The Chairman, Manufacturers Association of Nigeria (MAN), Edo/Delta branch, Mr. Ehizogie Osadolor, has said that most manufacturing companies in Nigeria are operating below 30 percent of their capacity due to some government’s polices and reforms which have crippled the sector.
Osadolor said this at the 38th Annual General Meeting of the Edo/Delta branch in Benin on Sunday. He said the impact of government policies had informed theme of the AGM, “Igniting Economic Growth and Development through Improved Competitiveness of Made-In-Nigeria Goods”
He listed the reforms and policies affecting the manufacturing sector to include high electricity tariff, high exchange rate, high lending interest rate, multiple taxes and levies, removal of fuel subsidy, floating of the naira, exchange rate policies and increase in monetary policy rate among others.
“As a result of the high exchange rate, manufacturers were unable to import the raw materials needed for production, leading to a considerable reduction in capacity utilization of many companies to 30 percent,” he said.
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Osadolor said it was worrisome that the key operational challenges identified over the years by the association were yet to receive the required government attention as the economy gradually grounded.
“So, following theses challenges, most manufacturing companies operate below 30 percent of their capacity,” he added.
He said for manufacturers to overcome the challenges and keep the sector going, “government urgently needs to give priority attention to the manufacturing sector by providing adequate bailouts for the sector and put the necessary infrastructure in place to avoid a total collapse of the sector.
“They should encourage the patronage of Made-in-Nigeria goods to reduce pressure on the dollar which is needed for the importation of foreign goods. This will increase the production capacity of local manufacturers and reduce unemployment in Nigeria.”
He added that the government should invest more in renewable energy such as wind, solar, biomass, and small hydropower to support businesses.
Also, he said the government should eliminate excessive customs duties, levies, and overlapping to boost the regulatory mandates for manufacturing sector, adding that the number of taxes and levies payable to the federal, state, and local governments should also be harmonized and streamlined to a reasonable number for companies to pay.
“Government should declare
manufacturing a priority sector by providing loans at one digit to the manufacturers to boost their output and stimulate the economy,” he stated.
MAN President, Francis Meshioye, also expressed concern on the police and reforms of the government, which he said were crippling the manufacturing sector of the nation’s economy.
Meshioye, represented by by the Director General of MAN, Segun Ajayi-Kadir, noted that the government had created challenges that negatively impacted the manufacturing sector.
He appealed to the governments of both Edo and Delta states that the harassment on multiple taxation by the LGAs revenue agents and some MDAs in both states be addressed.
“We further appeal that it is made statutory that Ministries, Departments and Agencies of government in your states patronize Made-In-Nigeria goods by issuing Executive orders in that regard. This will encourage local manufacturers and also create more jobs,” he added.
He however noted that MAN discussions at the meeting would enhance its advocacy content and point to the direction government needed to follow to jointly resolve the challenges militating against the performance of the manufacturing sector.
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