AN EVALUATION OF THE PERFORMANCE OF THE INDUSTRIAL SECTOR AND ECONOMIC…
1.1 BACKGROUND OF THE STUDY
The industrial sector means many things to many people. To some, it constitutes all business that engages in productive process, while to some others, it is synonymous with the manufacturing sector.
According to Egwaikhide et al (2001), the Nigerian industrial sector is made up of four main types of industry processing, manufacturing, craft and mining industries. The bureau of public enterprises (2008) recognized four industrial sectors considered priority areas of development by the government of Nigeria because of their linkage effects on the other sub-sector and potential catalytic roles in the overall growth economically of the industrial sector.
The need to promote a virile and viable industrial sector due to its linkage effects has been the desire of governments worldwide. It is observed that the industrial sector of the Nigeria economy was relatively insignificant at independences, in terms of contribution to the Gross Domestic Products (GDP). However, since independence, Nigeria has made “frantic efforts” to encourage the development and growth of the sector to increase employment, promote healthy balance of payment and technological innovations, improve technical skills and entrepreneurial talents, and promote good and healthy living standard-economic growths Nigeria is a middle income, mixed economy and emerging market, with expanding financial, service communications, and entertainment sectors. It is ranked 2nd largest in terms of GDP within Africa (behind South Africa). On the track of becoming one of the 20th largest economic in the world by 2020. Its re-emergent, though currently underperforming, industrial sector is the third-largest on the continent, and procedures a large proportion of goods and services for west African region.
Previously hindered by years of mismanagement, economic reforms of the past years have put Nigeria back on track towards achieving its full economic potential. Nigerian GDP at purchasing power parity (PPP) has almost treble from $170 billion in 2008 to $ 451 billion in 2012, although estimates of the size of the information sector (which is not included in official figures) put the actual number closer to $630 billion (National Bureau of Statistic, 2012). Based on the potential roles of the industrial sector, successive governments in Nigeria have articulated policy measures and incentives to encourage the development and growth of the sector (Akinlo, 2008). The proposed investment in the sector is US$900billion (CBN Bullion, 2008) government aims at building a vibrant and growing industrial sector which can create competitive advantages in the face of rapidly increasing globalization. This is article for the achievement of the nations vision of growing the GDP from its current estimated level of US$180b in 2009 to the desired level of US$900billion in the decade. The implication is the expected significant increase in the production of quality and high value goods and services. These will require substantial improvement in performance and competitiveness in the sector, as well as other sectors of the economy.
According to national planning commission in 2009, the industrial sector has the potential to create wealth and employment, the sector has stagnated in Nigeria and its contributions to GDP and employment remain small. The activity mix in the sector is also limited, dominated by import-dependent processes and factors. Although reliable data are unavailable, rough indicators shows that capacity utilization in the sector has improved perceptibly since 2008 but that sector still faces a number of constraints. Perhaps, the vision for the industrial sector is to establish a technologically driven and globally competitive industrial sector, with a high level of local content and contributing more to national GDP. This entails rapid expansion in the technology base, substantial improvement in the quality of the human capital, enhanced efficiency and performances among others.
During the plan period-sustained effort were made to re-invigorate and reposition the sector, to contribute substantially to the nation’s economic growth. To this effect, five sub-sectors have been identified as priority areas. These includes: chemicals and pharmaceuticals (including hydro-carbon based); products basic metals, iron and steel and fabricated metal, food beverages and tobacco, textiles, wearing apparel and leather/leather footwear, and non metalloid mineral products. These represent foremost segment of the industrial sector where Nigerian has or can easily develop comparative advantage. These core area shave the highest potential to provides raw materials for other key industrials in the long-term.
In terms of economic growth, it is observed that the framework and strategies for economic growth in Nigeria for over decades have been that of alignment and re-alignment, policy inconsistency and poor implementation, an government must diversify the economy into non-export sector to abate mono-culturalism. And perhaps, the industrial sector remains private sector driven. Government should however, sustain effort to provide the enabling environment that will enhance the level of operating efficiency, performances and profitability as articulated in the business environment –sector of this plan.
Meanwhile,. Commerce and industry, Akwa Ibim State is saddled with the responsibility to develop Akwa Ibom’ industrial potentials and at the same time attract potential investors. The government has out in place an industrialization blue print to enable such investors examine and leverage in ward looking, import substitution, and export-led industrialization strategies adopted by the state government.
1.2 STATEMENT OF THE PROBLEMS
Government of Akwa Ibom State under the auspices of ministry of commerce and industry, acting as a catalyst to Nigeria’s industrial revolution has made sound industrial policies to encourage the development and growth of the industrial sector. Despite these efforts, the private and public sectors of the economy, the industrial sector is beclouded with various problems that have adversely affected the performances of the sector.
No industry can survive without stable electricity stable electricity supply, but this is a major setback of Nigerian industrial sector, also the inadequacy of infrastructure in Nigeria is a major problems to the industrial sector. The roads, railways and public transport systems, weak technological support and how levels of innovation which lead to production of low quality products, and an consistency in poly framework among others. These problems increase the overhead cost, reduce competitive strength and lead to dwindling capacity utilization. Therefore, there is need to examine the performances of the industrial sector and also to identity its economic growth in Nigeria.
1.3 OBJECTIVES OF THE STUDY
The objective of the study is to:
- Examine the performances of the industrial sector and economic growth between 2008-2012
- Find out the problems associated with the low performances of the industrial sector.