•Healthy development –MAN
By Merit Ibe
Nigeria’s newly inaugurated president, Bola Ahmed Tinubu, has promised to boost the nation’s economy through an industrial policy that will utilise the full range of fiscal measures to promote domestic manufacturing and lessen import dependency.
He also assured local and foreign investors that his government will review the menace of multiple taxation and other anti-investment inhibitions. Tinubu made the disclosure yesterday in his inaugural address as the 16th President of Nigeria.
He said: “ On the economy, we target a GDP growth of 6 per cent and significantly reduce unemployment. “We intend to accomplish this by taking the following steps:
“First, budgetary reform stimulating the economy without engendering inflation will be instituted.
“Second, industrial policy will utilise the full range of fiscal measures to promote domestic manufacturing and lessen import dependency.
“Third, electricity will become more accessible and affordable to businesses and homes alike. Power generation should nearly double and transmission and distribution networks improved. We will encourage states to develop local sources as well.
“I have a message for our investors, local and foreign: our government shall review all their complaints about multiple taxation and various anti-investment inhibitions.
“We shall ensure that investors and foreign businesses repatriate their hard earned dividends and profits home.
“We shall remodel our economy to bring about growth and development through job creation, food security and an end of extreme poverty.” The president also announced the end of fuel subsidy regime and called on the Central Bank of Nigeria (CBN) to immediately work for a unified exchange rate regime.
Reacting to the promises, the Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir said it was highly commendable and an assurance of better days ahead to hear the President saying that his industrial policy will utilise the full range of fiscal measures to promote domestic manufacturing and lessen import dependency.
“For me, this is a positive development. It is an unmistakable indication of a far sighted strategic choice. One that is borne out of a deep reflection over the current inclement manufacturing environment and the need to stop the drift into inglorious de-industrialisation of the Nigerian economy.
“What is most gratifying is that it came from Mr. President from day one. The issues of multiple and often times punitive taxation; conflicting and contradictory fiscal and monetary policy measures; skewed and poor management of the foreign exchange regime and the long overdue stoppage of the fuel subsidy were addressed in the President’s speech and I believe they resonate with manufacturers in particular and the business community in general.
On the call for a unified exchange rate by Tinubu, Ajayi-Kadir opined that a marching order is needed to move the Central Bank towards achieving that.
“I am glad that Mr. President was very clear on this. We also expect that, in line with his promise to enable a supportive fiscal policy regime, Mr. President will order a reversal of the unwarranted violation of government‘s three-year excise escalation roadmap on alcoholic beverages and tobacco. As we have shown, the latest hike as contained in the 2023 Fiscal Policy Measures is not only going to ruin the affected sectors, it will be counterproductive for government revenue in the near future. Our infrastructure has remained inadequate and so the ongoing efforts of government has to be intensified and this again was mentioned by the newly inaugurated President.
On his part, Director, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, welcomed the position of Tinubu on fuel subsidy removal.
He highlighted the enormous potential benefits of the removal to include revenue effect.
“The removal would unlock about N7 trillion into the federation account. This would reduce fiscal deficit and ultimately ease the burden of mounting debt.
“Second, is the investment effect. Currently It is extremely difficult to attract private investment into our petroleum downstream sector because of the unsustainable subsidy regime and the stifling regulatory environment; will eliminate the distortions and stimulate investment.
“We would see more private investments in petroleum refineries, petrochemicals and fertiliser plants. Post subsidy regime would also unlock investments in pipelines, storage facilities, transportation and retail outlets. We would see the export of refined petroleum products petrochemicals and fertiliser as private capital comes into the space. Quality jobs will be created.
“There is a foreign exchange effect. This would result from the import substitution as petroleum products importation progressively decline. This would conserve foreign exchange and boost our external reserves.
Applauding the emplacement of a unified exchange rate regime, Dr Yusuf said it was not a devaluation proposition rather, adding that it is a pricing mechanism that reflects the demand and supply fundamentals in the foreign exchange market which allows for rate adjustments as and when necessary.
“It is a model that is predictable, transparent and sustainable. It is a policy regime that would reduce uncertainty and inspire the confidence of investors. It is a policy framework that would minimize discretion and arbitrage in the foreign exchange allocation mechanism.”