘Every resolution needs a named owner, a date and a way to measure it. Otherwise it becomes another document that gets filed, framed and forgotten,’ he said.