The Manufacturers Association of Nigeria (MAN), led by Mansur Ahmed, an engineer, recently paid a courtesy call on President Muhammadu Buhari to highlight few concerns that could be addressed in the immediate term to improve the manufacturing environment.
The group told the president that the MAN had articulated remedial measures for these challenges in the Blueprint for Accelerated Development of Manufacturing in Nigeria, which will be formally presented to him within the first quarter of 2022.
The association appreciated that the federal government had addressed some of these challenges while others are receiving the attention of the relevant ministries, departments.
They listed the immediate areas of concern to include inadequate supply of forex. Mansur said Manufacturers had been finding it difficult to source forex for importation of machines and raw materials that are not available in the country.
He said, “While we commend and support the recent CBN policy on non-allocation of forex to BDCs, we are constrained to observe that it has not translated into any meaningful improvement in supply of forex to manufacturers.
“We, therefore, request for the intervention of Your Excellency to ensure the prioritisation of allocation for the purpose of importing raw materials and vital machine and equipment that are not available locally. In addition, we request that you direct the Central Bank of Nigeria and the Ministry of Industry, Trade and Investment to engage the association to find ways of driving forex to the manufacturing sector.”
The delegation further noted that manufacturers still contended with inadequate electricity supply from the national grid and high electricity tariff from distribution companies, coupled with the enormous cost of providing alternative energy at over N72.7billion, thereby limiting the competitiveness of manufacturing in Nigeria.
While commending the government for the ongoing reform in the power sector, they implored the president to direct that the National Electricity Regulatory Commission (NERC) to remove all the bottlenecks inhibiting manufacturers access to the Eligible Customer Scheme. As a matter of policy, significant amount of the 2000 MW stranded electricity in the system can be made available to manufacturers through this scheme.
The manufacturers said limited access to long term loans and high cost of loanable funds were also jointly restraining the ability of the sector to produce at full capacity and adversely affecting the contribution of manufacturing to the gross domestic product.
The group applauded the efforts of the federal government aimed at resolving these issues through various stimulus packages, but noted that genuine and deserving manufacturers are not able to access the funds.
They recommended that a monitoring and evaluation platform involving the private sector be set up to oversight the allocation of these funds. This will ensure that the funds are judiciously allocated to genuine manufacturers who have access to these incentives.
The MAN commended the wisdom of the administration in instituting Executive Orders 003 and 005 on patronage of made in Nigeria goods and development of local content.
The association requested that ministries, departments and agencies of government be mandated to strictly prioritise the patronage of made in Nigeria items in all their purchases and contracts.
In the same vein, they urged Mr President, as the chairman of the Presidential Motoring Committee for Implementation of Executive Order 005, to direct that the Ministry of Science Technology and Innovation to inaugurate the secretariat that would implement the strategies for the executive order.
“As a test case of this initiative, we humbly request that Mr President directs the Standard Organisation of Nigeria (SON) to certify local manufacturers of LPG gas cylinders to be specifically designated as priority provider of the 10million cooking gas cylinders to be procured by the federal government for 12 states in the federation,” Mansur said.
The manufacturers also expressed concern over the imminent increase in taxes, duty rates and excise duties, particularly for food and beverages.
They noted that the concern is because the affected sub-sectors are currently groaning under multiple taxes, levies and fees from the different tiers of government and the disposable income of the average Nigerian is already eroded, causing high inventory of unsold manufactured products.
“While appreciating that government needs to generate funds to meet its rising social and economic obligations, we strongly opine that it is the tax base that should be expanded to capture the untaxed.
“The existing genuine and diligent corporate taxpayers should not be overburdened as this could be counterproductive and the envisaged increased revenue may not be realized,” they argued.
The AFCFTA agreement
The MAN president appreciated the administration for ensuring that proper consultation and sensitisation were carried out before signing the African Continental Free Trade Area AfCFTA framework agreement.
He said, “Now that we have signed, ratified and deposited the instrument of ratification at the repository, the National Action Committee (NAC) should be effectively supported to continue to vigorously engage the private sector and relevant ministries, departments and agencies of government to accelerate the putting in place of all structures required for beneficial trade.
“In this regard, we implore the government to urgently embark on the following: establish the designated competent authority that will superintend the administration of Rules of Origin and Ccmmission the automation of the Certificate of Origin, export and import documentation processes for AfCFTA transactions.”
He said government needed to sustain the implementation of policies that have helped the economy to quickly recover from recession, survive the onslaught of COVID-19 and revive other initiatives that have suddenly gone quiescent.
He said the MAN was full of expectations that government would continue to make manufacturing a centerpiece of its economic agenda and the enabler for up-scaling national output, employment and wealth creation.
“This is because of its very strong and productive link with agriculture, petrochemical and solid minerals beneficiation,” he added.
President Muhammadu Buhari, in his response, assured the manufacturers that the federal government would take appropriate measures to improve access to foreign exchange for importation of raw materials and machines that are not available locally.
He told the executives of the MAN that the relevant ministry would revisit their concerns about the increase in excise duties on the identified products and other tariff-related matters.
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