Its CEO, Dr Muda Yusuf, gave the advice in his keynote address at the Nigerian Association of Small Scale Industrialists (NASSI) 6th Trade Fair on Tuesday in Lagos.

Yusuf noted that many factory premises around the country had been taken over for activities order than manufacturing.

According to him, some of the key activities that have taken over the factory premises include event centres, supermarkets, worship centres, warehouses for imported finished goods among others.

He added that evidences could be found in industrial estates located in Ilupeju, Ogba, Ikeja, Sango-Ota, Agbara and many other parts of the country including the east and north.

Yusuf said factors responsible for deindustrialisation included influx of cheap and substandard products, foreign exchange crisis, high energy costs, multiple taxation, weak domestic patronage and policy inconsistency.

“There are inadequate basic industries to support our manufacturing enterprises and such basic industries include the iron – steel and petrochemical industries.

“Also, weak infrastructural base, high cost of fund, absence of long-term funds, challenges of access to credit by MSMEs as well as other firms in the sector, hinder manufacturing performance.

The SME sector accounts for over 50 per cent of GDP but has access to only 1 per cent of bank credit to the private sector.

“This demonstrates the enormity of the funding challenges that are faced by small businesses.

“Also, Research and Development (R &D) does not attract sufficient investments needed to promote industrialisation alongside low industrial space and absence of innovation,” he said.

As way forward, the CPPE boss pushed that systemic issues of infrastructure should be addressed as a matter of utmost priority with immediate focus on electricity supply and logistics.

Yusuf said unless these two critical infrastructure were in place, it would be very difficult to ensure a competitive industrial sector and to make possible the transformation of the sector.

“We should fix the foreign exchange liquidity and currency depreciation issues, address concerns about unfair competition from imported finished goods and regulatory and institutional problems affecting MSMES.

“Also, challenges of access to credit, cost of credit and tenure of funds should be addressed.

“We should focus on labour-intensive industries to enhance job creation and promote economic inclusion and take full advantage of the large Nigerian market to scale up our industrial capacity utilisation.

“We need to support the small businesses with business development skills as well as technical skills in our drive towards industrialisation,” he said.

Yusuf also called for policies and legislation compelling large enterprises and foreign companies to sub contract aspects of their operations and activities to the indigenous SMEs.

This, he said, was necessary to foster linkages and to build inclusiveness in the industrialisation process.

“Linkages between large and small enterprises impact positively on industrialisation and also facilitate the building of an inclusive industrial ecosystem.

“Some of the channels of these linkages include: subcontracting, licensing, joint ventures, strategic alliance, consortium and a wide range of vertical linkages.

“These linkages are very critical to industrialisation and economic growth, especially in developing economies,” he said.