One of the clearest indicators of Nigeria's troubled industrial policy landscape is the repetition of well-intentioned, poorly executed initiatives that fizzle out before they can take root. A textbook case is the cassava flour inclusion policy, which was introduced under President Olusegun Obasanjo, which aimed to mandate flour mills to include 10 percent cassava in bread.
The policy, designed to promote local agricultural value addition, reduce the wheat import bill and create rural employment, was enthusiastically launched, but was reversed under President Umaru Musa Yar'Adua. It resurfaced under President Goodluck Jonathan with new funding and energy but was quietly closed down again under President Muhammadu Buhari.
Today the policy has ended. The factories established, equipment installed, employees trained and capital deployed to support it are mostly idle or closed. Billions of naira were wasted. And worse, according to the National Bureau of Statistics (NBS), Nigeria continues to import wheat extensively, spending $2.59 billion on wheat imports in 2024 alone.
This is an example of a deeper problem: Nigeria's industrial development is regularly hampered by policy inconsistencies, weak institutional coordination, and misplaced government involvement. In contrast to cassava bread, the cement sector tells a more optimistic story, being a rare example of successful backward integration supported by clear policies and private capital.
Before the reforms in 2006, Nigeria was the third largest importer of cement and clinker globally. Domestic production barely meets 25 percent of demand, leading to high prices, supply gaps and stalled infrastructure projects. In response, the federal government introduced the Backward Integration Policy (BIP) for cement, increasing import duties and banning certain categories of cement imports. More importantly, it provided a stable regulatory framework and incentives that encouraged private sector players, particularly Dangote Cement and BUA, to invest on a larger scale.
The results have been transformational. By 2024, local cement production capacity is expected to reach more than 50 million metric tons annually, making Nigeria not only self-sufficient but also a net exporter to West Africa. Price volatility remains a concern due to energy and logistics costs, but the industrial base is safe.
According to Muda Yusuf, CEO of the Center for the Promotion of Private Enterprise (CPPE), cement flourished because private capital dominated the entire value chain. “The government created a clear, predictable policy environment and then allowed private investors to drive the process. That's what made the difference,” he said.
Why was this model not replicated in other regions?
In the food and beverage industry, particularly with cassava, milk and dairy, similar policies failed to gain popularity. Efforts to localize milk production failed as multinational dairy companies struggled to establish supply chains with local farmers. In many cases, unclear regulations, weak infrastructure and absence of a long-term policy approach have made local sourcing impractical.
The steel sector presents an even sadder picture. Despite decades of investment, Nigeria's major plants, Ajaokuta and Delta Steel, remain moribund. Yusuf blames state control and mismanagement for this. “If those projects had been structured like cement, with private ownership, incentives and performance standards, we would have had a functioning steel sector by now,” he says.
Failure in these areas has cascading effects. Without steel, Nigeria cannot industrialise. Food security cannot be achieved without food processing. And without textiles, the country loses a labor-intensive industry that could create millions of jobs.
The textile industry is a major victim of inconsistent policy and poor infrastructure. Rampant smuggling, an influx of cheap second-hand clothing and high energy costs have crushed local players. “Textiles are energy-intensive and dependent on foreign exchange. In an economy with irregular power supplies, high gas prices and foreign exchange shortages, they cannot compete with imports from China or India,” explains Yusuf.
Oyo State Commissioner for Budget and Economic Planning, Musibau Adetunji Babatunde, believes the root of the problem is poor policy targeting. “A lot of the policies are top-down and not tailored to the realities of small farmers and small-scale manufacturers,” he says.
Babatunde suggests that targeted incentives, delivered through cooperatives and unions, can improve outcomes. “The success of cement was not just about protectionism; it was also about scale, coordination and clear monitoring structures. If we had this in agriculture or manufacturing, we would see a similar change,” he said.
He also called for reducing bureaucratic barriers for small exporters, arguing that complex certifications and regulatory barriers make it almost impossible for local producers to access foreign markets. “The government should focus on standardization, certification support and infrastructure rather than trying to run industries directly,” says Babatunde.
Nigeria must abandon the practice of introducing lucrative policies only to abandon them before they reach maturity. Industrialization is a long game. This requires political discipline, institutional capacity and private sector confidence.
We recommend that the government adopt a three-pronged approach:
Policy consistency to ensure continuity in industrial policy across administrations. Where possible, create a framework backed by law, not just executive discretion.
Private sector-driven growth requires the state to step back from direct involvement in manufacturing and focus on creating an enabling environment through infrastructure, incentives and clear regulation.
Targeted support and enforcement, learning from the CEMENT model, combines protective tariffs with strong border enforcement and direct, targeted support for capable local players.
In a country struggling with high unemployment, food insecurity and import dependence, industrialization is not a luxury; It is a necessity. The success of cement shows what is possible. The cassava debacle reminds us of what happens when policy is driven not by pragmatism, but by politics.
