Nigeria’s Federal Executive Council (FEC) presided over by President Bola Ahmed Tinubu, the other day, approved a new initiative to revise and enforce procurement rules that prioritize Nigerian-made goods and homegrown solutions across all Ministries Departments, and Agencies (MDAs). Under the policy, no MDA shall be allowed to procure foreign goods or services already available locally without a written waiver from the Bureau of Public Procurement (BPP).

According to the Minister of Information and National Orientation, Mohammed Idris, the new policy places Nigeria at the center of all public procurement and business activity, “with a strong emphasis on empowering local industries and reducing dependency on foreign imports.” Idris said that the Attorney General of the Federation has been directed to draft an Executive Order to give full legal effect to the new framework.

Under the initiative, code named “Nigeria First”, the BPP would create a comprehensive compliance mechanism to ensure all government procurements adhere to local content requirements. “A regularly updated database of high-quality Nigerian suppliers will be maintained by the BPP, and used as a reference for all procurement decisions,” Idris said

The “Nigeria First” policy also provides that “where foreign contracts are unavoidable, they must include provisions for technology transfer, local production, or capacity development in Nigeria.” The Minister said: “we continue to import sugar despite the existence of the Nigerian Sugar Council and several local producers. This policy will change that.” 

The new initiative, “Nigeria First”, mimicking Donald Trump’s “America First”, is, obviously, another attempt at an import-substitution industrialization (ISI) strategy. Nigeria, like many other countries in Africa, adopted ISI policies in the 1970s and 1980s to promote indigenous economic growth and reduce dependence on foreign imports.

One notable example of Nigeria’s ISI efforts is the 1972 Nigerian Enterprises Promotion Decree, which required foreign companies to offer at least 40% of their equity shares to local people. This move was aimed at increasing local ownership and control of industries in key sectors, thereby promoting domestic growth.

Nigeria’s ISI had also involved government interventions via tariffs, quotas, and bans to protect infant industries and encourage local production. Minimizing foreign competition, and containment of the menace of dumping were the other reasons advanced by successive Nigerian governments for the adoption of ISI. 

Although the growth and development of certain sectors of the Nigerian economy could be attributed to the ISI policies, such gains remained unsustainable in the face of local and global paradigm shifts. For example, the establishment of cement plants, textile industries, automobile assembly plants, steel rolling mills, etc. in the 1970s and 1980s during the ‘oil boom’ era was essentially ISI-driven.

However, over the years, policy inconsistency, weak political will, globalization and multilateralism have combined to derail the ISI agenda. The Structural Adjustment Program (SAP) of the late ‘80s, believed to have been imposed by the IMF and the World Bank, compelled economic liberalization, privatization, and commercialization. And Nigeria practically joined the rest of the world as a ‘global village,’ unprepared, as it were. 

Thus, whatever gains Nigeria made from ISI strategy were either substantially lost or totally reversed. The auto assembly and manufacturing plants across all geopolitical zones of the country were left moribund. The steel rolling mills, iron smelting companies, textile mills, refineries, among others, got similarly abandoned.

Apparently egged on by an unceasing petro-dollar inflow, Nigeria, no sooner than it experimented with the ISI strategy, reverted almost fully to high import-dependency. The nation only flirted with the mantra of export-led economic growth for a while.

The country’s affliction with the dreaded ‘Dutch Disease’ and its attendant pervasive taste and preference for foreign goods, left her a dumping ground for all manner of imports. With near-total dependence on crude oil exploration, production and export, virtually all other sectors of the Nigerian economy was abandoned, or received merely superficial attention.

Today, even a few entities that could still be linked to the ISI initiative are being swamped by deep-seated aversion to local entrepreneurship. This, in part, accounts for why the Dangote Refinery had to win a pyrrhic victory against blockades posed by the officialdom to fully commence local refining of petrol (Premium Motor Spirit, PMS). The already entrenched interests in PMS importation are hardly yielding ground.

Again, this explains why, out of the so many licenses issued by the Federal Government for the setting up of (private) refineries in the country, only very few (notably, Dangote) have been able to do so. It can also be safely inferred that the vested interests in PMS importation, directly or indirectly, ensured the continued decrepit state of the state-owned refineries in Nigeria over the years.

The same tendency accounts for why the Ajaokuta Steel Company, the Aladja (Warri) Steel Complex), some aluminum smelting companies, auto assembly plants, some sea ports, etc. are yet moribund till date. The anti-ISI forces apply red tapes and other obstacles to ensure that the nation rather keeps wobbling with import-dependency—with its attendant vulnerabilities.

All these years, despite the mouthing of industrialization and infrastructural development by successive governments, Nigeria has really been experiencing de-industrialization and deteriorating infrastructure. In recent years, not a few multinationals have opted to leave Nigeria on account of decaying infrastructure, unconducive business environment, among other challenges.

Now that the Bola Ahmed Tinubu-led administration is indicating interest to reintroduce ISI, it has a load of the nation’s checkered economic history as a veritable guide. It is not enough to want to flow with the mood of President Donald Trump’s rabid nationalism; nor would it be easy to jettison Nigerians’ entrenched penchant for the consumption of foreign goods.

At the peak of ISI implementation in the ‘70s and ‘80s, certain brands of Peugeot Nigeria cars were the approved official status vehicles of topmost political leaders and public servants. This means leadership by example; no showmanship, no display of ostentatious public life.

As the Attorney General of the Federation hammers out the nitty gritty of the Executive Order on (the new) ISI, he must put clauses that compel political leaders and the officialdom to play by the rules. Some sort of reorientation beyond the MDAs in pursuit of “Nigeria First” would need to be mounted to really curb the entrenched preference for foreign goods among Nigerians.

Success in this regard would translate to reducing the ever huge demand for FX for the importation of items that have several durable local substitutes. The sustained patronage of these local goods and services would lead to the conservation of Nigeria’s scarce FX; as well as the strengthening of the local currency vis-à-vis the dollar. 

This practice, over time, among other planks of the new ISI would effectively and sustainably pull the economy out of the woods. The new ISI package must therefore go beyond the MDAs, but must be championed by the Nigerian leadership—in both their official and private lifestyles. “Nigeria First” should not remain a slogan!

The author, Okeke, a practicing Economist, Business Strategist, Sustainability expert and ex-Chief Economist of Zenith Bank Plc, lives in Lekki, Lagos.