Security, Finance Bill Amendment, Forex supply Top MAN’s Expectations From Tinubu Administration
As the incoming Bola Tinubu administration prepares to take over the rein of government, security, stable forex supply, and its unification, some provisions of the 2022 finance bill top the list of concerns to the Manufacturers Association of Nigeria (MAN).
These concerns, the manufacturers’ group wanted these to be addressed quickly to lift up confidence in the sector.
Other areas of concern to the group the bloated unemployment, stable forex supply and its unification, admission of qualified companies to eligible customers’ scheme by the Nigerian Electricity Regulatory Commission (NERC), ensuring that electronic call-up system at the Ports works to avoid congestion and amendment of some provisions of the 2022 Finance bill.
The association’s expectations are coming against the drop in the confidence in the economy by managing directors as seen in the Manufacturers CEO Confidence Index (MCCI) of the last quarter in 2022.
The MCCI is a quarterly survey to gauge the pulse of about 400 CEOs so as to know the trends in the manufacturing sector.
The last quarter of 2022 shows a decline to 55 points from 55.4 points in Q3 2022, indicating that CEOs of manufacturing industries have less confidence in the economy.
“The real issues are security and the economy”, stated Segun Ajayi-Kadir, its Director-General.
“I think that there should be a realization that the economy is in a parlous state and needs a quick rejig. We need to reset our priorities and stop the hemorrhage” he said.
He cited the key economic indicators such as the inflation rate which is now 21.91 per cent, and the disparity in the Naira exchange rate of which dollar official rate is N460 while the street’s rate hovers between N750 and N800.
The interest rate, the MPR is 17.5 per cent, while the lending rate is 27.63 per cent, to most manufacturers, the latter is the norm.
Unemployment, which is prevalent amongst the youth stands at 33.3 per cent, while the GDP annual growth rate is about 3.52%. Today, the government debt to GDP ratio is 37 per cent from 34.5 per cent last year.
He also mentioned the currency redesign, an otherwise excellent monetary control measure by the CBN, but for the inexplicable poor management of the transition process.
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The MAN’s DG also drew attention to the evident inadequate infrastructure and the myriad of macroeconomic challenges that have stunted the economy
“With this background, the new government should not be under any illusion about the need to stop the drift and hit the ground”, Segun-Kadir urged.
He advised Tinubu that when he is sworn in, should set specific deliverables to be accomplished within the first 100 days in office.
These, the MAN DG said include permanently resolving the lingering difficulties with the currency transition that has resulted in a more than 25 percent dip in sales of manufactured products.
He also asked the incoming administration to direct the CBN to prioritise the supply of foreign exchange to the productive sector, particularly to manufacturers to import raw materials, spares, and machinery that are not locally available. In addition, he urged the unification of the foreign exchange windows.
He also urged him to direct the NERC to admit all qualified applicant companies into the Eligible Customer Scheme to allow them access to power as stipulated in the Electric Power Sector Reform Act 2005 while all relevant agencies are to ensure that the electronic call-up system at ports aimed at redressing the congestion works without fail.
He also wants the incoming administration to look at the Finance Bill 2022, and amend some areas that he considers as inimical to the manufacturing sector.
These include the critical inputs of the organized private sector and especially, the jettisoning of the highly objectionable removal of the 10 percent investment allowance on the acquisition of plants & machinery (in the section 32 of the Company Income-tax Act) and also to ensure that the imposition of the 0.5 percent levy on eligible imports from third countries is limited to local goods and to exclude raw materials that are not locally available.
While he urged a definite stand on the removal of fuel subsidy, he is also pushing for a special policy initiative to address the revival of closed and distressed industries, particularly in the northeast where 60 percent of our member companies have closed.
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