Focus on productive sector can boost job creation, revenue

The Organised Private Sector (OPS) has stressed the need for government at all levels to create an enabling environment that would favour diversification into the productive sector, where less emphasis is made on the extractive industry to boost job creation and revenue generation for sustainable development.

The OPS, run by profit-driven private individuals and groups, operates through the Manufacturers Association of Nigeria (MAN), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), and the Nigerian Employers Consultative Association (NECA).

Speaking in an interview with The Guardian, stakeholders argued that there exists a relationship between economic growth in Nigeria and pragmatic focus on the productive sector, rather than extractive, adding that if proper management of human resources were pursued, with huge investment made on production and processing, the nation’s economy would become more vibrant, especially in the area of job creation.

The Managing Director of Graeme Blaque, Zeal Akaraiwe, noted that the perennial crash of crude oil prices and the exposure of the Nigerian economy to financial crisis have pushed stakeholders and policymakers’ attention to potential in both production and processing.

According to him, the nation’s economic growth would be driven by robust productive and processing industry so that excess yields could be tapped by the export markets.

“The productive sector has a multiplier effect as compared to the extractive sector. You take crude out of the ground, what does it take to import petrol. You can have a logistics company of 10 or 20 people to import petrol, but if you want to refine the crude, you have to build a refinery.

To build a refinery, you create 20 to 30,000 jobs at the construction stage, again to run the refinery you create another 2,000, 3,000 jobs; so just by refining your crude, the multiplier effect is to create jobs, you create income and your GDP grows.

“If you just export the crude and import the fuel, you do not create any job, there is no value addition to the economy and you are exporting a low value product which is the raw material.

“The refining process is what adds value to the crude. And just by shifting from oil to agriculture does not quite solve the problem, because agriculture is still extractive. If you produce 100,000 tonnes of tomatoes, if you do not process it, you are going to export the tomatoes and import the tomato paste.

“The extractive will always get funding, because those who produce will fund you to extract. You do not go far to find money to finance oil well, but to build a refinery, you will struggle because they will not want you to compete with them. Nigeria can be a hub in all West Africa,the multiplier effect is massive.

The President, Association of Corporate Treasurers of Nigeria (ACTN), Ishmael Nwokocha, said there was a need for government to focus more on food production and processing and desist from the incessant ban on imported goods.

“The focus should be to stop exporting commodity and focus on adding value to it like Cote d’Ivoire export $2.5 billion of cocoa, but people who use it, the market shares of those companies are in tens of billions of dollars, just by processing cocoa into chocolate, and that is where we should start focusing our mind on and get away from all these ban and control.”

The Chairman, Association of Capital Market Solicitors, Yinka Edu, urged government to identify structures that would fund long-term production.

She explained that there was need to fund the entire value chain of food production and processing.

“Now is the time for us to prepare and look at structures that will be able to fund long term production. Like the push the government is making in terms of agriculture, they need a lot of funding.

“Even if people produce and they have nowhere to warehouse, they have no means to get goods from one place to another, there are a lot of lost that will go to spoiling. So there was need to fund the entire value chain of production.”

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All these groups need to stop talking and start acting. what is stopping these group from setting up an investment fund that is invested in all the processing they are referring to. it is time our business stop depending on the government to solve every problem and focus on solving this problems to grow the economy.