Nigeria’s ambition to become a major supplier of sugar and other manufactured goods across Africa is under growing pressure, with industry leaders warning that high production costs are making locally produced goods less competitive in the continental market.
The warning came from the Executive Secretary of the National Sugar Development Council (NSDC), Kamar Bakrin, during the technical session of the 17th National Council on Industry, Trade and Investment held in Enugu.
Bakrin said the implementation of the African Continental Free Trade Area (AfCFTA) presents both an opportunity and a challenge for Nigeria. According to him, the country must improve its industrial competitiveness or risk being overwhelmed by cheaper imports from other African nations.
He explained that under AfCFTA, African markets are becoming increasingly interconnected, meaning countries with lower production costs will gain a competitive advantage. If Nigeria fails to reduce the cost of manufacturing, locally produced sugar and other goods may struggle to compete across the continent.
One of the biggest challenges, he noted, is the high cost of electricity. While manufacturers in countries such as Vietnam and China enjoy relatively low industrial power tariffs, many Nigerian businesses rely on expensive diesel-powered generators due to unreliable electricity supply. This significantly raises production costs and reduces profit margins.
Bakrin revealed that Nigerian manufacturers spent an estimated N1.34 trillion on self-generated electricity last year, describing the situation as one where factories are forced to operate their own power stations instead of focusing on production.
He also highlighted the high cost of borrowing in Nigeria, where working capital loans attract interest rates of between 27 and 35 percent. By comparison, businesses in countries like Vietnam and China enjoy much lower lending rates, allowing manufacturers there to expand production more efficiently.
According to him, manufacturing currently contributes only about eight percent to Nigeria’s Gross Domestic Product (GDP), while industrial capacity utilization remains below optimal levels.
To strengthen Nigeria’s competitiveness, Bakrin proposed several reforms, including dedicated electricity supply for industrial clusters in every state, harmonized taxes and levies across the country, and the elimination of multiple checkpoints that delay the movement of goods.
He also called for the introduction of an annual State Industrial Competitiveness Index to rank states based on infrastructure, power supply, logistics, and ease of doing business. In addition, he urged both federal and state governments to fully implement the Nigeria First procurement policy to encourage greater patronage of locally produced goods.
Bakrin stressed that Nigeria should aim to reduce industrial electricity costs to between eight and ten US cents per kilowatt-hour, lower lending rates to single digits, and cut port clearance times to less than seven days to match global standards.
He pointed to Nigeria’s rapid expansion in urea production—from 500,000 tonnes in 2005 to 6.5 million tonnes today—as evidence that industries can thrive when supported by favorable government policies and affordable production inputs.
Industry stakeholders believe that implementing these reforms will not only strengthen Nigeria’s sugar sector but also improve the country’s ability to compete in the wider African market under AfCFTA.
