For developing countries to get up to speed, the economies need to substantially grow. Many of the United Nations SDGs are symptoms of weak economies whether, girl child education, healthcare or clean water.
A key challenge of the Nigerian economy and some developing nations is the over-dependence on imports versus exports which causes forex scarcity and devaluation. The Nigerian currency has gradually devalued over the decades especially in 2015 that naira devalued almost 100% from N199 to N365 for $1.
PPPs can make manufacturing in Nigeria more attractive by ensuring local cost of production competes fairly with landed cost of importation from the top import origins- China and United states of America by creating shared infrastructure zones for manufacturing. Reference within Africa is the renowned textile manufacturing hub in Ethiopia that has already attracted brands like H&M and on track to position Ethiopia for global textile sourcing. Shared infrastructure zones is mostly design to bring down cost of production through scale. It offers shared infrastructure that SMEs may typically not have affordable access to such as production & processing capacity, electricity, warehousing and transportation.
A scaled effort between multiple private enterprises and public ones to establish and expand shared manufacturing cities with adequate infrastructure across Africa will slash cost of production especially for SMEs. The shared economy framework has proven successful and should be applied to manufacturing to reduce electricity, logistics, overhead, manufacturing capacity and depreciation costs. These manufacturing cities should also be boosted by government policies such as better implementation of local production incentives from the
government and higher import taxes on similar imported products will skew investors towards local production.
Population forecast for Nigeria is 402million by 2050. With a current
unemployment rate of 23.1%, population may not be a great blessing if local production doesn’t aggressively grow to create more employment and minimize pressure on local currency. Local manufacturing is imperative to create multiple steams of employment across the value chain: from raw materials back ward integration, transportation, actual manufacturing, distribution, branding and retailing.
This article was published in B Inspired Magazine (Brusells airline) Page 90-91. Link here http://binspired.ink-live.com/html5/reader/production/default.aspx?pubname=&edid=cd9e5f33-86fc-4b84-a591-e6f0088bd401