Crusoe Osagie
3 June 2011
The United Nation Industrial Development Organisation (UNIDO) yesterday declared that the world is entering an era of permanent food crisis.
The UNIDO Representative and Director, Regional Office in Nigeria, Dr. Patrick Kormawa, said that the situation is likely to be accompanied by political unrest and will require radical reform of the international food system.
Kormawa, who spoke during the quarterly business luncheon of the Lagos Chamber of Commerce and Industry (LCCI) tagged “Industrialisation in Nigeria: Challenges and Opportunities”, stressed that according to a new study, the prices of staple crops, such as maize, could rise by 180 percent by 2030.
He said the implication of such unprecedented price increase is that the Nigeria’s poorest people, who spend up to 80 percent of their income on food, will be hit hardest.
He noted that the study predicts that the average price of staple foods will more than double in the next 20 years, leading to an unprecedented reversal in human development.
“According to the National Bureau of Statistics (NBS), Nigeria spends about N300 billion on food imports alone (food, beverages and processed combined),” he said.
He pointed out that Nigeria’s aspiration for industrialisation cannot be achieved or poverty reduced significantly without a reliable source of cheap energy saying that the Gross National Income per capita for Nigeria is US$1,190 compared to US$32,330 for Austria.
According to him, countries without reliable power supply per capita happen to be the poorest countries in the world stating that there is a correlation between poverty and energy access.
“Thus, an energy sector development policy must facilitate industrialisation and promote use of energy for productive purposes, and not just shining electricity on the poverty,” he said.
Also speaking at the event, the President of LCCI, Otunba Femi Deru, said the manufacturing sector is critical to the growth and development of any economy saying that in Nigeria, the sector now contributes less than five percent of the nation’s Gross Domestic Product (GDP) as against 30 to 40 percent contribution in some other developing economies.
He stated that the importance of the manufacturing sector is underscored by the fact that it has high potentials to create job opportunities, improve technology acquisition and alleviate poverty, especially at the level of Small and Medium Industries (SMIs).
He added that it also encourages the use of local raw materials.
Deru said the sector is currently faced with a multitude of problems which he listed as the worsening power supply situation putting enormous pressure on the cost of production.
He added that the costs of diesel and Low Pour Fuel Oil (LPFO), which serve as alternative sources of energy, have also become exorbitant.
He pointed out that multiplicity of taxes and levies coming from all levels of government have become a major burden for manufacturing enterprises.
He said cost of funds which is currently in the range of 20 percent to 25 percent is still too high for sustainable manufacturing enterprise.
“The challenge now is how to move our industrial sector forward in the light of these overwhelming problems,” he said.
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