In Nigeria, we need not say much at this time about the need to diversify and produce more. With real GDP growth even dipping below the population growth rate, we need speed in churning out large amounts of output. Clearly, the first place to turn to is agriculture. We need agriculture mostly for the sake of reducing the cost of food which has turned more burdensome because Nigeria imports a significant amount of foodstuffs. And with a low level of foreign reserves, the ease of bringing in much food products has dropped sharply. Agriculture can also provide much headroom for increased manufacturing, as manufacturing as a percent of GDP is at best near the 8 percent range. Most of the well known countries in Asia, such as Malaysia, Thailand, Korea and China have a manufacturing share of GDP around the 30 percent range. That's why they are like that. Even India and Indonesia have manufacturing shares around 20 percent. In Africa, except for Mauritius and some of the North African countries where shares are in the 18 to 20 percent range, manufacturing as percent of GDP is mostly under 10 percent. I believe the USâ€™s African Trade and Opportunity Act (AGOA) which was renewed in 2015 offers a huge opportunity as has been discussed to help transform Africa and create jobs. Unfortunately, African countries have not been aggressive in utilizing AGOA opportunities where duty waivers can reach 35 percent, as in footwear. Apparel duty waiver under AGOA is about 32 percent. However, so far two way trade between the USA and Africa is well below $80 billion and has even decreased sharply in the past couple of years. The United States consumes about 25 percent of the worldâ€™s apparel. The EU also consumes about 25 percent of the worldâ€™s apparel. So Africa has duty free opportunities for apparel exports to the United States and Europe. Let us use them. The way to go for Africa is to get African communities to understand all the many opportunities that exist in manufacturing and processing of agricultural products and in the production of clothing and shoes for local and foreign consumption. We can do it. We just need to get our communities prepared and ready. I am Magnus Kpakol and thatâ€™s my view.
Posted: May 10th, 2016 @ 01:56:23 AM