MANUFACTURING

Manufacturing

In 2003, manufacturing accounted for 4 percent of the GDP, down from 13
percent in 1982. Preindependence Nigeria, its large population
notwithstanding, had very little industrial development—a few tanneries and
oil-crushing mills that processed raw materials for export. During the
1950s and 1960s a few factories, including the first textile mills and
food-processing plants, opened to serve Nigerians. During the 1970s and
early 1980s industrial production increased rapidly, principally in
Lagos, Kaduna, Kano, and Port Harcourt. Factories also appeared in smaller,
peripheral cities such as Calabar, Bauchi, Katsina, Akure, and Jebba,
due largely to government policies encouraging decentralization
(although these policies sometimes ran counter to solid economic criteria).

Nigeria’s major manufactures are food and beverages, cigarettes,
textiles and clothing, soaps and detergents, footwear, wood products, motor
vehicles, chemical products, and metals. Smaller-scale manufacturing
businesses engage in weaving, leather making, pottery making, and
woodcarving. The smaller industries are often organized in craft guilds
involving particular families, who pass skills from generation to generation.

In an attempt to broaden Nigeria’s industrial base, the government has
invested heavily in joint ventures with private companies since the
early 1980s. The largest such project is the integrated steel complex at
Ajaokuta, built in 1983 at a cost of $4 billion. The government has also
invested heavily in petroleum refining, petrochemicals, fertilizers,
and implements for assembling automobiles and farm equipment. Government
policies have hampered industrial development by making it difficult
to obtain sufficient raw materials and spare parts. Partly as a result,
only a fraction of the country’s manufacturing capacity is currently
utilized. In the mid-1990s the government introduced a series of reforms,
including an allowance for greater foreign ownership in Nigerian
industries, a loosening of controls on foreign exchange.