Nigeria stands at a crossroads. The ‘Nigeria First’ policy encapsulates a bold assertion of sovereignty over economic destiny, a welcome antidote to decades of overreliance on imports and external markets. It signals a desire to foster an industrial renaissance that can create jobs, raise incomes, and reduce dependence on foreign exchange.

But ambition alone cannot substitute for readiness. Without commensurate investments in infrastructure, governance reforms, and industry capacity, the policy risks becoming a costly protectionism exercise. Worse, it could burden Nigerian citizens with higher costs, substandard services, and missed opportunities.

As Nigeria charts a new course under Tinubu’s administration, the ‘Nigeria First’ policy has emerged as a defining economic mantra. While the intentions behind this directive resonate with aspirations of economic revival and self-reliance, the practical implications reveal a complex web of promises and pitfalls.

The promise of renewed hope

Nigeria’s manufacturing sector has long struggled with low productivity and limited contribution to the national economy. Growth in Nigeria’s manufacturing sector slowed to 1.38% in 2024 owing to worsening macroeconomic challenges amid shrinking consumer spending and high borrowing costs. Data from the fourth quarter GDP report shows that growth in the sector saw a marginal decline of 0.02 percentage points from a 1.40% growth rate recorded in 2023 to 1.38% in 2024.

The sector’s contribution to the country’s gross domestic product also declined marginally to 8.21% in 2024 from 8.64% recorded in the previous year. The ‘Nigeria First’ policy seeks to reverse this trend by creating a consistent demand for locally produced goods through government procurement.

The Manufacturers Association of Nigeria (MAN) has lauded the policy, describing it as a long-awaited relief that could boost GDP by 56%, reduce unemployment by 37%, and increase firms’ willingness to employ from 1.5% to 22.6%. Such projections show the policy’s transformative potential if effectively implemented.

Beyond economics, the policy also carries symbolic weight. The ‘Made-in-Nigeria’ brand has struggled to gain consumer confidence, domestically and abroad, due to persistent perceptions of inferior quality.

By making local products a compulsory choice for government procurement, the policy could gradually instil a culture of national pride in Nigerian goods, countering the long-standing consumer bias toward imports. This can generate positive spillovers into private sector consumption and even export markets.

The peril of renewed hopelessness

Despite its potential, the ‘Nigeria First’ policy carries inherent risks. The 4.98% decline in the manufacturing sector’s contribution to GDP reflects the sector’s persistent structural challenges, including limited access to foreign exchange, high production costs exacerbated by the erratic power supply, and import dependency on raw materials.

These challenges have led to reduced industrial capacity utilisation, directly affecting job creation and export diversification efforts, and hindering the competitiveness of local industries.

Furthermore, the policy may inadvertently lead to higher government procurement costs. For instance, if MDAs are compelled to purchase locally produced medical supplies or IT equipment that are inferior or more expensive than foreign alternatives, it could compromise service delivery and fiscal efficiency.

Additionally, the policy risks entrenching complacency among local firms. Without the rigour of competition from international producers, some manufacturers may lack the drive to innovate, improve quality, or reduce costs. This could entrench a ‘buy local at any cost’ mentality that ultimately harms consumers and the broader economy, especially for a country still battling high inflation.

While the ambitions behind Nigeria First are commendable, history and experience caution against simplistic mandates. Under former President Muhammadu Buhari, Nigeria implemented several protectionist policies to boost domestic industries and curb smuggling.

One of the most notable measures was the closure of land borders in August 2019, a policy that remained in effect until December 2020. This decision was primarily driven by the desire to combat rice smuggling and encourage local rice production. However, this further contributed to rising inflation in a country battling poverty and other structural issues. Protectionist policies can easily morph into economic echo chambers if local industries are not ready to meet global standards on quality, scale, and price.

With the current inflationary pressure in the country, the stakes could be even higher. Many local manufacturers continue to grapple with infrastructural deficits, including unreliable power supply, poor transport logistics, and limited access to affordable finance. These constraints impair their ability to produce competitively priced goods at scale. According to the World Bank’s Ease of Doing Business ratings for 2024, Nigeria ranks 131st among 190 economies globally, highlighting persistent challenges that undermine industrial competitiveness.

The way forward

For the ‘Nigeria First’ policy to genuinely transform the economy, it must go beyond a simplistic approach and be integrated into a broader, more strategic framework. One of the foremost areas that needs attention is infrastructure investment. Without reliable power, effective transport networks, and modern technology infrastructure, local manufacturers will struggle to compete globally.

The government must prioritise expansive infrastructural reforms focusing on boosting energy access, upgrading ports, and enhancing road networks. These improvements are essential to reducing production and logistical costs, as well as ensuring more reliable and efficient supply chains.

In addition to infrastructure, regulatory consistency and a streamlined business environment are critical for the policy’s success. The government must work to reduce bureaucratic hurdles and ensure that tax policies are consistent and transparent.

A regulatory environment that is both predictable and efficient will attract investments and enable manufacturers to scale their operations. Clear and consistent policies will not only provide a stable environment for local firms to thrive but will also reassure investors, both local and international, that Nigeria is serious about its industrial growth.

Moreover, capacity building and standards enforcement are key to ensuring the local manufacturing sector can meet domestic and international demands. The government should collaborate closely with industry groups like the Manufacturers Association of Nigeria (MAN) to raise production standards, offer technical support, and facilitate access to affordable financing.

It’s equally important that robust mechanisms are in place for quality control and certification, ensuring that only businesses that meet global benchmarks benefit from preferential procurement. This will encourage competition and foster innovation within the sector.

The ‘Nigeria First’ policy has the potential to spur significant industrial growth, but only if it is backed by targeted investments in infrastructure, regulatory reforms, capacity building, and procurement transparency. With these steps, Nigeria can cultivate a competitive manufacturing sector that benefits the domestic economy and enhances its position in global markets.

The success of ‘Nigeria First’ hinges on government mandates and a shared commitment from public institutions, private sector actors, and civil society to build a sustainable, competitive Nigerian economy. Only then can the echoes of ‘Nigeria First’ reverberate beyond political slogans to tangible economic transformation.

Sami Tunji is a senior business correspondent at The PUNCH Newspaper and a Free Trade Fellow at Ominira Initiative.

Views expressed by contributors are strictly personal and not of TheCable.