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By Merit Ibe
The Manufacturers Association of Nigeria (MAN) has sought the Federal Government’s support to overcome the binding constraints to competitive manufacturing in the country.
President of the association, Mansur Ahmed, made the appeal during the advocacy visit to President Muhammadu Buhari recently, where he enumerated the challenges confronting the sector to include, but not limited to, inadequate supply of forex, electricity, looming increase in tax rate, poor access to long term fund, low patronage of made in Nigeria goods, among others.
Applauding the president for the numerous initiatives, reforms and policies that have helped to steady the course of manufacturing, Ahmed added that government, however, needs to sustain the implementation of policies that have helped the economy recover fast from recession, survive the onslaught of COVID-19 and revive other initiatives that have suddenly gone quiescent.
He noted that MAN expects that government will continue to make manufacturing a centerpiece of its economic agenda and the enabler for upscaling national output, employment and wealth creation.
Ahmed who commended the progress made in infrastructure development; various reforms on the Ease-of-Doing-Business and exemplary leadership in curtailing the spread of COVID-19, emphasised that manufacturers still contend 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.
This, he said, has limited the competitiveness of manufacturing. “While commending the government for the ongoing reform in the power sector, we implore your Excellency to direct that the NERC should remove all the bottlenecks inhibiting manufacturers access to the Eligible Customer Scheme.”
On poor Access to long term, Ahmed said limited access to long term loans and high cost of loanable funds are also restraining the ability of the sector to produce at full capacity and adversely affecting the contribution of manufacturing to the Gross Domestic Product.
He recommended that a monitoring and evaluation platform involving the private sector be set up to oversee the allocation of these funds to ensure that the funds are judiciously allocated to genuine manufacturers who need the incentives.
The MAN boss emplored the government to urgently establish the designated competent authority that will superintend the administration of Rules of Origin and Commission the automation of the Certificate of Origin, export and import documentation processes for African Continental Free Trade Area (AFCFTA) Agreement, transactions.
On the looming tax rate, he said 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, he opined that it is the tax base that should be expanded to capture the untaxed.
“The existing genuine and diligent corporate taxpayers should net be overburdened as this could be counterproductive and the envisaged increased revenue may not be realized.”
