March 28, 2024

Industrial enterprise in Nigeria can be broadly classified into (i) local arts and craft, and (ii) modern manufacturing.

 

Local Arts and Craft

Long before the coming of Europeans and modern manufacturing to Nigeria, the fabrication of local items, such as, knives, cutlasses, wood and metal carvings, clothing materials, baskets, among many other items, was done by local craftsmen. People also have long engaged in local brewing and distilling of alcoholic beverages. Some of the major cities of production include:

  1. Cloth weaving and dying in Kano, Okene and Abeokuta.
  2. Wood carving in Benin City.
  3. Metal works (brass, iron, tin, aluminium) in Bida, Awka and Benin City.
  4. Ivory carving in Owo.
  5. Leather works in Kano, Zaria and Naraguta Jos.
  6. Calabash carving/decoration in Oyo.
  7. Rafia works in Ikot Ekpene.
  8. Making of local gin in the Niger Delta.

 

Importance of Local Crafts

Arts and craft are of great economic importance to the immediate locality where they are produced and the country at large. These are highlighted as follows:

  1. The technology employed in the production of arts and crafts is simple and can easily be acquired by the local people.
  2. Local crafts support an apprenticeship system through which many young men and women acquire skills, which sometimes stand them in good stead for employment in modern manufacturing industries.
  3. The capital required for setting up the crafts workplaces is low compared to that of modern manufacturing.
  4. It helps to reduce the importation of foreign goods as the local craft industry produces goods that the local market is used to.
  5. The revenue generated by the craftsmen helps to enhance their standard of living and the government benefits from it through taxation.
  6. The arts and craft industry provides alternative employment for farmers during farm off-season.

 

Problems of Local Craft Industry

Although, the arts and craft industry is of immense importance to locals in rural areas and the country at large, the industry is facing a number of problems. Such problems include:

  1. Lack of capital: This is a big draw back for the industry. Practitioners usually do not have capital to improve their technology among other things.
  2. Low level of production: Due to lack of capital, craftsmen operate at a very small scale. Their production line is not mechanized hence they cannot mass- produce.
  3. Obsolete technology: This is used by practitioners who inherit the method of production from generations before them. These are traditional and inefficient methods when compared with modern methods of production, because there is usually no research carried out to improve the technology of the local crafts industry.
  4. Lack of access to capital or funds: The majority of local craft practitioners are relatively poor, live in rural areas, and with no formal education; hence, they find it difficult to secure funds from banks and other financial institutions.
  5. Lack of government support: The government has not shown enough political will to develop the arts and craft industry; probably due to the fact that its percentage contribution to the national Gross Domestic Product (GDP) is insignificant when compared to petroleum.
  6. Transportation is a problem to entrepreneurs in the industry: The majority of these enterprises are located in rural and sometimes remote locations. This hampers the transportation of products to the market.
  7. Low demand: The demand for local arts and craft is very low, as most Nigerians, particularly, the well – to – do in society, prefer foreign – made products. This attitude has greatly affected the demand for and growth of the local arts and crafts industry in the country. Foreign tourists are important buyers of arts and crafts made in the country.

 

Modern Manufacturing

Modern manufacturing concerns the processing of raw materials into finished products. Modern manufacturing is capital intensive and uses mainly machines in place of manual labour in the production process. It is based in urban centres with large population and market with high purchasing power for finished products.

 

General Characteristics of Modern Manufacturing Industries in Nigeria

There are some characteristics that are common to the manufacturing sector in Nigeria:

  1. Small scale: The majority of the industries are small scale when compared with those in the developed countries of Europe and the Americas. There are however some industries that can be classified as medium scale industries, for example, Nigerian Breweries Plc and Nigerian Textiles Limited.
  2. Capacity underutilization: Most industries in Nigeria are producing far below the installed production capacity. This has been caused by poor infrastructure and facilities for production, in particular, poor and inadequate electricity supply. This has substantially raised the cost of production and consequently led to the closure of many industries and the underutilization of the production capacity of others. For example, Aladja Steel Rolling Company near Warri in Delta State, with an installed capacity of one million metric tonnes of liquid steel per annum, has not produced up to 40 per cent of its installed capacity since its establishment. This factor has slowed down the anticipated rapid industrial development, with the ‘oil boom’ in the country in the early 1970’s. Government is now making concerted efforts to improve power supply which is a vital driving force of modern industry in Nigeria and the world over.
  3. Concentration of industries in few urban centres: Most manufacturing industries in the country are concentrated in the major urban centres such as Kano, Lagos, Ibadan, Abeokuta, Port Harcourt, Enugu, Kaduna, Aba and Onitsha (See Fig. 40.1). Manufacturing industries inthe country are found in clusters, which can be classified into SouthWest Zone (Lagos, Otta, Ibadan, Abeokuta, Oshogbo and Ilorin), North-Central Zone (Kano, Kaduna, Zaria, Gusau, Jos), SouthEast Zone (Enugu, Aba, Port Harcourt, Umuahia, Nkalagu, Calabar, Akwa), and the Edo-Delta (Benin, Sapele, Warri).
  4. Production of consumer goods: The majority of the manufacturing industries in Nigeria concentrate on the production of consumer goods, such as, cigarettes, beverages, drinks, flour, textiles, plastics and toiletries among many others.
  5. Part-processing of raw materials: Many industries do not process raw materials to their final stage but only process them in part before exporting them abroad for the final processing. For example, rubber latex is part processed into dry rubber crepe before export.
  6. Assembly plants: Automobile or car manufacturing industries in Nigeria are more of assembly plants, as over 90 per cent of the production components that are used in production are almost completed and imported from abroad, as ‘completely knocked down’ (CKD) components. Examples include, Anambra Motor Manufacturing Company (ANAMMCO) in Enugu, Enugu State; manufacturers of Mercedes brand of cars, buses and trucks; Peugeot Manufacturing Company of Nigeria in Kaduna; Volkswagen of Nigeria Limited in Lagos; Styer Motor Company in Bauchi, Bauchi State; Leyland Motors in Ibadan, Oyo State; and General Motors (GM) in Lagos. Apart from car assembly, many electronic and motorcycle assembly plants also have been established in cities, such as Lagos, Kano, Ibadan, and Otta.

 

 

Factors of Industrial Location in Nigeria

Industrial distribution in Nigeria is affected by a number of factors, which include: market, raw materials, power, labour, capital, transport facilities, government policy and social identification.

  1. Market: Most industries in Nigeria are located in urban centres and cities such as Lagos, Kano, Ibadan, and Onitsha, etc. with very large populations and home to people with relatively high income and purchasing power. These cities provide a ready market for the products of most of the industries.
  2. Raw materials: A number of industries that depend on heavy or perishable local raw materials are located at or near the sources of such raw materials. For example, the largest timber industry in Nigeria (A.T. &P) is located in Sapele, in the heart of the tropical rain forest of the country; Nkalagu, Ewekoro, Ukpila, and Ashaka cement industries are each located near a limestone deposit; a number of textile industries are located in Kaduna and Kano due to their closeness to the north central cotton growing zone. The Ajaokuta Iron and Steel mill is located in its present site due to the large deposit of iron ore in the area. The major oil refineries are located in Port Harcourt and Warri, and Liquefied Natural Gas Project (LNGP) in Onne and Brass, close to oil fields.
  3. Power: The availability of adequate and reliable power supply is a crucial factor in the location of industries. For, example, the Aluminium Smelting Company of Nigeria at Ikot Abasi, which needs a lot of power for its operations, is located close to gas power plants in Akwa Ibom State. Lagos State is supplied a large quantity of electricity by Igbin thermal power station and gas power stations around the Lagos area; hence the relatively high concentration of industries in Lagos State and its environs. The industrial development in Delta State is linked to the presence of gas power stations in Warri and Ughelli. It is important to note that the provision of adequate and sustained power supply is one of the major challenges to industrial development in Nigeria. The amount of power generated and supplied to the national network by the main public power company, Power Holding Company of Nigeria (PHCN) cannot meet both the domestic and industrial power needs of the country. It is for this reason that private investors and power companies are now being attracted into the power sector in order to fill the power supply gap.
  4. Labour: Labour, particularly, skilled labour is a vital factor in industrial production. The urban population and environment provide a larger proportion of this class of labour. As a result most industries in the country are located in urban areas where there is skilled and relatively cheap unskilled labour, caused by the high level of unemployment in most urban centres in Nigeria. Industries are rarely located in remote areas, e.g. the Sahelian region, which is harsh, unattractive and lacking in skilled labour.
  5. Capital: Industrial development is capital intensive. The purchase and building of industrial infrastructure requires enormous financial resources to accomplish. In Nigeria, the majority of industries are located in cities or areas where financial institutions exist and are willing to provide the needed capital, for example, Lagos, Port Harcourt, Kano, and Aba etc. where there are several financial institutions that are vested with the responsibility of providing capital (loans).
  6. Transportation: Transportation of raw materials and of finished products and goods to the market is very important, if the cycle of production is to be completed. In Nigeria, the poor state of roads, rail and water transportation is a major problem for industrialists. Hence,the majority of industries in Nigeria are located in urban areas and places where the transportation infrastructure, i.e ., ports, roads, rail and waterways, facilitate the movement of products to the local or international market.
  7. Government Policy: The location of some industries is politically motivated and the result of government policy or decision rather than the viability of such a location. For example, a petroleum refinery was established in Kaduna, instead of a location within the Niger Delta, where crude oil is drilled. Kaduna is not comparatively a viable location; its location was a political decision based on government policy at the time.
  8. Social Identification: Some established industrialists decide to locate industries in their home towns or villages. This decision most often is not based on careful consideration of the factors of industrial location, but essentially it is based on the desire of the industrialist to identify with his people and place of origin. For example, a renowned industrialist, who hails from Ughelli, located a brewery at Agbarha Otor, a village, near Ughelli, that has neither the market nor the infrastructure to support the industry.

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