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Value Addition: A Tool for Accelerated Industrialisation in Nigeria

Deinibiteim M. Harry, Samuel B. Kalagbor


The Nigerian economy since independence in 1960, shows all the trappings of underdevelopment. Frist dominated by the agricultural sector in the 1960s, became later tied-in to the oil and gas sector from the 1970s to date. Essentially, these primary sectors, especially the oil and gas sector since the 1990s, contributed over 95 percent to export earnings and 85 percent of government revenue. Hence, economic diversification is desired. To attain diversification of the economy through industrialisation high levels of value addition is critical. Over the years successive regimes have embarked on policies and strategies towards industrialisation. Some of the industrial development strategies are Import Substitution Industrialisation (ISI), export promotion, indigenization, etc. However, not so much has been achieved in the industrialisation drive due to obvious reasons of policy disarticulation. Thus, the main objective of the paper is to show that the industrial policies and strategies of successive administrations were not well articulated to bring about industrialisation. The study revealed that the capital-intensive nature and character of the few industrial establishments do not give room for value addition; hence there is no backward linkage with the local economy. To achieve real industrialisation labour-intensive industries should be encouraged to allow for innovation, indigenous technology, local manpower and raw material. This would create the much-needed backward linkages with the local economy. Hence the paper concluded that for Nigeria to be an industrialized economy value addition must be made a prerequisite in the production processes. The study recommended among other things, that value addition should be made compulsory in the industrial sector operation(s) for this will guarantee backward integration and accelerate the process of industrialisation of the country.

Key Words: Industrialisation, value addition, economy, backward linkage, diversification, labour-intensive.
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