Nigeria’s recent entry into the BRICS+ partnership has generated excitement about potential trade opportunities and an enhanced global influence. However, beneath this wave of optimism lies a significant question: Is Nigeria truly ready to compete on the global stage?
According to Mr. John Aluya, CEO of Technoglass Industries Ltd and a national council member of the Manufacturers Association of Nigeria (MAN), Nigeria’s BRICS aspirations face a significant challenge—the lack of competitiveness of locally manufactured goods.
The Core Challenge: High Production Costs Driven by Infrastructure Deficits
While many nations prioritize innovation and efficiency, Nigerian manufacturers are grappling with basic infrastructure issues that drive up production costs. Among the key challenges are:
- Power Supply: Most manufacturers rely on self-generated power using expensive diesel and petrol generators.
- Water Supply: Many companies have to self-source water for their operations.
- Unreliable Roads: Poor road infrastructure increases transportation costs and delays.
To compound these challenges, a recent 250% hike in electricity tariffs—with no corresponding improvement in supply—has left manufacturers struggling. The result is that Nigerian-made products are far more expensive than their imported counterparts.
“It’s not that Nigerian manufacturers aren’t putting in the work,” says Mr. Aluya. “But they’re constrained by the high cost of doing business in an environment where they have to provide basic infrastructure themselves.”
Nigeria’s BRICS Status: A Clarification
It is essential to understand that Nigeria is not a full BRICS member. Instead, we hold partner country status, possibly with observer status. This distinction matters because, as Mr. Aluya notes, the tangible benefits of this partnership remain unclear.
One example is the much-discussed BRICS currency proposal aimed at reducing global reliance on the U.S. dollar. While this sounds promising, Mr. Aluya is skeptical:
“The dominance of the dollar is deeply entrenched. Creating an alternative currency is not enough; it requires dismantling global systems that have existed for decades.”
Can Nigeria Compete in Global Markets?
Here’s the hard truth: Outside of crude oil, Nigeria has very few globally competitive exports. Even within Africa, we face the risk of becoming a dumping ground for products from more industrialized countries such as South Africa, Morocco, Egypt, and Algeria—where manufacturers benefit from better infrastructure and lower production costs.
A recent example is Nigeria’s first African Continental Free Trade Area (AfCFTA) shipment: synthetic hair extensions to Kenya. While this was celebrated as a milestone, Mr. Aluya’s response is blunt:
“Is this really what we’re celebrating? What about agricultural exports like yams or plantains? Or manufactured goods like plastics, automotive parts, or dairy products? The reality is, we’re simply not competitive enough.”
The Way Forward: Prioritizing Infrastructure Development
The key to unlocking Nigeria’s potential lies in addressing its infrastructure deficits. However, Mr. Aluya is critical of the government’s heavy reliance on borrowing to fund projects. Instead, he suggests adopting Build-Operate-Transfer (BOT) models, where private companies finance, build, and operate infrastructure projects before transferring ownership to the government.
“Borrowing isn’t the answer,” he emphasizes. “BOT models reduce debt while ensuring quality infrastructure.”
The Bottom Line: Turning Potential into Performance
Nigeria’s BRICS+ partnership presents a golden opportunity, but it is not a silver bullet. Without addressing fundamental issues such as poor infrastructure, high production costs, and over-reliance on borrowing, Nigeria’s global ambitions will remain just that—ambitions.
The real question is:
Can Nigeria move from being a BRICS partner in name to becoming a true competitive force on the global stage?
The future depends on the decisions we make today. Solving infrastructure challenges, reducing production costs, and building a more business-friendly environment are critical steps toward making Nigeria’s BRICS aspirations a reality.
Interesting..