Green dreams, old traps: Will Nigeria finally learn to compete?

Global production chains are reorganizing as countries race to develop green manufacturing capabilities. Nigeria’s engagement has focused on adopting technology: installing solar panels, importing EVs, setting net zero targets. Far less attention has gone to supplying the components the transition requires. China dominates that supply side, but it is still being contested. Mineral-rich developing countries […]

Global production chains are reorganizing as countries race to develop green manufacturing capabilities. Nigeria’s engagement has
focused on adopting technology: installing solar panels, importing EVs, setting net zero targets. Far less attention has gone to supplying the components the transition requires.
China dominates that supply side, but it is still being contested. Mineral-rich developing countries with large domestic markets have a narrowing window to position themselves within key supply chains before they consolidate. Nigeria holds signifi cant potential in critical
minerals, a large domestic market, and continental access through AfCFTA, a combination few developing countries can
match.
Nigeria has held advantages before arable land, a young population, a petrochemical base and failed to translate them into competitive industries. The question is not whether the opportunity exists. It is whether Nigeria can fi nally understand what has always prevented
it from converting endowment into capability before this window closes in 2024, Nigeria imported hundreds of millions in textile materials yet what remains is largely informal tailoring, without the upstream industries that make garment manufacturing competitive. Textile-related products now account for 3–4 per cent of total imports, a striking reversal for a sector that once employed hundreds of thousands.

Automotives tell the same story. Nigeria imported $1.3 billion in cars and over $550 million in parts. When trucks, buses, and motorcycles are included, vehicle-related imports reach $3 billion to $4 billion — 5–6 per cent of the total import bill.
Beyond cars and clothes lies a deeper signal. Th e pattern repeats in electrical goods: Nigeria imports cables and batteries, then imports the calculators and chargers they could make. It pays twice for inputs, then for products skipping production entirely. What does it say about
an economy that cannot assemble simple consumer goods from imported parts, yet hopes to master green manufacturing?
Nigeria’s industries failed because scale grew without learning leaving production
dependent on cheap imports, protection, and oil revenues rather than productivity.
Th e 1970s oil boom masked this weakness. Foreign exchange was abundant, imported inputs were cheap, and tariff s shielded domestic fi rms. But policy choices cemented fragility. Import licensing removed pressure to develop local alternatives. Th e Indigenization
Decree transferred ownership but left technical control in expatriate hands.

Public investment deepened the illusion. Capital spending peaked at nearly 20 per cent of GDP in 1980, fi nancing power, ports, and steel. Yet power expanded while transmission to factories remained unreliable. Ajaokuta absorbed billions without generating skills or supplier networks. Output increased, but capabilities did not.

When oil prices collapsed in the mid-1980s, the weakness was exposed. Liberalisation arrived abruptly, placing infant industries in competition with Asian producers that had combined protection with sustained learning. Local firms could not compete. Smuggling
followed the collapse it did not cause it.
Since 1999, Nigeria has treated industrial revival as a capital scarcity and trade protection problem rather than a production cost problem. Over $4 billion has been channeled into textile and automotive interventions yet the outcome has been business survival, not productivity growth. Financing intended for upgrades was instead diverted to cover high operating expenses: private power generation, port delays, and currency induced input costs. In both sectors, the cumulative burden of these costs exceeds the landed price of finished imports
making competitiveness arithmetically impossible without first fixing the environment. A systemic labour deficit compounds this: factories lack specialised technicians and a workforce with basic industrial readiness.

Nigeria has no revealed comparative advantage in textiles, vehicles, or green manufacturing. But comparative advantage is not inherited it is built. Three conditions must be met. Mineral governance: Nigeria holds significant potential in critical minerals necessary for the green transition, but exploration and verification are currently lacking. Access to minerals must be conditional on partners establishing component manufacturing domestically.

A country that grants extraction rights without that conditionality is a passive landlord, not an industrial learner. Institutional alignment: Power, solid minerals, environment and industry currently measure success independently megawatts, royalties, trade volumes etc.
None is accountable for competitiveness. Mineral licenses proceed without reference to manufacturing needs. Power projects advance without
coordination with industrial zones.

Investment approvals celebrate factory openings without tracking whether those factories become competitive. Competitiveness remains a slogan because no institution is mandated to enforce it. Restructuring the Ministry of Industry, Trade and Investment into a Ministry
of Industry, Trade and Competitiveness would make competitiveness a defined function formally linked to power and solid minerals. Until these institutions operate under a shared mandate, industrial strategy will remain a series of disconnected announcements.

 

Shehu has worked on industrial
development projects at the African
Development Bank and UNIDO