Nigeria cannot industrialise without regulatory reform

BY BILYAMINU LUKMAN MAIHANCHI

Nigeria’s aspiration to industrialise has been repeated for decades in policy documents, political speeches, and development plans. Yet, despite abundant human capital, natural resources, and entrepreneurial energy, the country remains heavily dependent on imports for even the most basic industrial products. The reason is often blamed on infrastructure deficits, power shortages, or access to finance. While these challenges are real, they mask a deeper and more fundamental obstacle: the nature and exercise of regulatory power in Nigeria.

No country has successfully industrialised under a system where regulation is unpredictable, discretionary, and inconsistent. Industrialisation thrives on certainty. Investors—local or foreign—must be able to understand the rules, comply with them, and proceed with confidence that the goalposts will not be shifted midway. Where regulators act arbitrarily, capital becomes cautious, innovation slows, and productive capacity suffers.

At its core, regulation is meant to serve the public interest. Regulators are expected to set clear standards, ensure safety and quality, and enforce compliance fairly. They are not meant to be obstacles to production or participants in the market. When regulatory agencies move from being neutral umpires to becoming gatekeepers with excessive discretion, regulation transforms from a tool of governance into an instrument of economic control.

Recent events in Nigeria’s energy sector have brought this issue into sharp focus. A major indigenous industrial investment, designed to reduce import dependence, conserve foreign exchange, and enhance energy security, found itself entangled in shifting regulatory requirements and public disputes. The details are less important than the pattern: initial approvals followed by new hurdles, public allegations preceding conclusive engagement, and uncertainty that was resolved only through high-level political intervention. This sequence is not unique to one sector; it reflects a broader systemic problem.

A country cannot credibly promote local content while simultaneously creating regulatory environments that favour importation over domestic production. Import-dependent economies often develop powerful vested interests around logistics, foreign exchange arbitrage, and intermediary profits. Where regulation is weak or compromised, these interests tend to resist any structural change that threatens established rent-seeking arrangements. The result is an economy that rewards trading more than production and consumption more than manufacturing.

From a constitutional and administrative law perspective, this is deeply troubling. Regulatory agencies exercise delegated authority. Their powers are not absolute; they are meant to be exercised within the bounds of law, reasonableness, transparency, and accountability. Where decisions are opaque, inconsistent, or appear selective, the legitimacy of regulation itself comes into question. Industrial development cannot flourish in an environment where regulatory outcomes depend more on discretion than on clearly defined rules.

Equally concerning is the increasing tendency to rely on presidential or executive intervention to resolve regulatory disputes. While such interventions may offer short-term relief, they expose institutional weakness. In a functional regulatory system, compliance decisions should not require escalation to the highest political office. Investors seek systems, not personalities. When approvals depend on exceptional intervention, confidence in institutions is eroded.

History offers clear lessons. Countries that industrialised successfully—whether in East Asia, parts of Europe, or emerging economies—did so by reforming regulatory frameworks to align with national production goals. This did not mean lowering standards or weakening oversight. On the contrary, it meant clarifying standards, setting time-bound approval processes, insulating regulators from vested interests, and ensuring that regulatory decisions were subject to effective judicial review.

For Nigeria, regulatory reform must go beyond rhetoric. It requires concrete measures: clear and published benchmarks for compliance, statutory timelines for approvals, “deemed approval” mechanisms where agencies fail to act within prescribed periods, separation between regulators and commercial interests, and real consequences for abuse of regulatory power. Without these, industrial policy will remain aspirational, and local investors will continue to face hurdles that importers do not.

Industrialisation is not merely an economic ambition; it is a matter of national security, employment, and sovereignty. A country that cannot produce what it consumes remains vulnerable to external shocks and internal instability. Supporting local production is not charity—it is sound economic governance.

Nigeria stands at a crossroads. It can choose rule-based, transparent, and facilitative regulation that encourages production, innovation, and investment. Or it can continue with discretionary regulatory power that sustains import dependence and economic fragility. The choice is clear.

Nigeria cannot industrialise without reforming regulatory power. Until this reality is confronted honestly and decisively, the dream of industrial transformation will remain just that—a dream.

Barrister Bilyaminu Lukman Maihanchi, a human rights and public interest litigator, can be contacted via [email protected]