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By Merit Ibe, [email protected]
As the world welcomes 2025, manufacturers and business stakeholders in Nigeria are calling on the federal government to hurriedly resolve policy misalignments that could undermine economic stability and business performance in the new year.
Listed as must-do items are; inflation control, foreign exchange management, fiscal discipline and others, if the economy and the citizens are to tread on a successful path.
The stakeholders are hopeful that the government will make decisive, committed choices that foster a conducive environment for sustainable entrepreneurship, driving growth and positioning the sector to regain its prominence in the global business landscape.
Nigeria’s path to economic growth and sustainable development has been compromised by inadequate attention to the numerous pressing challenges of manufacturers who are meant to be the propellers of its long-term economic agenda.
Achieving a stable rapidly-growing economy would require taking head-on the daily bottlenecks confronted by business owners within the manufacturing sector, considering its active linkages with other key sectoral drivers of the economy.
Amidst the numerous challenges, forex scarcity, multiple taxation, exorbitant interest rate, high-cost business operating environment, smuggling, insecurity, energy crisis and epileptic power supply are leading the pack.
According to the Manufacturers Association of Nigeria (MAN), the prolonged macroeconomic headwinds, despite numerous interventions by the CBN, are clear indications that excessive adoption of monetary policies is not sufficient to tackle the inherent challenges as they only provide limited temporary succour without addressing the issues of high energy prices, infrastructure deficits, insecurity, low industrial productivity and limited export diversification.
The association is of the view that the growing call for monetary-fiscal policy synergy is highly justified as it is the first step to addressing the country’s economic and structural problems.
Therefore, among several other recommendations, there is need for policymakers to expediently pause interest rate hikes to allow for an impact assessment; honour the unsettled $2.4 billion Forex forward contract to further increase market confidence and FDI; and fast-track the passage and implementation of the four tax reform bills aimed at restructuring and streamlining tax processes, establishing a unified revenue service and simplifying financial obligations for businesses and citizens.
Director General of MAN, Segun Ajayi-Kadir viewed that it is expedient that policymakers step up their games by tackling the root causes of the economic quagmire rather than addressing symptoms.
“Therefore, the fiscal authority must chart a new course in collaboration with the monetary authority to expedite the much-needed structural reforms in a highly coordinated approach.
“The achievement of a double-digit growth and a friendly macroeconomic environment will require a shift in policy focus. Monetary policy must be supported by a robust fiscal framework and comprehensive structural reforms.
Therefore, the Governor of the Central Bank and the Coordinating Minister of the Economy must facilitate strong handshake, actively engage with the private stakeholders and ensure policy coherence and proper communication.”
In this regard, to tackle the burning challenges destabilizing the economy and deviating the country from the path of a robust growth, the MAN boss recommended that the government actively adopt the following measures: “Pause interest rate hikes and conduct ex-ante and ex-post impact assessment of policies for effective control of consequences and appropriate adjustment.
“Honour the unsettled $2.4 billion Forex forward contract to further increase market confidence and promote FDI inflow.
“Review the electricity tariff hike to only 100% increase of the previous price and improve electricity % access by introducing outage compensation mechanism.
“Expedite the passage and implementation of the four tax reform bills aimed at restructuring, streamlining and establishing unified tax processes.
“Extend the Presidential Order suspending import duty and VAT on essential food items and pharmaceutical supplies to other manufacturing sectors.
“Freeze the exchange rate at N1,000/$ in calculation of import duties for production inputs, including raw materials, machines and spare parts that are not locally available.
“Categorize manufacturers as strategic users of Gas to remove the gap between what manufacturers and electricity generation companies pay per cubic foot of gas.
“Speed up efforts to decentralize the national grid through the adoption of mini-grids and the acquisition of the Supervisory Control and Data Acquisition (SCADA) System.
“Expedite the implementation of the National Single Window and establish an NSW Inter- Ministerial Committee co-chaired by private and public sectors to superintend the administration.
“Set an annual threshold for the importation of non-locally available products and set respective timelines to domesticate their production.
Ajayi-Kadir noted that there are numerous opportunities available for growth and development, including a growing domestic market, regional market and export opportunities, calling for the patronage of locally produced goods, effective use of fuel subsidy removal funds and overhaul of the power sector to enhance growth.
To unlock growth and investment in 2025, Daniel Dickson-Okezie, an SMEs expert emphasized the place of small businesses, applauding the exemption of SMEs and small manufacturers in terms of income from tax.
“There are good parts of the budget on tax that will help SMEs in particular, then small manufacturers and by extension it will spread around.
“The fact that some persons have more or less been taken off the tax net because of the levels of income, its going to help the economy.”
He noted that if the tax bill goes through and becomes an act it is going to encourage small manufacturers as well as SMEs.
Dickson-Okezie pointed out that if the new refineries are well managed, it would improve the economy.
“Now, the new Port Harcourt refinery we are told has now come on stream, if it is 100% and operating
at full capacity and if we get one more refinery on stream, then that will also improve our production.
“We have not been able to get up to our quota which is caused by theft in the sector, which is gradually being curtailed and other infrastructural issues that have reduced our oil production and all that.”
He emphasized the need to encourage the ease of doing business.
“ As SMEs leaders, we have recommended to the government about
having centralized government locations.
“I mean, you have one stop shop, one particular location in an industrial area where SMEs are under one building for easy processes, that will encourage businesses.
“Government must not fail to see that the high prices come down.
Inflation rate is still very unnecessarily high, it has to improve, it discourages businesses, reduces people’s purchasing power and when people cannot
buy whatever is produced, the SMEs will find it difficult to thrive.
“Government has to focus more on creating infrastructure.”
He urged government to implement the budget, as that has been an issue.
In the 2025 budget, the figures for the health sector in the budget estimates, the expenditure on defence and the education, show improvement in those areas.
“But then, our problem is sometimes not just budget estimates but implementing budgets. We need to work on that.
He noted that the cost of administration is a major problem in Nigeria.
“This government doesn’t seem to pay any attention to that, otherwise the president will not continue to appoint more ministers.
“The president keeps appointing people who are not adding value. The government needs to take a critical look at the cost of administration.
“We need to work on energy, the roads, railways and transport infrastructure. They are the critical areas that need attention.
“Cost of funds is a major challenge in Nigeria. Cost of funds to businesses, the manufacturing in particular they’re not finding it easy because you have to import raw materials.
“We don’t have much raw materials, most of our raw materials are imported since we cannot
produce them, we import them.
“The issue of the exchange rate is really a big blow to manufacturers that have to rely on them to a great extent.
Some governors are doing very well. Government needs the willpower to get the right things done as it cannot be speaking from both sides of the mouth. You want to reduce the cost of production yet, you don’t want to drive away corruption and you want to grow the economy, how possible is that? The right step needs to be taken for the right .”
