Sourcing raw materials in Nigeria can aid our employment market

Nigeria is known for its wealth in raw materials and solid minerals, but only 46.71 percent of raw materials are sourced within the country, according to the Lagos Chamber of Commerce and Industry. The report states that local manufacturers now outsource raw materials from other African countries , creating a displacement which directly affects workers in the intermediate segments of the local economy. Namely, farmers and workers in the solid minerals sector and animal skin firms.

A report by Renaissance Capital in July 2014 revealed that the manufacturing sector had become Nigeria’s major economic driver, as it was witnessing growth which surpassed those of the oil and gas, telecommunications, and the agricultural sectors. This growth was significantly evident by the second half of 2013, when a 52.7 percent increase in manufacturing capacity utilisation was recorded. By the end of 2013, a subsequent increase of 58.58 percent was noticed in the area of locally sourced raw materials, further showing improvement in the manufacturing sector.

This 11.87 percent drop is attributed primarily to probable poor quality of raw materials and insufficient supply of them within the country. On the other hand, the Manufacturing Association of Nigeria (MAN) attributes this decline to the lack of a functional petrochemical industry, citing that it constrains improvement in local sourcing of industrial input materials.

The current overall unemployment rate in Nigeria is 24 percent, with over 50 percent of Nigerian youth falling into that category. If local raw material sourcing continues at this level, the percentage of unemployment in Nigeria could go higher.

For a country where large deposits of minerals and raw materials like cocoa, rubber, iron ore, coal, and animal skins are found, local manufacturing industries should be impacted positively. The ability of any nation to engage in the transformation of raw materials to finished goods significantly develops their economy. If impacted, these industries can help the Nigerian economy to stop importing finished goods from countries like Italy, China, Spain, and India. These countries  are found on the top of lists of countries with high amount of manufacturing outputs, even though they buy raw materials from here.

Manufacturing industries are capable of providing the economy with a serious boost in employment, by providing opportunities in areas such as research and development, processing, engineering, entrepreneurship, and a lot more. The Nigerian Bureau of Statistics reported 186,334 job losses in the second quarter of 2015. Employment in the areas that sourcing and processing raw materials locally can provide will greatly impact Nigeria’s current struggles with unemployment. According to the Chief Executive Officer of Chi Pharmaceuticals, Dr. Steve Onya, local industries even have the potential to meet Nigeria’s drug needs.

Over-reliance on oil in Nigeria is listed to be another contributing factor to the growing rate of unemployment, particularly because other viable job-generating sectors, like manufacturing, agriculture, and entertainment have been neglected.

In a statement issued by the Special Adviser on Media and Publicity earlier this year in June, President Muhammadu Buhari promised to intervene in the issues facing local industries. His plan involves reviving ailing and moribund textile and mining industries so as to improve the agricultural sector, and thereby keep these local industries operational.

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