Examining the Ineffectiveness of The Industrial Policies in Nigeria (Essay Sample)

Examining the Ineffectiveness of The Industrial Policies in Nigeria Name Institutional affiliation Course Instructor Date Examining the Ineffectiveness of The Industrial Policies in Nigeria Analysing the industrial policy experience in Africa or Latin America requires a deep analysis of the specific country within the region. In Africa, the issue of industrialisation has begun to increase rapidly in many countries. This is due to the advancements in technology globally. The process of industrialisation is guided by the industrial policies that the government adopts to monitor and facilitate the entire process. According to Chang and Andreoni (2020), industrial policies are government strategies promoting industrialisation, productivity, and economic growth. This strategy may vary significantly from one country to another. The variation may be rooted in significant factors such as governance structures, policy implementation, external influences, and global economic dynamics. Industrial policies are fundamental because they fuel industrialization with appropriate techniques and strategies to enhance productivity. Effective industrial policies have escalated much economic growth in some African countries. However, in African countries such as Nigeria, the process seems less successful due to the ineffectiveness of the industrial policies guiding the process. Nigeria is among the largest economies in Africa, and it has experienced various industrial policies to increase industrialisation and economic growth. However, despite the country's effort to develop this policy, the outcome could have been more effective, hence sabotaging the entire process of industrialisation. The essay examines the industrial policies in Nigeria, factors that lead to the ineffectiveness of the industrial policies in promoting sustainable industrialisation and economic development in Nigeria and gives suggestions on effective measures to take to mitigate the challenge in the future. Overview of the Nigeria Landscape Policies Nigeria has a long history of industrial policies believed to have started during the independence era. The country has taken measures to develop various policies that support economic growth. According to Ou (2015), some of the industrial strategies that have been developed in Nigeria include import substitution industrialisation (ISI), which was implemented between the year the 1960s and 1970s, export-led industrialisation (ELI) in the 1980s and more recent initiatives focused on diversifying the economy away from oil dependence. The country's effort to come up with these strategies reflects the country's thirst and zeal for industrialisation and economic growth. It is fascinating to note that although industrialisation has just recently started to take place in the African continent, the knowledge about industrialisation reached Africa long ago, even before their independence. The fact that Nigeria began to adopt industrialisation policies back in the 1960s is proof that the idea of industrialisation and economic growth is familiar to Africa. Africans have been striving to foster industrialisation and economic growth in their countries for a long time. The biggest question of concern is why the process has taken so long to be effective compared to the pace of industrialisation in first-world countries. Import substitution industrialisation (ISI) Era The import substitution policies were formulated in Nigeria long ago to help the country's overreliance on imports from other countries. The prime goal of these policies was to support domestic production through tariffs, import restrictions and subsidies. According to Chete et al. (2014), tariffs were imposed on imported goods to make them more expensive than domestically produced goods, discouraging most people from purchasing them. The Nigerian government also created import restrictions such as quotas and requirements, making the process long, complicated, and expensive. It discouraged many Nigerians from importing products into the country and supporting the local industries. Subsidies were also given to local manufacturers to lower production costs, hence increasing production (Isiksal & Chimezie,2016). The aim of discouraging people from relying on imported goods was to promote locally manufactured goods. According to Lin and Chang (2009), government subsidies are suitable mechanisms for enhancing innovation. The Nigerian government decided to encourage more innovation by financing innovation activities. However, these policies could have been more effective as they led to a lack of competition in the country's domestic industries. Okoye et al. (2016) state that the focus on promoting local domestic industries discourages investors from establishing globally competitive industries. Also, Nigeria's focus on internally produced goods discourages most of its industries from competing with foreign industries. This decreased innovation, paramount in promoting industrialisation and fuelling economic growth. The export-led industrialisation (ELI) Era. In 1980, Nigeria significantly changed its industrial policies by shifting the attention from import substitution to export-led industrialisation policies. This policy was an initiative to address the economic challenge that had taken deep root in the country, precisely the debt burden issue and the decline in oil revenues (Adefolaju,2017). The decline in oil revenues has resulted in a severe decrease in economic growth. The Structural Adjustment Program (SAP) implemented during this period emphasised fundamental economic factors, including market liberalisation, privatisation, and export-oriented policies (Nyor & Chinge, 2014). The program's goals were to enhance export competitiveness and attract foreign investors to the country. However, the policies turned out differently than expected. It became one of the worst policies because it led to deindustrialization, job losses, and increased poverty levels (Ibitoye et al.,2022). This is because the program led to the dismantling of the domestic industries in the country with the focus of paving the way for foreign investment, hence killing the effort of local people towards supporting economic development and industrialisation. Although foreign investment enables countries to develop economies, magically, supporting domestic industries is equally important because it also significantly promotes economic growth. Most people find it comfortable working in their own-made industry where they know the policies. However, dismantling their results in the majority of them being jobless, hence increasing poverty in the country. This is similar to ward the export-led industrial policy cause in Nigeria. Recent industrial policy initiatives Recently, Nigeria has developed new industrial policies to boost economic growth and industrialisation. Since most African countries are now on the front line of promoting industrialisation, Nigeria wants to stay strong. Although the initial policies have not been fruitful, the government has continued developing more advanced policies that would help it align with economic growth initiatives. The most recent initiatives in the country include the Nigerian Industrial Revolution Plan (NIRP), the Economic Recovery and Growth Plan (ERGP), and the National Industrial Policy (NIP), among others (Uzoma, 2024). The policies have prioritised fundamental factors influencing industrialisation, such as agriculture, manufacturing and other essential services. The recent policies in Nigeria aim to improve infrastructure, enhance access to finance and promote innovation through the advancement of technology. Critical analysis of the Nigeria industrial police experience. Despite implementing many industrial policies, Nigeria faces many challenges in achieving sustainable industrialisation and economic growth. Some of the critical issues that are escalating the circumstances include the following; Infrastructure deficit. The country needs more structure, which significantly impacts economic growth. According to Uhuru (2021), Nigeria is still experiencing challenges such as a poor transport system, power shortage, and limited access to water and sanitisation. This constrains the country's industrial competitiveness. There must be enough power and water for the production process to occur in the industries. The machines that produce a lot rely on the power to work, and water is also used to do many activities such as cooling the machines, cleaning the premises, and others. After manufacturing, they are usually transported to various warehousing or suppliers. Poor transport systems inhibit transportation and make transporting raw materials to the industry hard. Their lack of infrastructure reduces production, discourages investments and undermines economic growth. Policy implementation challenges Another considerable challenge affecting the success of industrialisation in Nigeria is the implementation of policies. A reliable structure needs to be used to implement the industrial policies in Nigeria. According to Uhuru (2021), the implementation process is sabotaged by bureaucratic inefficiencies, corruption, and lack of coordination among government agencies. Corruption in the government could be more efficient and result in better management of the resources allocated to the implementation process, affecting the whole process. Corruption can result in the official allocation of limited resources to the process, making it difficult for the implementors to address all the key levels. Since industrialisation and economic growth affect everyone in the country, they must coordinate and work with various organisations for the process to be effective. Lack of coordination among agencies limits the country's ability to gather information from various sources and seek assistance from various organisations, experts, and locals, making the proces...