Nigeria ranks number 8 on the African Industrialization Index that was released by the African Development Bank (AfDB) Group in November 2022.
In the index, the top 10 countries are ranked as follows; South Africa, Morocco, Egypt, Tunisia, Mauritius, Eswatini, Senegal, Nigeria, Kenya, and Namibia.
Breakdown of Nigeria data: In 2010, Nigeria ranked number 10 at 0.5766. In 2011, Nigeria ranked number 10 at 0.5792. In 2012, Nigeria ranked number 11 at 0.5817. In 2013, the country ranked number 13 at 0.5901. In 2014, the country ranked number 7 at 0.6207. In 2015, the country ranked number 10 at 0.5991.
In 2016, Nigeria ranked number 17 at 0.5635. In 2017, the country ranked number 15 at 0.5734. In 2018, Nigeria ranked 12 at 0.5921. In 2019, Nigeria ranked number 9 at 0.6133. In 2020, Nigeria ranked number 9 at 0.6122. In 2021, Nigeria ranked number 8 at 0.6046.
West Africa performance: In West Africa, Senegal, Nigeria, Cote d’Ivoire, Ghana, and Benin are the advanced countries in industrial development. According to the index, out of the 15 countries in the region, Senegal and Nigeria rank among the top 10 countries. Côte d’Ivoire and Ghana are consistently good performers, benefitting from large coastal economies and steady growth. West Africa benefits from growing economic integration.
Industrialization objectives: According to the AfDB index, the smart use of trade policy offers important tools for African countries to achieve their industrialization objectives. These are:
- Special economic zones and industrial parks can promote linkages between trade and industry. Through incentives such as tax breaks, favourable customs regimes, government subsidies and targeted infrastructure, they can help support the establishment of new export-oriented industries.
- Tariffs policy can help to boost domestic production. The index says the Nigerian government is using tariff policy to encourage the revival of the country’s automotive industry, by raising tariffs on fully assembled vehicles and lowering tariffs on component parts. Nigeria anticipates that the assembly industry could create as many as 70,000 direct jobs and another 200,000 indirect jobs.
- Non-tariff barriers to trade directly correlate with barriers to industrialization. Action to address access to credit, infrastructure and skills enhance policy in other areas.
- Intra-regional trade has the potential to facilitate increased economies of scale, diversification and value addition. The introduction of the AfCFTA has the potential to boost trade in goods among African countries by 52.3%, with industrial products leading the way.
In the report, the AfDB also notes some present conditions that could contribute to Africa’s industrialization. These are:
- Africa has been increasingly stable and well-governed, which is reflected in the continent’s strong growth performance over the past two decades.
- Africa has the youngest population of any continent, and by 2050 will be home to the world’s largest labour pool.
- Africa is an increasingly attractive investment destination, for both foreign and domestic investors.
- Africa is moving rapidly towards an integrated economic space because of the ratification of the Africa Continental Free Trade Agreement (AfCFTA).
For the record: The AfDB says it has approved a $100 million senior loan to a Nigerian fertilizer company, Indorama, to increase its productive capacity, create jobs and target export markets.
- The loan has created 9,000 construction jobs and nearly 500 long-term jobs while benefitting over 330,000 farmers through out-grower schemes.
- As well as boosting exports, the projects promote more use of fertilizer, addressing one of the major constraints on Nigeria’s agricultural development