LAGOS – The founder of BAA Consult Limited, Dr Biodun Adedipe, has said that a major reason the economy is struggling for survival is because its growth is largely driven by the services sector rather than the real sector.
Speaking on economic projections for the year recently, he said even though the real sector can create more jobs and generates more foreign exchange (FX) than the services sector; the former is struggling with too many issues and has been left to decay, severely limiting its potential to perform optimally.
“The service sector is about 54 per cent of the country’s gross domestic product (GDP) and this speaks to why we are having the challenge of stagnant growth. Until we address and revamp manufacturing and improve productivity in the agriculture sector, we will never get the kind of growth we desire,” he said.
He said food deficit and insecurity mean different things, with the former meaning Nigeria not having enough food or the kind of food that people can eat. He said the country is battling more with the latter and the only way to deal with it is to produce in large volumes like other countries have done.
“We have been asking ourselves how to deepen Nigeria’s productivity and improve cultivation and the answer is simple. We must ramp up production and significantly reduce our 60 per cent post-harvest losses, meaning Nigeria must invest in infrastructure for storage and processing. If we can do these, we will increase food availability, which is the first and key element of the four legs of food security. If we can increase the volume of food produced in the country, it will take care of affordability and reduce inflation.”
He said it is clear from available data that food inflation remains a major challenge in Nigeria and to tackle this problem, the government must work on overall security, which will in turn positively affect food security and ultimately, stem food and headline inflation.
“Energy cost for production is another major problem and there is little we can do without energy. Hopefully, if a significant volume is made available for distribution, it will reduce the cost per unit.
“When it comes to manufacturing, we must go back to the basics. To encourage local production, there must be incentives in place to encourage local manufacturers. They are already dealing with so many issues and if we intend to revamp the sector, the government must do things differently this year. Duties on imported finished goods should be increased while duties on raw materials and inputs for domestic manufacturing should be reduced with affordable FX and credit made available to them,” he said.
Lagos Free Zone (LFZ), the first privately-owned zone in Nigeria, has called for collaboration with the Deputy High Commission of Canada to facilitate foreign direct investment (FDI) to the zone.
Adesuwa Ladoja, the Chief Executive Officer of LFZ, stated this in Lagos after receiving a delegation from the Deputy High Commission of Canada led by the Deputy High Commissioner of Canada, Carlos Rojas-Arbulu.
Ladoja, who expressed appreciation for the visit, said it was the beginning of a fruitful relationship that she hoped would result in new businesses from Canada setting up at the LFZ.
She explained that the zone, which is promoted by Singapore-based Tolaram, is the first privately owned special economic zone in Nigeria, covering 860 hectares.
She noted that LFZ is unique in its focus on delivering ease of doing business, giving businesses a competitive edge.
“LFZ offers many competitive advantages and incentives for investors interested in locating their businesses in the Zone; these include single-window clearance for regulators, enabling infrastructure, the opportunity to live-work-play and access to global markets. One other unique benefit of the Zone in Nigeria is that it is the only Zone that is integrated with a deep seaport,” she said.
She shared that the zone is a thriving destination for new investments and has already attracted over $2.75 million in capital.
Speaking during the visit, Rojas-Arbulu noted that he was impressed and amazed by the quality and the scale of operations at the Zone, adding that effort is ongoing to cement a collaboration that can generate foreign exchanges.
Rojas-Arbulu acknowledged that Canadian investments have typically been region-specific but noted that the strong infrastructure at LFZ presents a valuable opportunity to attract more Canadian companies.
Trade Commissioner at the Deputy High Commission of Canada, Zaya Kuyena, expressed satisfaction with the zone’s infrastructure, noting that it offers significant business opportunities in Nigeria. He called on LFZ management to raise awareness of the zone and its trading partners, emphasizing its strong logistics capabilities and export potential.
“With world-class infrastructure in place, the Zone supports all elements of the supply chain, making it an ideal destination for foreign companies looking to establish operations or export,” Kuyena said.
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