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Manufacturing sector loses 2m jobs in 5 years

By Victor Ahiuma-Young

RECENTLY, the Chartered Institute of Personnel Management of Nigeria (CIPMN), organised a manufacturing sector human resource forum on “Maximimising the potentials of the Manufacturing sector in a recessing economy: The role of Human Resource Management” The forum which attracted eminent personalities from all walks of life, once again, brought to the fore the stark reality of the nation’s declining manufacturing sector and its negative consequences on employment generation among others.

Presenting the lead paper,  Human Resource Director of 7Up Plc, Mr. Femi Mokikan, lamented that the nation’s manufacturing sector had been witnessing steady  decline over the  years and called on government to rescue the sector from imminent collapse, arguing  that the future of the Nigerian economy hinged in the development of the manufacturing sector.

Mr. Mokikan posited that while the rest of the world started experiencing economic meltdown a year ago, the truth was that Nigeria was already melted before the global economic meltdown.

Mr. Femi Mokikan
Mr. Femi Mokikan

According to him: “What the Americans call loss of jobs we call redundancy. This has remained an on-going exercise in our lives for several years. What was the state of our infrastructure, power supply, security, access to and cost of funds, our educational system, etc. before the meltdown?

The global economic meltdown is an imported product, Made-in America. When the exporter, sorts itself out, the impact will reach us, just as the problem got to us. When that happens, will the power supply problem be solved?  What about the decayed and decaying infrastructure? Will the state of insecurity improve?

My view is that the global economic meltdown has only come to compound our problem. If there is a public offer from any company today how many Nigerians will with the same zeal of 2006/2007 go for it?”

According to him: The manufacturing sector in any economy is reputed to be the engine of growth and the ultimate pillar for sustainable growth and development..

He pointed out  that from information available,  the ‘historical evidence from the experiences of the developed world – France, Norway, Germany, Italy, Japan, USA, etc. show that the manufacturing sector  has played a critical role in their structural transformation from a primitive, low production and low income state to one that is dynamic, sustained and diverse’

Taking his economic perspective from three scenarios, he said: Scenario (1). A growing economy. A growing economy could be developed or developing.   Before the global economic meltdown, most economies of the world (except in the poorest  economies) could be said to be growing.  Directionally, the key economic indicators were moving upward – GDP, employment, income, etc. Scenario 2.

This describes a stable economy in which there is relative stability and equilibrium.  GDP, employment, income etc remain at fairly same level over many years. Scenario 3. This describes an economy that is on a downward slope.  Every economic indicator is declining.  GDP, employment, income etc.  As these are declining, poverty is rising and the quality of life is dropping.

Scenario 3 is the economy in which our manufacturing sector is operating in.   The trend started long before the global economic meltdown, unfortunately there is nothing to suggest that the trend will be arrested and reversed any soon.  The three tables below provide us a very disturbing graphic meaning of what  we are confronted with in the manufacturing sector.”

Steady job loses
Illustrating with the statices from the Manufacturing Association of Nigeria (MAN), review between 2002 and 2007, the 7UP Human Resource Director, said employment dropped from 2,841,083 in 2002     to 1,027,799 in 2007.

According to him: “The Food, Beverage and Tobacco Sector in 2002,  generated 372,209. In 2003,  it generated 322,630. In 2004,  it generated 254,549. In 2005,  it generated 245,678. In 2006,  it generated 273,728 and in 2007, generated 274,690. The Textile Append and Footwear Sector in 2002,  generated 80,392. In 2003,  it generated 88,088 while in 2004,  it generated 574,340. In 2005, it generated 40,430. In 2006,  it generated 37,171 and in 2007 it generated 39,968. For the Wood and Wood Products,  in 2002, the sector generated 165,814. In 2003,  it generated 166,892. It generated 136,053 in 2004. While in 2005,  it generated 89,793, in 2006,  it generated 35,207 and in 2007 it generated 62,543.

The Pulp, Paper and Publishing Sector generated 152,863 in 2002. In 2003 it generated 128,172. While in 2004 it generated 200,845. In 2005 it generated 40,337. In 2006 it generated 48,950 and in 2007 46,429 was generated. The Chemical and Pharmaceutical Sector generated 142,896 in 2002. In 2003 it generated 122,468. In 2004 it generated 65,581. While in2005 it generated 56,360. In 2006 it generated 67,563. And in 2007 72,253 was generated.”

“The Non- Metallic Mineral Products generated 94,038 in2002. In 2003 it generated 101,181. In 2004 it generated 104,611. While in 2005 it generated 160,660. In 2006 it generated 130,695 and in 2007 it generated 147,517. The Domestic/ Industrial, Plastic, rubber and Foam Sector generated 148,302 in 2002. In 2003 it generated 158,066. It generated 106,785 in 2004. While in 2005 it generated 150,750. In 2006 it generated 156,005 and in 2007 it generated 163,419. The Electrical and Electronics Sector generated a total of 76,000 in 2002. In 2003 it generated 69,318. In 2004 it generated 87,325. While in 2005 90,340 was generated. It generated 76,955 in 2006 and in 2007 it generated 88,841.

The Basic Metal, Iron and Steel Sector generated the sum of 87,149 in 2002. In 2003 it generated 82,181. In 2004 it generated 80,897. While in 2005 it generated 110,890. In 2006 it generated 116,206 and in 2007 it generated 99,408.

Motor Vehicles and Miscellaneous Assembly generated 75,756 in 2002. And in 2003 it generated 71,561. In 2004 it generated 78,330. While in 2005 it generated 55,468. In 2006 it generated 63,380 and in 2007 a total sum of 32,631 was generated.”

Mr. Mokikan lamented that while the manufacturing sector in 2002, generated  2,841,083 jobs, from . 2003, employment generation declined to  2,716,244, in 2004, it fell to 1,172,410, 2005, to 1,043,982,  2006, to 1,005,861 and in 2007, to 1,027,799.

However, for the 7UP Human Resource Director, the potentials of the manufacturing sector in creating value is indeed what confers on it its other name, the real sector. Raw materials remain raw materials and offer little value until transformed into finished or semi-finished products.  Maize/wheat, rubber, cotton, groundnut, iron ore, tin, cola nuts, trees, leaves, roots. leather, etc. will all remain what they are without manufacturing.

It is manufacturing that turns these into different finished products that are usable or consumable to sustain a high standard of living – vehicles, planes, wrist watches, drugs, wearing apparel, drinks, etc. It is the potential here that led to the concept of “value chain” through which it is easy to trace the movement from stage to stage and know what value is added at each stage.”


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