How Nigeria can shift from consumption to production economy — AfDB adviser

The Senior Special Adviser to the President on Industrialisation at the African Development Bank Group, Prof. Banji Oyelaran-Oyeyinka, has urged Nigerian leaders to adopt a deliberate national strategy to transition the country from a consumption-driven economy to a production-oriented one, warning that continued dependence on imports and raw material exports will perpetuate poverty.

Oyelaran-Oyeyinka, who was the guest speaker at the Nigerian Society of Chemical Engineers’ Fellows Confab 2025 chaired by Engr Clement Ede Agege.

With the theme: “From Consumption to Production Economy in Nigeria — The Pathways,” on Thursday, Oyelaran-Oyeyinka said Nigeria must urgently reverse its over-reliance on crude oil and imported goods if it hopes to achieve inclusive growth and stability.

He noted that the consequences of being a consumption economy were already evident in Nigeria’s declining industrial capacity, rising unemployment, and vulnerability to global price shocks.

“If a society spends one hundred dollars to manufacture a product within its borders, that money circulates through the economy as each recipient spends it. But if that same hundred dollars is spent on foreign goods, it only circulates in the exporting country. This is why industrialised countries are rich, and product-importing countries remain poor,” Oyelaran-Oyeyinka explained.

The AfDB adviser, who is also a Professorial Fellow at the United Nations University in the Netherlands, lamented that Nigeria’s obsession with foreign goods had created “a ruinous pathological dependency” and eroded national self-reliance.

“We made dependence on crude oil export our growth strategy and abandoned local production. We now rely on others even for the design and engineering of the most basic things like roads or steel processing. In today’s turbulent global order, this dependency is a dangerous indulgence. Remember Covid-19 — we had the money but not the capacity,” he said.

Oyelaran-Oyeyinka described a consumption economy as one dependent on extractive industries, characterised by frequent booms and busts, and lacking a solid manufacturing base. He added that such economies often experience “jobless growth,” instability in the service sector, and widening trade deficits.

Citing China’s transformation as an example, he said the Asian nation’s focus on continuous production, innovation, and technological learning was the key to its economic dominance.

“In 1990, China had only 500,000 cars. By 2024, it had 435 million vehicles — mostly electric. Today, China produces about 60 million cars a year out of the global 90 million. This mastery came from continuous production and learning, not from importing,” he stated.

He argued that countries that industrialised successfully followed a “technological learning” process — beginning with imitating and adapting foreign technologies, then gradually building their own innovation capacity.

“All the Asian Tigers — Japan, Korea, and China — began by copying and learning. They did not mock imported technology; they improved it. Eventually, they became innovation leaders. That is the path Nigeria must follow,” he emphasised.

The AfDB adviser called for deliberate investment in key sectors such as agriculture, agro-processing, petrochemicals, textiles, and light manufacturing to drive production, create jobs, and promote local consumption.

He also identified lithium as a strategic mineral that could position Nigeria in the global energy transition if properly harnessed.

“Nigeria is rich in high-grade lithium deposits across Kaduna, Nasarawa, Kogi, Ekiti, and Cross River. Rather than exporting raw lithium as we did with crude oil, we must process it locally and insert ourselves into the full electric vehicle value chain,” he said.

Oyelaran-Oyeyinka urged government and investors to develop Special Agro-Industrial Processing Zones to connect farmers, processors, and manufacturers, noting that rural industrialisation is key to reducing poverty and building secondary cities.

“Transforming the rural economy is a prerequisite for industrialisation. When living standards rise, markets expand, and firms can exploit economies of scale,” he said.

He estimated that for Nigeria to achieve its goal of becoming a $1 trillion economy, it must sustain a minimum growth rate of 14.7 per cent annually for ten years or 9.6 per cent over 15 years — far above the current seven per cent target.

“Growth is synonymous with industrialisation. Since the mid-1980s, Nigeria has been de-industrialising. Our textile, leather, fertiliser, and ceramics factories have become white elephants. To eradicate poverty, we must return to being a production economy,” he stressed.

Oyelaran-Oyeyinka concluded by quoting American philosopher Benjamin Franklin:

“Wise men learn by others’ harms; fools by their own.”

He urged Nigerian policymakers to learn from the success of industrial nations that deliberately built production capacities.

“The factory of national firms is the furnace where long-term fortunes are formed. The wealthiest nations are those with the strongest industrial capacities. Nigeria will rise again. God bless Nigeria,” he said.

Earlier, the Chairman of the Nigerian Society of Chemical Engineers, Engr. Yar’Adua Lawal, lamented that Nigeria continues to lose its mineral wealth to foreign exploitation due to the absence of a coordinated engineering strategy.

“What we are witnessing today is the continuous exploitation of our nation’s vast mineral resources — taken abroad while we gain little or nothing. We as engineers must create a forum to harness these resources for national development,” Lawal said.

He cited the Ajaokuta Steel Company as an example of Nigeria’s failed industrial promise, saying decades of neglect had left the country dependent on imports even for basic infrastructure.

“Every day, our minerals from states such as Kogi, Niger, and Taraba are being taken away. Yet we have the expertise to transform these materials locally,” he said.

Lawal urged young engineers to think deeply about how to develop Nigeria and reduce its reliance on foreign goods.

“We keep exporting what we have and importing what we don’t need. It is time for engineers to lead the change — to turn our resources into finished products,” he said.