The National Sugar Development Council (NSDC) has called on Nigeria to reduce the cost of production across key sectors to strengthen its position in the African Continental Free Trade Area (AfCFTA) market.
The Executive Secretary of the council, Kamar Bakrin, gave the warning on Sunday while presenting a paper at the technical session of the 17th National Council on Industry, Trade and Investment (NCITI) in Abuja.
Bakrin said Nigeria faces a crucial decision: either position itself to compete for Africa’s estimated 1.4 billion consumers or risk losing the market to countries with more affordable production environments.
He identified high electricity costs, expensive loans and inefficient transportation systems as major challenges weakening the competitiveness of Nigerian manufacturers.
According to him, manufacturers in Nigeria pay between 15 cents and 30 cents per kilowatt-hour for electricity, compared with about eight cents in Vietnam and 10 cents in China. He added that unreliable power supply forced businesses to spend approximately N1.34 trillion on self-generated electricity in the previous year.
“Every factory in Nigeria is running a second, unwanted business as a private power station,” Bakrin said.
He also noted that Nigerian manufacturers access credit at interest rates ranging from 27 per cent to 35 per cent, far higher than the rates available to competitors such as Vietnam and China.
The NSDC boss further highlighted Nigeria’s poor logistics performance, noting that the country ranked 88th out of 139 nations on the World Bank’s Logistics Performance Index.
He said manufacturing currently accounts for only eight per cent of Nigeria’s Gross Domestic Product (GDP), while factory capacity utilisation has dropped to 57.7 per cent.
Bakrin argued that the challenge facing the manufacturing sector was not a lack of demand but the high cost of doing business, which he said could be addressed through deliberate policy measures.
He acknowledged that recent economic reforms had improved some areas of the economy, including easing inflation pressures and boosting foreign reserves to $51 billion. However, he warned that international manufacturers seeking new locations for their supply chains would not wait forever for Nigeria to become competitive.
He pointed to the growth of Nigeria’s urea industry as an example of how effective industrial policies could transform local production and increase exports. According to him, urea output increased from 500,000 tonnes in 2005 to 6.5 million tonnes after supportive gas pricing policies were introduced.
“When a country prices inputs as if it wants industry to live, industry lives,” he said.
Bakrin recommended reducing industrial electricity costs to between eight cents and 10 cents per kilowatt-hour, introducing single-digit lending rates, improving port processes to below seven days and increasing worker productivity by 2030.
He also urged states to establish at least one industrial cluster with dedicated electricity supply within the next 12 months.
Other measures he proposed include harmonising government levies, creating a State Industrial Competitiveness Index and ensuring that public procurement policies prioritise Nigerian-made products.
The NSDC executive secretary stressed that government incentives, including tax reliefs and subsidised power, should be linked to measurable performance targets.
He encouraged state governments to improve electricity markets, provide industrial land, simplify business charges and align technical education with industry requirements.
According to Bakrin, a stronger manufacturing sector would create employment opportunities, reduce dependence on imports, strengthen the naira and discourage young Nigerians from seeking opportunities abroad.
He said Nigeria’s industrial future would depend on reducing energy costs, improving access to finance and making trade processes more efficient, warning that the opportunity to become a major player in Africa’s market would not remain open indefinitely.