Reading in History and Development of Industrial and Agricultural Development Policies in Nigeria

The quest for sustainable economic development in most countries characterized as Less Developed Countries (LDCs), Nigeria inclusive has occupied the front burner in most national discourses.

Successive governments in Nigeria have indicated desire to transform the country’s economy in terms of provision of infrastructure, human capacity development and even in the realm of social cum political development. In this wise, Nigeria has experimented with several development plans from pre-independence era till date, yet the needed transformation has continued to elude its citizenry in spite of the robust plans.

Recently, attentions have shifted to the attainment of sustainable economic development goals through economic diversification strategy. This current development is partially due to the incessant fluctuation in trends of economic growth and development witnessed monoculture Nigeria economy.

Nigeria is one among many countries like Brazil, Maylasia, China etc that have long embarked on the journey of economy diversification but the success achieved in other countries is incomparable to that witnessed in Nigeria.

We shall in this blog post be analysing separately, the agricultural and industrial policies put in place in the various economic development plans up to vision 2010 and advance reasons why these plans had not achieved their objective of economic diversification and sustainable development in Nigeria.

INDUSTRIAL POLICIES IN NIGERIA

Industrialization drives economic growth and fast track the achievements of structural transformation. The industrial revolution of the 19th century which catapulted most Europeans countries of today to their present development status was caused by industrial development.

Owing to its inherent potential benefits, rapid industrial development has become one of the focal economic growth and development strategies employed by countries clamouring for sustainable economic development.

Industrial development policies have been somewhat lacking in Nigeria even since before the country got it political independence.

It is a generally known fact that Industrialization was not part of the British colonial economic policy in Nigeria. British’s exploitative economic policies master minded by theories such as Myint “vent-for-surplus,” international trade theory facilitated by the principle of  comparative advantage and other received (orthodox) economic theories didn’t favour Nigeria industrial development because they are anchored on making the colonies primary product producers and importers of finished goods.

As a result of the above, the first indigenous administration after political independence in 1960 set out for itself the transformation of the Nigerian economy into a modern industrial economy. This was also manifested in other National Development plans starting from 1962-1968, 1970-1975, 1975-1980, 1981-1985 and 1986-post SAP; all of which embraced rapid industrialization as one of the core national development objectives.

PHASES OF INDUSTRIAL DEVELOPMENT IN NIGERIA

The process of industrial development in Nigeria can be categorized into four phases; each phase coincides with Nigeria economic development plan.

Phase one started from the end of the Civil War through the oil boom period (1970-1979). This period was marked by the centralization of industrial planning and excessive government involvement in industrial activity.

Phase two was the oil burst era (1980-1985), when the glut in the international oil market reduced drastically Nigeria’s foreign exchange earnings and thus impacting negatively on industrial activities during the period.

Phase three was the structural adjustment programme period (1986-1998) in which government sought to rationalize its role by reducing direct participation in industrial activities.

Finally, phase four (1999-date) is regarded as era of the consolidation of structural reforms.

The performance of the industrial sector in achieving economic diversification objective of the country can be objectively analysed based on the examination of industrial production during these phases.

An examination and analysis of Table 1 (not included) using the compound growth rates would show the performance of the industrial sub-sectors in the selected time periods. The uniqueness in using compound growth rate is that it being exponential has the ability of capturing the rate of growth over a period of time.

Compound growth rates of industrial sub-sectors in selected periods reveals that manufacturing output during phase one (1970-1979) and phase two ( 1980-1985) had steady increase over the years with an overall percentage growth rate of 23.4 per cent for the two periods. Mining and quarry intensified in phase one and negatively decreased in phase two with an average growth rate of 38.6 per cent and -0.12 per cent respectively.

The modest performance compared with the extensive government investment in the sector through direct investment was because most of the key projects that were anticipated as foundation for self-sustaining and dynamic growth like the Ajaokuta Iron and Steel Complex; Oku-Iboku Newsprint Paper Mill; The Eleme Petrochemical Complex; Aladja Direct Steel Reduction Plant; and the Liquefied Natural Gas (LNG) plant at Bonny were either not completed or could not take off.

The performance of the industrial sector declined considerably during phase three and four (1986-1998 and 1999-2007) with an average performance of 0.9 per cent and 7.3 per cent respectively. Notwithstanding the unimpressive performance of the mining and quarry subsector in phase two, the subsector recorded on the average a 23.5 per cent and 25.3 per cent positive rate of growth during the third and fourth phases respectively.

The building and construction subsector made quite a good performance in phase one with a positive growth rate of 28.02 per cent but declined considerably in phase two with a negative growth rate of -13.6 per cent. However, this negative growth rate was reversed in phases three and four as the subsector recorded a 21.8 per cent and 28.7 per cent positive growth rates respectively. 

Utilities sub-sector recorded an average positive growth rate of 21.0 per cent in the four phases. Putting all the sub-sectors together, the industrial sector recorded an average positive simple growth rate of 31.9 per cent in all the four phases that is 1970-2010, though this growth rate is not significant considering the long period of time involved.

We shall in my next blog post be discussing agriculture policy in Nigeria within the same time frame and finally we shall be concluding the article series by highlighting the causes of the unappreciative performance and failure of the national development plans in the country.