The Growth of Industries in Nigeria (Scale Classification) Basic 6 History Lesson Note

Learning Objectives

By the end of the lesson, pupils should be able to:

• Define small scale industry and give examples
• Define medium scale industry and give examples
• Define large scale industry and give examples
• Relate the factors hindering rapid growth and development of Nigerian Industries
• List some industries established in Nigeria

Content

WEEK 4: CLASSIFICATION OF INDUSTRIES BY SCALE

What is Industrial Scale? Industrial scale refers to the size of an industry based on factors like the amount of money invested, number of workers employed, quantity of goods produced, and market coverage.

1. SMALL SCALE INDUSTRIES

Definition: Small scale industries are businesses that require low capital investment, employ few workers (usually less than 50), use simple technology, and serve mainly local markets.

Characteristics:

• Low Capital Investment: Usually under ₦50 million
• Few Workers: Typically 5-50 employees
• Simple Technology: Basic equipment and machinery
• Local Market: Serve local or regional customers
• Family-Owned: Often owned by families or individuals
• Limited Production: Small quantity of products
• Flexible Operation: Can change products easily

Examples of Small Scale Industries in Nigeria:

Food Processing:

• Garri Processing: Cassava processing in rural areas
• Palm Oil Mills: Small palm oil extraction units
• Rice Mills: Local rice processing
• Bread Bakeries: Neighborhood bakeries
• Fish Smoking: Traditional fish preservation

Textiles and Crafts:

• Tie-and-Dye (Adire): Traditional textile dyeing
• Weaving: Local cloth production
• Tailoring Shops: Clothing production
• Embroidery: Decorative needlework
• Leather Works: Bags, shoes, belts production

Wood and Furniture:

• Carpentry Workshops: Furniture making
• Wood Carving: Decorative and functional items
• Cabinet Making: Kitchen and office furniture

Metal Works:

• Blacksmithing: Tools and implements
• Welding Shops: Metal fabrication
• Aluminum Works: Windows, doors, kitchen utensils

Services:

• Barbing Salons: Hair cutting services
• Beauty Salons: Hair and beauty treatments
• Photographic Studios: Photography services
• Computer Centers: Typing and printing services

Locations: Found in every state, particularly in rural areas and small towns

2. MEDIUM SCALE INDUSTRIES

Definition: Medium scale industries require moderate capital investment, employ medium number of workers (50-300), use more advanced technology, and serve regional or national markets.

Characteristics:

• Moderate Capital: ₦50 million to ₦1 billion investment
• Medium Workforce: 50-300 employees
• Advanced Technology: Modern but not most sophisticated equipment
• Regional/National Market: Serve larger geographical areas
• Professional Management: Structured management system
• Higher Production: Moderate to high production capacity

Examples of Medium Scale Industries in Nigeria:

Food and Beverages:

• Honey Well Flour Mills: Regional flour production
• Chi Limited: Fruit juice and dairy products
• Indomie Nigeria: Instant noodle production
• Golden Penny Foods: Food products
• Peak Milk: Dairy products (Friesland Campina)

Textiles:

• United Nigerian Textiles (UNTL): Kaduna
• Arewa Textiles: Kano
• Nigerian Textile Mills: Various locations

Pharmaceuticals:

• May & Baker Nigeria: Pharmaceutical products
• Emzor Pharmaceuticals: Drug manufacturing
• Fidson Healthcare: Medicine production
• Beta Glass: Glass bottles for pharmaceuticals

Building Materials:

• Ashaka Cement: Regional cement production
• Cement Company of Northern Nigeria: BUA Cement
• Portland Paints: Paint manufacturing
• Premier Paints: Coating products

Plastic and Rubber:

• Michelin Nigeria: Tire manufacturing
• Dunlop Nigeria: Tires and rubber products
• Mr. Bigg’s Plastic Industries: Plastic products

Locations: Found in major cities and industrial estates across Nigeria

3. LARGE SCALE INDUSTRIES

Definition: Large scale industries require huge capital investment, employ many workers (over 300), use the most advanced technology, and serve national and international markets.

Characteristics:

• High Capital Investment: Over ₦1 billion
• Large Workforce: 300+ employees, sometimes thousands
• Advanced Technology: Latest and most sophisticated equipment
• National/International Market: Serve entire country and export
• Corporate Structure: Complex organizational structure
• Mass Production: Very high production capacity
• Multiple Locations: Factories in several states

Examples of Large Scale Industries in Nigeria:

Oil and Gas:

• Nigerian National Petroleum Corporation (NNPC): Oil production and refining
• Shell Petroleum Development Company: Oil exploration and production
• Chevron Nigeria Limited: Oil and gas operations
• ExxonMobil: Offshore oil production

Cement:

• Dangote Cement: Largest cement producer in Africa
• Lafarge Africa: Major cement and building materials
• BUA Cement: Significant cement production

Steel and Metals:

• Ajaokuta Steel Company: Integrated steel production (though struggling)
• Delta Steel Company: Steel production
• Aluminum Smelter Company (ALSCON): Aluminum production

Telecommunications:

• MTN Nigeria: Largest GSM network
• Airtel Nigeria: Major telecommunications company
• Globacom: Nigerian telecommunications giant
• 9mobile: Telecommunications services

Banking and Finance:

• United Bank for Africa (UBA): Pan-African bank
• Access Bank: Major commercial bank
• Guaranty Trust Bank (GTBank): Leading financial institution
• First Bank of Nigeria: Oldest bank in Nigeria

Food and Beverages:

• Nigerian Breweries: Largest brewing company
• Guinness Nigeria: International brewing company
• Nestlé Nigeria: Multinational food company
• Flour Mills of Nigeria: Major flour and agribusiness company
• Dangote Sugar Refinery: Largest sugar refinery

Manufacturing:

• Procter & Gamble Nigeria: Consumer goods
• Unilever Nigeria: Consumer products
• PZ Cussons: Personal care and consumer goods

WEEK 5: FACTORS HINDERING INDUSTRIAL GROWTH AND ESTABLISHED INDUSTRIES

Factors Hindering Rapid Growth and Development of Nigerian Industries:

1. INADEQUATE INFRASTRUCTURE

Power Supply Problems:

• Irregular Electricity: Frequent power outages disrupt production
• High Cost: Expensive electricity tariffs increase production costs
• Generator Dependence: Industries rely on expensive diesel generators
• Production Losses: Power cuts cause waste of raw materials

Transportation Challenges:

• Poor Road Networks: Bad roads increase transportation costs
• Port Congestion: Delays in importing raw materials and exporting products
• Railway System: Inadequate rail transport for heavy goods
• High Transport Costs: Expensive movement of goods across the country

2. LIMITED ACCESS TO CAPITAL

High Interest Rates:

• Expensive Loans: Bank interest rates often 15-25% annually
• Short-term Loans: Banks prefer short-term lending
• Collateral Requirements: Difficult requirements for loan security
• Risk Assessment: Banks consider manufacturing high-risk

Limited Capital Markets:

• Weak Stock Market: Limited ability to raise funds through shares
• Few Investors: Limited private equity and venture capital
• Government Funding: Insufficient government support for industries
• Foreign Investment: Challenges in attracting international investors

3. INADEQUATE RAW MATERIALS

Local Raw Material Problems:

• Agricultural Decline: Reduced production of industrial crops
• Quality Issues: Poor quality of locally produced raw materials
• Seasonal Availability: Raw materials available only at certain times
• Processing Capacity: Limited capacity to process agricultural products

Import Dependence:

• Foreign Exchange: Need expensive foreign currency for imports
• Import Duties: High tariffs on imported raw materials
• Supply Chain: Long supply chains from international sources
• Quality Control: Difficulty ensuring consistent quality of imports

4. SKILLED LABOR SHORTAGE

Technical Skills Gap:

• Education System: Schools not producing enough technical graduates
• Training Programs: Limited industrial training opportunities
• Brain Drain: Skilled workers migrating to other countries
• Obsolete Skills: Workers trained on outdated technology

Management Challenges:

• Professional Management: Shortage of experienced industrial managers
• Entrepreneurship: Limited entrepreneurial skills and experience
• Innovation Capacity: Limited research and development capabilities
• Technology Adoption: Difficulty in adapting to new technologies

5. MARKET LIMITATIONS

Small Market Size:

• Low Purchasing Power: Many Nigerians cannot afford manufactured goods
• Competition: Cheap imported goods compete with local products
• Consumer Preference: Some consumers prefer foreign products
• Market Access: Difficulty reaching customers in remote areas

Regional Trade Barriers:

• Multiple Taxation: Various taxes by different government levels
• Checkpoints: Numerous roadblocks increase transportation costs
• Regulatory Differences: Different regulations across states
• Currency Issues: Problems with West African trade

6. GOVERNMENT POLICY INCONSISTENCY

Policy Changes:

• Frequent Changes: Government policies change with new administrations
• Implementation Problems: Poor implementation of industrial policies
• Bureaucracy: Complex and time-consuming government procedures
• Corruption: Bribes and kickbacks increase business costs

Trade Policies:

• Import Policies: Inconsistent import/export policies
• Tariff Structures: Confusing and changing tariff systems
• Foreign Exchange: Restrictions on accessing foreign currency
• Tax Policies: Multiple and sometimes contradictory tax requirements

7. SECURITY CHALLENGES

Insecurity Issues:

• Crime: Theft, robbery affecting business operations
• Kidnapping: Business owners and workers at risk
• Vandalism: Destruction of industrial infrastructure
• Regional Conflicts: Ethnic and religious conflicts disrupt business

Cost of Security:

• Private Security: Expensive security services
• Insurance: High insurance costs due to security risks
• Relocation Costs: Moving operations to safer areas
• Production Disruption: Security issues stop production

Major Industries Established in Nigeria:

MANUFACTURING INDUSTRIES:

Automotive Assembly:

• Innoson Vehicle Manufacturing (IVM): Nnewi, Anambra State
• Peugeot Automobile Nigeria: Kaduna State (currently inactive)
• Volkswagen Nigeria: Lagos State
• PAN Nigeria (Peugeot): Car assembly

Pharmaceutical Industries:

• Emzor Pharmaceuticals: Lagos State
• May & Baker Nigeria: Lagos State
• Fidson Healthcare: Lagos State
• SKG Pharma: Various locations
• Drugfield Pharmaceuticals: Multiple locations

Chemical Industries:

• Indorama Petrochemicals: Port Harcourt, Rivers State
• Notore Chemical Industries: Rivers State
• Nigerian Synthetic Fabrics: Kaduna State
• Kano Chemicals: Kano State

AGRO-ALLIED INDUSTRIES:

Sugar Industries:

• Dangote Sugar Refinery: Lagos State (largest in West Africa)
• Golden Sugar Company: Bacita, Kwara State
• Savannah Sugar Company: Numan, Adamawa State

Rice Mills:

• Kebbi Rice Mills: Kebbi State
• Ebonyi Rice Mills: Ebonyi State
• Lake Rice: Lagos State (processing)
• Popular Farms: Nasarawa State

TECHNOLOGY INDUSTRIES:

Telecommunications Equipment:

• IHS Towers: Telecommunications infrastructure
• MainOne: Internet and data services
• Huawei Nigeria: Technology equipment
• Samsung Nigeria: Electronics assembly

Information Technology:

• Microsoft Nigeria: Software and services
• Google Nigeria: Internet services
• IBM Nigeria: Computer services
• Oracle Nigeria: Database and software

Activities

• Classify industries in your local area by scale
• Create a chart showing examples of each scale of industry
• Research one large scale industry and present its history and impact
• Discussion on how to solve problems facing Nigerian industries

Multiple Choice Questions

1. Small scale industries typically employ: a) Over 300 workers b) 50-300 workers c) Less than 50 workers d) Over 1000 workers 
2. Which is an example of large scale industry? a) Local bakery b) Tailoring shop c) MTN Nigeria d) Carpentry workshop 
3. Medium scale industries require capital investment of: a) Under ₦50 million b) ₦50 million to ₦1 billion c) Over ₦1 billion d) No specific amount 
4. The biggest challenge facing Nigerian industries is: a) Too many workers b) Inadequate infrastructure c) Excess raw materials d) Too much capital 
5. Which company is Nigeria’s largest cement producer? a) Lafarge b) BUA Cement c) Dangote Cement d) Ashaka Cement 

Homework

Identify three industries in your state: one small scale, one medium scale, and one large scale. For each industry, write about:

1. What it produces
2. How many people it employs
3. What challenges it faces
4. How it contributes to your state’s economy
5. Suggestions for helping it grow