The Manufacturers Association of Nigeria (MAN) has said the inventory of unsold finished manufactured products has risen to an all-time high of about N402.4 billion.
President of MAN, Engineer Mansur Ahmed, in his 2020 AGM media briefing said the high inventory confirmed the reality that the disposable income of the consumers has been grossly eroded.
Ahmed said manufacturers are still inundated with numerous demands from the tiers of Government in form of taxes, levies, fees and permits among others.
He also said the members are overwhelmed with multiple regulations from different regulatory agencies and excessive drive for revenue by government agencies.
The association’s head also revealed that manufacturers spent over N67.38bn on self-generated electricity and that it took over 38 per cent of production cost in 2019.
Ahmed said some of the challenges that have mostly impacted manufacturing concerns as contained in the feedbacks from the MAN CEOs Confidence Index report.
He said inadequate electricity supply and incessant increases in tariff without commensurate improvement in power generation, transmission and distribution remain key challenges to manufacturers.
He however stressed the need for a massive metering scheme and improved efficiency in power supply. “People should be made to pay for only electricity consumed.”
He said manufacturers are increasingly finding it difficult to source foreign exchange for the importation of raw materials, machinery and spares that are not available locally.
MAN also urged the Government to reduce the financial pressure on companies occasioned by COVID-19 by compensating manufacturing concerns that are forced to shut down with 60% of employees’ salaries for at least three months to prevent mass sack.
He said manufacturers that are investing in order to scale up production should be granted loans at 5% interest rate for a period of five to seven years.
He urged the Central Bank of Nigeria (CBN) to extend its COVID-19 Stimulus packages to manufacturers not covered by existing CBN initiatives.
“They should extend timelines for filing and paying taxes including excise duty with a provision that it should be based on sales and not production by six months after the economy returns to normalcy.
Ahmed also called for the reversal of the Value Added Tax rate back to the pre 2020 Finance Act rate and reduce the Personal Income Tax to a flat rate of 10% for one-year effective April 2020.
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