By OTUNBA NIYI ADEBAYO
It is indeed my singular honour and privilege to address you today at this CEO Interactive Session for the Consumer Goods Sector, a programme as put up by the Nigerian Stock Exchange (NSE). This event is timely at this stage of our economic development, particularly with the rapid growing population and the need to create effective linkages between and amongst sectors. I would like to commend the leadership of NSE for the critical role you are playing in the economy by providing businesses with access to long-term funding and providing platforms such as this, to drive continuous discussions amongst Industry players, Policy makers and the Government.
There is no doubt that the consumer goods sector remains a critical segment and plays an integral role Page 2 in the development and advancement of the Nigerian economy. Available statistics shows that Nigeria’s GDP grew 1.94% (year on year) in real terms in the second quarter of 2019, with the Manufacturing sector contributing 11.49% to Nominal GDP. The sector has nonetheless experienced various economic turmoil in recent years, as witnessed in areas like foreign exchange challenges between 2014 and 2017.
Immediate steps were taken to redress the problems as in the ban of 41 items in 2015. We also can recall currency depreciation which triggered higher cost of production, Insecurity in the Country leading to reduced sales, high excise duties on importation of raw materials and multiple taxations, just to mention but a few. I believe that the purpose of this interactive engagement today is to formulate strategies and collaborative efforts with the Federal Government to optimize the intrinsic potentials in the sector and to proffer solutions to the numerous challenges faced by players in the sector.
Nigeria is one of the fastest-growing consumer markets not only in Africa, but the world at large. Nigeria’s consumer market is valued at $377 billion in 2013 and expected to peak at $454.3 billion in 2025. This growth is driven by three major factors – Population, Urbanization and Increased spending power. It is common knowledge that the existence of a large market presents an opportunity for growth in the consumer goods sector. Nigeria with a population estimated at 200million people with 72% under the age of 30 indicates huge potential for future investment and consumption activities.
It is projected by the United Nations (UN) that most global population, between 2017 and 2030, will be absorbed by cities, and that new residents in urban areas will count for about 1.1 billion over the next 13years. Similarly, the UN Department of Economic and Social Affairs forecasts that 66% of the world population (2.5 billion people) will reside in urban areas by 2050.
This anticipated push towards urban centers will undoubtedly provide a unique opportunity for the growth of the consumer sector. In all of these, Ladies and Gentlemen, Nations must be proactive and focused to deliver the right policies and programs using critical institutions – Both Public and Private – to boost output by providing the right environment and financing for businesses to thrive. This, to my mind, is where the capital market should take the lead as a financial intermediator.
The Federal Government remains committed to improving the business environment towards Industrialization and Economic prosperity. The restriction of the availability of foreign exchange to the importation of 44 items in 2019 which could be competitively produced within the economy and the recent border closure hinges on Government’s policy of enhancing demand for locally manufactured goods and enabling favourable competition amongst manufacturers. The gains being recorded from this twin policy should increase domestic business activities and make the capital market more active. 6. You are all aware that the Economic Recovery and Growth Plan (ERGP) aims to achieve a more diversified and inclusive economy by 2020.
We are therefore committed to work with stakeholders to eliminate the bottlenecks which hitherto have hindered the growth of the sector. Also high on the agenda of this Administration is the stabilization of our economy to recapture exiting foreign direct investments from the country. I would like to use this opportunity to assure the business community that Nigeria remains a good destination for investment. His Excellency, President Muhammadu Buhari’s strategic and strong reforms agenda places Nigeria in the top 10 improver list.
This laudable progress is in addition to the marked improvement from 145th to 131st position on the 2019 ease of going business World Bank rankings. This progress was due to reforms initiated and implemented by the Nigerian Government in providing an enabling environment for businesses to thrive. The Federal Ministry of Industry, Trade and Investment, through the Nigeria Industrial Revolution Plan (NIRP), is also addressing some key challenges in the manufacturing sector, such as limited access to credit and financial services, poor infrastructure and unreliable power supply, which have resulted to reduced competitiveness and profitability.
In addition, the Ministry is promoting a strategic linkage between agriculture and Industry through the implementation of an agribusiness and Agro Industry initiative (NAADI). The main goal of this initiative is value addition through processing of Agri-commodities. A lot of investment is required in the implementation of this initiative and the Capital Market should come in handy alongside other funding institutions such as the World Bank, African Development Bank, Afrixim Bank, e.t.c to promote the initiative.
Finally, I wish to restate Government’s commitment to collaborate with the private sector in key business areas, and proffer viable solutions to challenges bedeviling our economy. I urge the private sector to continue to provide candid feedback on the impact of Government’s economic reforms, as we collectively strive to make Nigeria Africa’s economic hub. 9. Thank you and God bless.
KEYNOTE ADDRESS BY THE HONOURABLE MINISTER, INDUSTRY, TRADE AND INVESTMENT, OTUNBA NIYI ADEBAYO, CON, AT THE NIGERIAN STOCK EXCHANGE CEO INTERACTIVE SESSION FOR THE CONSUMER GOODS SECTOR, SCHEDULED FOR FRIDAY, 29TH OF NOVEMBER, 2019, AT THE CIVIC CENTRE, OZUMBA MBADIWE AVENUE, VICTORIA ISLAND, LAGOS.