A HISTORICAL APPRAISAL OF POLICIES AND INSTITUTIONAL FRAMEWORKS FOR INDUSTRIAL DEVELOPMENT IN NIGERIA, 1929-1999
BOGE, Faruq Idowu, Ph.D.
Department of History and International Studies
Lagos State University, Ojo, Lagos State, Nigeria
Email: bogefaruq@yahoo.com
Abstract
The nexus between industrialisation and economic development is inextricable. There is no doubt that economic development is a project in continuity, but the industrial undertone for this continuity cannot be underestimated. This is because a majorindex for economic development is industrialisation which is usually attained through the instrumentality of carefully orchestrated policies and strategies. Within the confine of industrialisation strategies in Nigeria, the activities of various institutional frameworks are noticeable. The origin of Nigeria’s industrial development policies and programmes could be traced to the colonial era, though the colonial industrial development strategies were tailored towards sustaining the economic exploitation of the country. Since independence in 1960 however, successive administrations in Nigeria have initiated some strategies towards industrial development which have impacted on the nation’s economic development strategies. From the foregoing assertions, this paper seeks to interrogate some aspects of theindustrial development trajectories in Nigeria. It specifically concentrates on the contributions of, and the pitfalls faced by selected institutional frameworks for industrial development in Nigeria. While adopting a qualitative research methodology and historical approach, the paper submits that the activities of some institutions for industrial development in Nigeria have contributed to industrial and general economic development in Nigeria though with some observable challenges.
Keywords: Institutional Frameworks, Industrial Development, Economic Development, Nigeria
Introduction
The importance of the industrial sector as a catalyst foreconomic development and diversification cannot be overemphasised (Onimode and Oni, 1975).The quest for industrialisation is therefore ubiquitous and nations across the globehave often initiatedpolicies, plans, and strategies towards engendering industrial development.The examples of the United States, Germany, China, the Asian Tigers, and many of the advanced countries of the world reveal that well-orchestrated policies and programmes were designed to entrench industrial development. In this same vein, third world countries such as Nigeria have adopted series of policies, incentives, and schemes to promote industrialisation.Policies such as import substitution, export promotion, indigenisation, nationalisation, commercialisation, and privatisation, among others were introduced by different administrations in post-colonial Nigeria to promote industrial development (Asiodu, 1975). However, the conduits by which these policies are implemented (in most cases) are through the institutional frameworks that were established. Some of the institutional frameworks for industrial development in Nigeria include the Federal Institute for Industrial Research, Oshodi (FIIRO), the Nigeria Industrial Development Bank (NIDB) now the Bank of Industry (BOI), the Standard Organisation of Nigeria (SON), the Nigeria Bank for Commerce and Industry (NBCI), the Industrial Training Fund (ITF), and the National Economic Reconstruction Fund (NERFUND) among others.
Though there were efforts by the colonial government towards initiating industrial development in Nigeria, more proactive policies, incentives, and frameworks were initiated by the post-colonial administrations. While some of the policies and frameworks had morphed in terms of nomenclature and responsibilities, others have become moribund owning to continuous change in government and policy somersaults.Apart from inconsistencies regarding policies formulation and implementation, problems such as corruption, nepotism, and mono-economic structure has continued to bedevil the actualisation of the objectives for which many of the institutional frameworks in Nigeria were established. The study endeavours to historicise the formation and appraise the activities, achievements, and challenges facing some of the industrial development institutions in Nigeria. The paper is divided into five sections and this introductory part presents a brief background to the objectives and basic arguments. The other four sections focus on issues such as conceptual clarifications, historicizing the Nigeria’s industrial development strategies, appraising the achievements and challenges of Nigeria’s institutions for industrial development, and summary of the basic discoveries and arguments of the paper.
Conceptual Discourse: Economic Development, Industrialisation, Institutional Framework
The concept of “development” is not only ubiquitous but has received a quantum of scholarly attentions and interpretations. Scholars of different academic and intellectual backgrounds have therefore examined the concept from diverse perspectives. To this extent, different typologies of developmentsuch as social development, human development, socio-economic development, sustainable development, political development, underdevelopment, and economic development among others have beenexamined by scholars. Though these typologies of development are interlinked, and interwoven, economic development seems to be the most paramount because there is always economic undertone to every change and transformation in a society. Economic development is largely projected by the materialist school of thought whose conception of development is primarily based on economic power andindications, both at the levels of individuals, organisations, and countries.This school considers that development in a country could be measured using parameters such as the volume of productivity of investment in a society, sustained increase in per capital income, and continuous economic growth among others (Dahl and Hjork, 1984: 165-185). The school posits that a continuous expansion in the economy would ultimately lead to a spread of social welfare to the people. The materialist school has however been criticised by other schools of thought, particularly the sociological school which acclaimed that development in the sense of societal improvement must not be strictly equated with economic growth (Gasper, 2004). Crocker (1998) specifically maintains that development is a beneficial change which alleviates human misery and environmental degradation. The Wily Brandt Report of 1980 presents a broader conception of development when it refers to it as a desirable social and economic progress in which the living conditions of people are improved. The Report further accentuated the economic aspects of development by claiming that it involves a profound transformation of a society for whichindustrialisation is essential.
Since the industrial revolution which started in the mid-eighteenth-century Europe, the concept of industrialisation has assumed prominence in the lexicon of scholars of economic development and related disciplines. Industrialisation has been seen as a major instrument for measuring the level of development and unlocking development in the advanced, less-developed, developing, and even the underdeveloped countries (Teriba and Kayode, 1977:4-5). Even some scholars that accentuate the place of agriculture in economic development still make adequate references to industrial agriculture and mechanical farming which are integral parts of the industrialisation processes.In brevity, industrialisation can be described as the application of science and technology to various economic activities for efficiency and mass production. It is basically the transformation of agrarian economy and commerce to theindustry which requires the use of power-driven machineries and the development of factory organisation (Alade, 2005:5).Industrialisation is an important aspect of a wider modernisation process where social change and economic development are closely related with the development of large-scale energy and mental production. Furthermore, industrialisation encompasses the extensive organisation of an economy for the purpose of manufacturing.The industrialisation processes had passed through different stages and the current fourth industrial revolution is majorly centred on information technology and the digitalisation of the economy and other facets of human live. Nigeria, like many other African and colonised countries of the world, began to adopt actual industrial development strategies and policies during the 1960s immediately after independence. This was to manifest a clear departure from the traditional colonial economic pattern of supplying raw materials to the advanced metropolitan countries and importation of manufactured products in return, a situation which allowed for the perpetuation of economic dependence (Teriba and Kayode, 1977:4-5). Towards achieving this, various policies, incentives, and schemes were formulated to promote industrialisation in Nigeria. Many of these are implemented using various institutional frameworks.
Institution as a concept can be looked at from different perspectives; sociological, legal, political etc. It is a system by which the collective efforts of individuals for carrying out certain functions are implemented. In sociological terms, family and schools are typical examples of institutions where people are groomed and integrated into the society. In addition, some sociologists have identified five primary social institutions including the family, economy, religion, education, and the state (www.sociologyguide.com). From the legal perspective, institution refers to man-made rules that govern human behaviours and structure interactions in a society. It is composed of formal and informal rules created by human being such as statute law, common law, conventions, traditions, and norms (Nataliu, 2007). For the rules to be effectively implemented and to achieve set objectives, however, institutional frameworks which are the enforcement mechanisms are always formulated. Therefore, institutional frameworks are the mechanism through which laws, policies and programmes are implemented towards the achievement of certain objectives. Institutional policies and programmes such as import substitution, export promotion, indigenisation, nationalisation, commercialisation, and privatisation among others were formulated by administrations in Nigeria for industrial development. For the implementation of these policies, institutional frameworks such as the Federal Institute of Industrial Research Oshodi (FIIRO), Standard Organisation of Nigeria (SON), and the Bank of Industry (BOI) were established.
Nigeria’s Industrial Development Strategies in Historical Perspectives
The history of industrial policies and incentives in Nigeria is traced to the colonial period. Though the colonial economy was practically disincentive to actual industrial development in Nigeria from inception, some policieswere initiated during the twilight of colonial rule that seemed to havelaid the foundation for post-colonial industrial development in the country. From the inception, there was the British Development Act of 1929 which marked the first stage of colonial industrialisation in Nigeria (Okeotiki, 2000:292). The second stage of the colonial industrialisation policies in Nigeria was the introduction of the British Colonial Development and Welfare Act of 1945. This empowered the Secretary of State for the Colonies, in liaison with the British Treasury, to initiate schemes for the development of resources within the colonies and the promotion of the peoples’ welfare (Njoku, 2014:264). The Act gave aTen-Year Plan of Development and Welfare for Nigeria(1946-1956) and was designed to make provision for physical facilities necessary for the improvement of the country (Hellenier, 1966:333).In terms of specific sectors, these policies focused on concentrating public resources on the provision of social services, transportation, and communication. It was assumed that these facilities would induce private entrepreneurs to invest in industry and agriculture that would produce jobs, goods and services, and modern skills and production techniques (i.e., technological capability). Thus, the private sector was entrusted with the task of running Direct Productive Activities (DPAs) while the government concentrated on the provision of physical and social infrastructure (Teriba and Kayode, 1977). The first Ten Year Plan however came to its abrupt end in 1954 and the second Development Plan (1955-1960) was introduced in 1955. It was a slight modification in the colonial government’s approach to development. With this, the government began to participate directly in productive activities by establishing industrial and agricultural enterprises. However, the two plans failed to galvanise industrialisation because the major priority was on social services and facilities and agricultural goods for export which was generating foreign exchange for the government (Ayo, 1988:1-5).For instances, while the improvement of water supply and health services was allocated as much as 25 percent, the industrial sector was allocated only 6 percent in the first colonial development plan. In the same vein, while the transport sector was allotted a wholesome of 39 percent during the second colonial development plan period, only 9 percent was given to industry and agriculture (Olaloku et al, 1979:139).
Another method employed by the colonial government towards spurring industrialisation in Nigeria during the twilight of colonialism was inducement of foreign investments for industrial production. Campaigns were therefore mounted in Europe to advertise the opportunities in Nigeria to European industrialists. A few incentives such as the Aid to Pioneer Industries (1952) and the Industrial Development (Income Tax Relief) Ordinance (1958) were also announced to attract these industrialists (Ekundayo, 1960:295).Other incentives included security guarantees on foreign investments and the freedom to repatriate their capital anytime. These incentives yielded little result as the economywas largely dominated by the European trading companies like the Royal Niger Company (UAC), CFAO, John Holt and Co., John Walken and Co., W. B. Maclver and Co., G.B. Ollivant, PatterssonZachonics, and Miller Brothers among others whose primary interests were importation of manufactured products thereby suppressing actual industrialisation in Nigeria. As shown by Acemoglu and Robinson (2012), the colonial government in Nigeria gave some concentration to the extractive industries. Therefore, the limited industrial centres that were established by the colonial government were around the extractive industries including the tin mines in Jos, coal mines in Enugu, crude oil exploration in Warri and Port Harcourt, and the timber and rubber extraction in Sapele (Ekundayo, 1973). To this extent, only 5 percent of the Gross Domestic Product (GDP) in Nigeria was attributed to manufacturing and mining in 1958. The percentage only increased to 10 percent in 1968 because of crude oil exploration in commercial quantities within the Niger Delta area of the country (Ekundayo, 1973).
Njoku (2014:264) identifies tax incentives as part of the efforts to spur industrialisation during the colonial period. These include the Income Tax (Amendment) Ordinance of 1952 which allowed both the public and private companies to write off from profits for the purpose of computing taxable income. There was also the Industrial Development (Import Duties Relief) Ordinance of 1957 which authorised full or partial repayment of duty on imported raw or processed materials required in the manufacturing or processing of goods or the provision of essential services. The Industrial Development (Income Tax Relief) Ordinance of 1958 and the Custom Duty Ordinance of 1958 which imposed prohibitively high duties on imported products which are dumped in Nigeria. Furthermore, the Lyttleton Constitution of 1954 also contributed to the foundation of industrialisation in Nigeria. To this extent, industrial development and scientific research were included in the concurrent legislative list which gave the regional governments the opportunity to carry out independent industrial development policies and programmes. In 1955 the National Economic Council (NEC) was created, and this made each regional government responsible for industrialisation within its domain. In 1956, the Institute of Applied Industrial Research was created under the Federal Department of Commerce and Industry. The Institute was meant to engage in research into Nigeria’s economic resources and potentials for industrial development. Findings of the Institute were made available to the regional governments and private investors. Owing to the inclusion of industrial development in the concurrent legislative list, the regional governments were able to initiate series of policies towards industrial development. The Western Region was able to establish industrial estates in Apapa and Ikejawhich assisted in suppressing the encumbrances with respect to acquiring land for industrial activities by investors. The Western Nigeria Development Corporation promoted the establishment of manufacturing companies such as the Guinness, Dunlop and Michelin, Cadbury within the industrial estates (Ajibade, 2015:28). Other industries that were created in the western region include Ibadan Sawmill and Timber Export (1942), Abi Publishing Press (1946), Ajenlokoto Printing Works (1946), Odutola Tyre and Rubber Company (1951), Odutola Retreating Company Limited (1956), Nigeria-Foam Rubber Company (1958), Nigerian Poly-plastic Firm Company (1958), The Nigerian Plastics Company Limited (NIPOL, 1957), Tella Juice Industry (1958), and Lafia Canning Factory (1954) (Ihuoma, 2019:453-469).
Nigeria’s Industrial development attempts during colonial rule became practically nebulous, particularly as it was anathema to the commercial and trading activities of the colonial economy save for the tangible efforts at the regional level. At independence therefore, governments at the subnational and national levels made concerted efforts to introduce new industrial development strategies and policies in Nigeria.Earliest among the industrialisation strategy in post-colonial Nigeria was the Importation Substitution Industrialisation (ISI) strategywhich was first adopted in the country in 1961(Ayodeji, 1979). ISI is an economic development policy that advocates replacing importation of goods and services with domestic production. It is geared towards reducing dependency on foreign products and importation by spurring local productions. In precise term, Clarence Zuvekas (1979:73) sees ISI as a government strategy that replaces agricultural or industrial imports to encourage local production for local consumption and for exports.In the long run, ISI is meant to generate employment, reduce foreign exchange demand, stimulate innovation, and promote self-reliance in critical sectors of the economy. The strategy emerged prominent in the 1930s when the developing countries in global south which richly endowed with natural resources such as minerals and agricultural produce began to search for alternatives for importation of manufactured products. It was first adopted by the Latin American countries from the 1930s and many Asian and African countries started adopting the model immediately after independence. Developing economy with larger markets such as India, Brazil, Argentina, Mexico, Chile, Uruguay, and Venezuela made some successes owing to the implementation of ISI (Zuvekas, 1979:93).Specifically, the arguments for adoption of ISI in Nigeria includedpromoting domestic industrialisation, to generating balance of payment, promoting foreign exchange,and reducing unemployment. But unfortunately, ISI failed to put Nigeria on the path of rapid industrialisation.
Adejugbe (1980:232-242) asserted that the primary reason for this failure was because the import substitution industries depended majorly on imported raw materials and thus even worsened Nigeria’s balance of payment problems that it was designed to resolve. There was no serious attempt to integrate local technology and manpower to back up the ISI strategy and relying on foreign technology and raw materials to produce comparatively disadvantaged products was a policy that was doomed to fail. In another vein, Afonja (1994:52)identified other problems which confronted the actualisation of the goals of the Nigeria’s ISI strategy including the fact that the industries created through the strategy were very feeble to withstand international competitions, the country’s inelastic demand for imports, smuggling activities owing to large holes in the country’s borders, inability to produce enough that would meet the expansive Nigeria’s market, and the consumption of the local products by other countries within the ECOWAS region. In the opinion of Duru and Agba (2005:49-75), the ISI failed in Nigeria because the technologies needed for the new industries were capital intensive. They further asserted that the location of theISI industries was restricted to only seven cities of Lagos, Kaduna, Jos, Port Harcourt, Kano, Enugu, and Ibadan which resulted into lack of forward and backward linkages fundamental for Nigeria’s industrial development.Oyejide (1975) also captured the problematic nature of the Nigeria’s ISI strategy when he argued that the growth of the domestic industries was tied to the import of intermediate and capital goods. Owing to this, it was impossible to restrict such importation without obstructing the growth of the domestic industries. Thus, the ISI strategy increased the importation of products like machinery and building materials, management services, skilled labour, and technology transfer.
Another attempt at enshrining industrial development in post-colonial Nigeria was the introduction of the National Development Plans. The first of these national development plans was introduced in 1962 and was scheduled to last between 1962 and 1968. The industrial sector of the economy was prioritised in the plan as about 14 percent of the money earmarked for the development was given to industrialisation. Two major industrial subsectors including iron and steel and petroleum refinery were given priorities. Industrial projects such as the Port Harcourt Oil Refinery, the Nigerian Security and Minting plant, the Jeba Paper Mill, and the Bacita Sugar Mill among others were completed during the national plan period. But despite these attempts,less than one-third of the N180 million earmarked for industry was utilized. Berger (1975:75-92) asserted that one of the reasons for the failure of the first national development plan was the lack of coordination between the regions and the central planning. Secondly, the outbreak of the Nigerian Civil War also disrupted the plan as many infrastructural and industrial facilities located around the war zones were destroyed.
The Second National Development Plan was conceived and billed to last between 1970 and 1974. It was largely influenced by the major windfall in the crude oil proceeds which put abundant wealth in the purse of the government. Specifically, the plan focused at reconstructing the industrial facilities that were damaged during the Nigerian Civil War. As a result, the cement factories at Nkalagu and Calabar were repaired and expanded during the plan period. There was also a phenomenal increase in public sector investments such as the expansion of the Kaduna and Port Harcourt refineries, the construction of petro-chemical plants at Eleme, the construction of Iron and Steel Complexes at Ajaokuta and Aladja, and the construction of Rolling Mills at Oshogbo and Jos among others (Ayo, 1988:1-12).However, the Second National Development Plan failed in some respects to achieve its set objectives majorly because of implementation. It therefore neither broadened the base of Nigeria’s national economy nor raised the proportion of indigenous ownership of industrial establishments. The forward and backward linkages between agricultural and industrial sectors were hindered as the oil boom caused neglect in the promotion of agriculture and the country gradually snowballed into a mono-culture economy.In fact, the relegation of agriculture into the background created a scarcity of consumer goods and the country slide into importation of foods killing the industrialisation drive of the country.
The Third National Development Plan, which was scheduled for 1975-1980, was specifically designed to address the apparent structural bottlenecks that prevented the optimum performance of the manufacturing sector. It was also structured at enhancing the diversification of Nigeria’s industrial base as well as the development of an export-based economy, particularly after the crash in the global oil market which brought a drastic decline in the country’s foreign reserves.Though the manufacturing sector recorded an increasing rate of 8 percent compared to agriculture which recorded a negative growth of 0.1 percent, the Third National Development Plan was constrained in some respects. For instance, the shortage of foreign reserves eventually led to scarcity of essential raw materials. This forced some of the manufacturing organisations to reduce their operations and closure in some cases leading to retrenchment and unemployment.
The Fourth National Development Plan was launched in 1981 to cover the period between 1981 and 1985. The manufacturing sector constituted one of the major priorities of the plan as it received about 21 percent of the anticipated total expenditures (Ayo, 1988:15). Theperformance of the economy during the plan period was however generally poor and many of the projects slated for execution were underfunded because of the financial crisis from the sudden slump in the oil markets. Another major impediment to the goals of industrial development during the plan period was widespread corruption. Thus, in April 1983, about 107 factories in the country had to close for up to eight weeks and some of the factories had to reduce to three days a week activity paving way for underemployment and unemployment. By the end of August 1983, 49 out of the 73 industries that were operating under the Manufacturers Association of Nigeria (MAN) had closed (Ikpese et al, www.eurojournals.com).
Against the background of the poor performance of the Fourth National Development Plan, the Fifth National Development Plan was initiated. One of the aims of the new plan was to promote the domestic production of the raw materials for local industries to reduce the import contents of the locally manufactured goods. In another vein, the plan sought to revitalise the agricultural sector to promote self-sufficiency in food production. Therefore, the economy was restructured in favour of the productive sector, particularly manufacturing and agriculture. In addition, the agricultural sector was expected to feed the local industries with the needed raw materials.In fact, the government reconsidered the provisions of the Nigeria Enterprise Promotion Decree to create avenue for the foreign investors to own up to 80 percent of large farm projects (Ayo, 1988).However, the Fifth National Development Plan was constrained as the economy continued to decline owning to the oil glut. It was the poor economic situation that prompted the country to later adopt the Structural Adjustment Programme (SAP) which had some implications on the country’s industrialisation drive.
Basically, SAP advocated for economic deregulation and liberalisation. Isola (2005:274-276) outlined that the key objectives with respect to industrial policy included encouraging the development of local raw materials rather than over reliant on importation, developing local technology, maximising the growth in the value-added of manufacturing activities, promoting export-oriented industries in order to generate employment, and removal of constraints for industrial development including infrastructural deficient, inadequate manpower, and administrative bottlenecks. Though there were public resistance against the introduction of SAP, the government rammed through as it became a criterion for eligibility to negotiate debt rescheduling with the Paris Club of Creditors. The import licensing regime and commodity boards were removed, the foreign exchange market was liberalised, the subsidy regimes were reduced, and there was privatisation of many aspects of the economy because of SAP. Critics of SAP argued that it promoted de-industrialisation in Nigeria. For instance, Adejugbe (1995:488-496) contended that the downward trend towards industrial development in Nigeria was a result of anti-industrial programmes of SAP including devaluation of the Naira and reduction in government expenditure.Stein (1992:83-95) on the other hand further contended that SAP caused the industrial production to stagnate and even erode important part of the industrial base for future growth.It was further asserted that the market driven reforms under SAP put a lot of pressures on the industrial sector leading to retrenchment of workers. It was reported that employment in the manufacturing sector dropped by 6 percent between 1987 and 1989 in Nigeria (Manufacturing Association of Nigeria).
In 1996 alone, about 115 member-companies of MAN stopped operations. Similarly, between 1997 and 1999, 130 member-companies of MAN could no longer operate due to lack of working capital and dumping in the market. The textile industry recorded the highest casualties as it had 43 among the 130 companies that stopped operations. In addition, the major automobile companies in Nigeria such as Peugeot Automobile Company of Nigeria (PAN) and Volkswagen of Nigeria (VON) folded up (Mkandanwire, 1995:5-31). VON was operating at 9 percent level of its capacity by the second half of 1987.In fact, most of the manufacturing companies were converted to warehouses for refilling and packaging imported goods. A general implication of SAP is the increase in production as the high cost of borrowing due to high interest rate naturally increased the cost of production.
The Privatisation Policy which was introduced by Decree No. 25 of July 1988 had some elements for the promotion of industrialisation in Nigeria. It was initiated to savage the economic doldrums which the country was enmeshed arising from the very poor performances of the government owned industrial outlets (Ogunleye, 1999).The adoption of the SAP agenda also made it incumbent on the country to adopt privatisation. In addition, the Bureau of Public Enterprises Act was promulgated in 1993 to lean credence to the privatisation process in Nigeria. Further to the Bureau of Public Enterprises Act, the Federal Government of Nigeria created the National Council on Privatisation in 1999.Several factors hindered the privatisation policy from achieving set objectives including aspects of industrialisation in Nigeria. Among the encumbrances was the resentment towards the policy from a cross section of the country, particularly the Labour Union which organised series of protests and strikes to frustrate the policy. Another problem was lack of sincerity of purpose from the government who connived with individuals to sell public enterprises to their private holdings, family members, and cronies. Proceeds from the sales of the public enterprises were also diverted to private purse. For some of these industrial policies to be implemented, several institutional frameworks were initiated.
Institutional Frameworks for Industrial Development in Nigeria
Various institutional frameworkswere established to enhance the industrial development policies, incentives, programmes, and strategies in Nigeria. The history of these institutional mechanisms for industrial development is also traced to the colonial period. The colonial authority created development finance institutions which were charged with responsibility of giving long-term loan to the industrial and agricultural sectors. In 1959, the Investment Company of Nigeria Limited was incorporated to assist industrial and agricultural enterprises in Nigeria. The company was meant to provide funds for development, modernisation, and expansion. In addition, the company attracted expatriate investment and encouraged the growth of a local stock and share market in Nigeria. The company did not perform optimally majorly because of financial paucity and problem of duplication of functions with related organisations.
The idea of the Federal Institute of Industrial Research, Oshodi (FIIRO) was conceived in 1953 as a follow-up to the visit of economic mission of the World Bank to Nigeria. One of the economic mission’s observations was that the industrial research activities in Nigeria were uncoordinated and recommended that an Institute of Applied Technical Research should be created. The institutewas therefore created in 1956 under the ministry of commerce and industry, and the name was changed to Federal Institute of Industrial Research in 1958 located at Oshodi area of Lagos State, Nigeria. It was primarily set up to engage into research development and to ensure the conservation of Nigeria’s foreign exchange earnings by reducing dependency on foreign goods. FIIRO was specifically to develop local substitutes from locally available raw materials. It was meant to improve the indigenous traditional techniques of food production which used to be labour intensive, time consuming, and energy sapping. The institute also engage in the fabrication of machinery and equipment, casting of iron and aluminium, and production of spare parts for machineries. It also engaged in the preparation, publication, and dissemination of useful information to industries and research organisation.
The Nigeria Industrial Development Bank (NIDB) was another institutional framework for industrial development in Nigeria that was created in 1964. The main objective of the bank was to assist enterprises that were into industrial and agricultural activities in the country with financial and technical back up. The Central Bank of Nigeria and the Federal Ministry of Industry were the supervisory agency of the bank from inception. However, the bank collapsed during the first decade of its establishment due to various factors including mismanagement, bad loans, cronyism, support for unviable projects, and politically motivated appointment among others (Agba, 2005:398-402). In another vein, the Nigeria Bank of Commerce and Industry (NBCI) was established in 1973 to provide support to the indigenisation policy of the Federal Government. It was specifically meant to promote the development of small and medium size enterprises (SMEs) in Nigeria. The bank was able to provide long-term investment financing and equity funds to the SMEs. Like the NIDB, the bank failed because of issues relating to mismanagement, corruption, nepotism, and others (Nwankwo, 1977:100). In addition, the National Economic Reconstruction Fund (NERFUND) was established by Decree 2 of 1991 to join other selected financial institutions to increase the availability of credit facilities to small scale industries in Nigeria. Loans from NERFUND were expected to attract low rate of interests compared to commercial banks. The fund was basically an outreach programme which sought to empower the banking sector through the provision of small and medium scale industrial loans; these were done through the commercial and merchant banks. However, the scheme became distressed as many beneficiaries were unable to service their loans owing to factors such as unstable macroeconomic framework, misappropriation of funds by the beneficiaries, and political instability (Ajakaiye, 1995).
In 2000, the Bank of Industry (BOI) was instituted to promote the growth and development of Small and Medium Scale Industries in Nigeria. It was a merger of the previous financial institutions including the NIDB, NBCI, and NERFUND. The merger was targeted at an effective harmonisation of the resources of these previous institutions to galvanise industrial development in Nigeria.The establishment of BOI was an incentive for industrial development in Nigeria. The bank started with an initial capital of N50 billion and through this it was expected to transform the industrial sector in Nigeria and integrate the country into the global economy. It was meant to provide cheap financing and business support services to new industries to attain the modern capabilities to produce goods that are attractive to both domestic and external markets. It was also designed to assist in the resuscitation of ailing industries and the establishment of new ones in the new democratic dispensation in Nigeria. The Raw Materials Research and Development Council (RMRDC) was an institutional framework for industrial development in Nigeria. It was housed by the Federal Ministry of Science and Technology as the umbrella for all efforts by both the public and private sectors in the research and development of local input.
The Standard Organisation of Nigeria (SON) is the statutory body responsible for the standardisation and quality control in the Nigerian economy. In this connection, it was expected to prepare standards for products and processes, ensure compliance with government policies on standardisation and quality of products in Nigeria, establish a quality assurance system including certification of factories products and laboratories, maintain reference standards for calibration and verification of measures and measuring instruments and co-operate with corresponding national and international organisations with a view to securing uniformity in standard specifications (https://www.iso.org). The organisation was granted the semi-autonomy with which it would henceforth strictly enforce and seal up factories which produce sub-standard goods.SON was established by an Enabling Act Number 56 of December 1971 and the Standard Organisation of Nigeria Cap 412 of the laws of the Federal Republic of Nigeria. The act has had three amendments including Act Number 20 of 1976, Act Number 32 of 1984, and Act Number 18 of 1999. The acts were amended to promote efficiency within the organisation in line with global practices.The governing body for the Organisationwas the Nigerian Standards Council which is the policy making body that supervisesits administration and financial management. The Director General is the executive head of the organisation and hasthe responsibilities, especially the day-to-day administration of the organisation within the broad guidelines approved by the council.
The Nigerian Export Promotion Council (NEPC) is another institutional framework for industrial development and general economic development in Nigeria. It was established as the apex institution for the promotion, development, and diversification of exports(https://www.nepc.gov.ng). Thus, it has for long assisted in coordinating and harmonising export development and promotion activities in the country, taking the lead in all national exportpolicies and programmes. It has coordinated interfaces with international trade agencies on capacity building in Nigeria’s export trade sector. In addition, the Council had focused on diversifying the productive base of the economy away from oil and foster market-oriented and private sector driven economy. The Council was established through the promulgation of the Nigerian Export Promotion Council Decree No. 26 of 1976 and was formally implemented in March 1977. The act was amended on fouroccasions through Decree No. 72 of 1979, Decree No. 14 of 1984, Decree No. 18 of 1986, and Decree No. 64 and 65 of 1992.At the helm of the Council’s administration is the Executive Director supported by directorates and departments.
The Nigeria Export-Import Bank (NEXIM) was created in 1991 as an Export Credit Agency (ECA) with share capital of fifty million naira (https://www.neximbank.com.ng). NEXIM focuses on the development and expansion of the non-oil sectors of the Nigerian economy to reduce the country’s over-reliance on oil exports. It was established by Act 38 of 1991 from the earlier Guarantee and Insurance Corporation Act 15 of 1988. NEXIM was placed under the joint supervision of the Federal Ministry of Finance and the Central Bank of Nigeria. It functions include the provision of export credit guarantee, provision of export credit insurance facilities to clients, provision of credit in local currency to clients in support of exports, establishment and management of funds connected with exports, and maintenance of a foreign exchange production fund for leading to exporters who need to import foreign inputs to facilitate export production.It also provides short-term and medium-term loans to Nigerian exporters and acts the government’s National Guarantor under ECOWAS inter-state Road Transit programme. It has a Chief Executive Officer at the helm of affairs.
Conclusion
The history of Nigeria’s industrialisation process is traced to the colonial rule when the European trading companies concentrated on the production of light industrial commodities such as soap, soft drinks, textiles, and confectioneries. Thereal effort during this period was towards the development of agricultural activities, particularly cash crops for raw materials. But towards the twilight of the colonial administration, there were attempts to concentrate on industrial development which achieved little success such as the establishment of light industries and assemblage of plants. It therefore became necessary, for the post-colonial administrations to make more concerted towards industrial development in Nigeria. Various industrial policies such as the Import Substitution Industrialisation (ISI), National Development Plans, Privatisation, Indigenisation, and Structural Adjustment Programme among others were introduced in Nigeria to give credence to industrial development.To successfully implement, give financial backings, and promote efficiency to the industrial policies, several institutional frameworks were established by the government including BOI, FIIRO, SON, NEPC, and NEXIM.Though with the policies and institutional frameworks some successes were recorded, industrialisation in Nigeria is yet to reach the standard expected of a country endowed with the enormous natural resources as Nigeria. Problems such as policy inconsistency, duplication of functions, poor implementation, corruption, nepotism, and political instability among others have impeded industrial development in Nigeria.
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