Nigeria is a third world country and is yet to be called an industrial nation. The country is very rich in natural resources even though she is yet to make efficient use of them. Countries like the United States and China have the best economies and they are the richest in the world because they are manufacturers.
Countries who manufacture and export more does better than countries who import more and export less due to low rate manufacturing. If Nigeria is to become a developed country, she must boost her manufacturing sector. Manufacturing is the difference between the third world countries and the developed countries. In this article, we discuss how to increase manufacturing in Nigeria.
Ways To Increase Manufacturing Inside Nigeria
1) Power supply
The use of alternative power supply like diesel generators will make the production cost in manufacturing to increase. Nigeria has one of the largest dams in West Africa but she is yet to provide efficient power supply for her citizens. However the country can still promote her power supply using appropriate measures below:
- Increasing power generation
The government of Nigeria should take steps to increase power generation in the Kainji Dam which is the major dam generating electricity for Nigeria.
- Efficient power distribution
Nigeria is yet to account for how the power generated in her dams are distributed due to an inefficient distribution system. Better and more efficient power distribution should be put in place. This will help Nigerians make effective use of the power generated by Nigeria.
- Cutting down corruption
There is much corruption in Nigeria and this have some effects in power supply in the country. Some of the leading officials in Nigeria’s power sector are corrupt and will not tell Nigerians the truth. Measures of electrical power generated in Nigeria are diverted for dubious purposes and this electrical power is meant for the public. Cutting down corruption is a sure way of promoting power supply in Nigeria.
Efficient power supply will enable manufacturing companies to increase their production.
2) Skilled labour
Manufacturing involves skilled labour and the government should take measures to train more skilled workforce through the award of scholarships and the provision of necessary educational infrastructure. This skilled workforce are to man the manufacturing companies inside Nigeria. Training of skilled labour should be encouraged within Nigeria since this will promote manufacturing.
3) Loans to manufacturing
Loans will encourage many of the manufacturers to increase their production. Granting loans to these manufacturing companies especially the emerging ones will boost manufacturing in the country. The government should take measures to see that the quality of local products are much more comparable with their foreign counterparts. This will encourage Nigerians to buy products made in Nigeria.
4) Government policies
Some government policies can encourage manufacturing. One of such policies is the monetary policy. This monetary policy aims to cut down cash supply so as to reduce the price of bonds and promote rates of interest. Monetary policy from the government will cut spending by a reasonable percentage since there is less cash. This makes people to save money rather than spend.
Using a contradictory policy method will encourage manufacturing in Nigeria. Increasing interest rates through the Central Bank of Nigeria will make banks increase their rates for lending. When rates soar, the prices of goods will drop including the rate of spending. The government should encourage policies that offer more interest on bonds in order to encourage investors to buy bonds. This can increase the rate of exchange for a currency.
Money will move from banks, investors and firms to the government with this policy.
5) Better channels for distribution
An efficient distribution channel will encourage manufacturers to produce more. A retail channel to bring the products to consumers will encourage manufacturing. This will promote the growth of small and medium scale enterprises.
6) Promoting local goods
In Nigeria local goods are taken as inferior to their foreign counterparts. This notion may discourage local manufacturers. Many Nigerians prefer foreign products to local products. The government can encourage local production through campaigns and the use of incentives for local producers.
7) Reducing inflation
Inflation have increased the price of raw materials and goods in Nigeria. This makes manufactured products to cost more. When the products are costly, it can reduce patronage by the consumers.