The federal government has disclosed that its initial plans to convert six out of 23 Industrial Development Centres (IDCs) in the country to industrial clusters (ICs) would cost over N67billion.
According to the federal government, this followed the conclusion of a study on the project which was sponsored by the African Development Bank (AfDB).
At a media briefing, minister of state, ministry of industry, trade and investment, Hajiya Aisha Abubakar, who dropped this hint in Abuja, told newsmen that the harmonisation of all contributions for the initial stage of reviving and converting the IDCs into clusters would be completed before the end of August 2018.
The minister had launched the cluster project on May 9, 2017, with the expectation that the first phase would be concluded by the end of the first quarter of 2018, but the timeline could not be achieved.
At a presentation at the meeting, Mr Haroun Abba, business consultant at Triangle Consulting which did the study, explained that six viable cluster models were identified in the areas of agriculture (Grains, Spices and Oil Palm) , and manufacturing (Furniture, FMCG, and Petrochemicals).
Abba said a total of 18 potential cluster models were identified but were narrowed down to the most viable six.
According to him, the states identified for the project include, Lagos (FMCG), Imo (Oil Palm), Sokoto (Spices), Borno (Grains), and Rivers (Petrochemical).
Giving a lowdown of costs for the pilot phase of the project, Abba disclosed that Lagos would require a total of N2.64 billion, Imo N5.01billion, Sokoto N21.6 billion, Borno N17.5 billion and Rivers 22.4 billion.
On criteria for the selection, he revealed that out of the 23 IDCs, five were identified to have low viability, eight of moderate viability, and 10 of high viability.
Shedding more light on the project, the director-general of Small and Medium Enterprise Development Agency of Nigeria (SMEDAN), Dr. Dikko Radda, said the latest effort by government stemmed from the need to address the problem of work space for micro, small and medium enterprises (MSMEs), and promote economics of scale derivable from the agglomeration of critical mass of enterprise.
Commenting on the project’s estimate, he noted that the IDCs facilities that were supposed to be converted to clusters were presently not in optimal state of utilisation due to challenges ranging from obsolete equipment/machinery, poor funding and limited capacity of personnel. Radda also pointed out that some of the facilities had also suffered encroachment.
He however expressed confidence that two-third of the land areas were still available for redevelopment of the IDCs into industrial clusters or enterprise zones depending on their sizes and economic viability.
According to him, upon stimulation of clustering dynamics by redeveloping the IDCs into industrial clusters that provide reliable infrastructure and network externalities, MSMEs would be able to deliver on intended objectives in an effective and efficient manner thereby starting a virtuous cycle of wealth generation and job creation which would in turn significantly boost the nation’s gross domestic product (GDP).
Also speaking, the country programme manager of the African Development Bank (AfDB), Dodji Lawson Zankli, said AfDB was committed towards finding ways of growing the Nigerian economy through diversification and promotion of trade, industry and investment through MSMEs in a sustainable way.