MAN Ranks Challenges Facing Manufacturing Sector in order of their needs

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The Manufacturers Association of Nigeria MAN’s Chief Executive Officers (CEOs) member-companies across the six geo-political zones of the country and the ten Sectoral Groups of the Association said based on the degree of intensity. In the MCCI Q1 released recently disclosed MAN members’ company CEOs identified and ranked a number of challenges confronting manufacturing operation on a daily basis. The challenges as it was presented below, ranks inadequate electricity supply and high cost of self-generated energy as first and the duo of multiple taxation and overregulation as second.

According to the report, the afore-mentioned challenges completely resonate with the ranking obtained in MCCI Q1 2019; thus, underscoring the need for Government to urgently address these challenges to return the sector to the path of meaningful growth. The full lists of ranking are below:

  • Poor electricity and gas supplies/Non-reliability of gas supply/Scarcity of Diesel/High cost of LPG
  • Multiple taxation/levies/Frivolous Demand Notices by Government Agencies
  • Over Regulation/Too many Government Agencies/Hostile regulatory regime
  • High interest rate/Difficult condition in accessing loans in Nigeria/High cost of funds
  • Poor accessibility to ports/Gridlock at the national ports/High Demurrages
  • Poor economic infrastructure/Bad roads/Poor rail transport systems
  • Difficulty in sourcing Forex/Multiple Forex widows/No Special treatment of manufacturers in sourcing Forex
  • Low patronage/Poor patronage from the Government/Low turnover
  • Counterfeiting/influx of sub-standard products/Too many uncertified products in the market
  • High inflation/High cost of raw-materials, High cost of spare parts/High cost of machines
  • Government policy inconsistency
  • Lack of skilled labour/Expensive skilled labour
  • Insecurity across the country
  • Insufficient working capital
  • Non-passage of important bills by National Assembly
  • Zero tariff on imported books/high tariff on imported printing raw-materials
  • High cost of abstracting water

In other to stimulate improved performance, generate better contribution to the Gross Domestic Product (GDP) and consciously promote sustained manufacturing growth, MAN said Government, should as a matter of priority must deliberately put in place enduring measures that will address the challenges identified by CEOs of manufacturing companies in Nigeria. In addition to recommendations, Government should consider the following:

  1. Improve basic infrastructures within strategic economic hubs nationwide, classify manufacturers as strategic users of gas, expand the roads leading to Lagos Ports and make other ports outside Lagos functional to reduce cargo traffic and stimulate economic activities in those locations;
  2. Streamline existing forex windows, make more forex available for importation of manufacturing inputs that are not locally available and provide appropriate incentives for the struggling sub-sectors;
  • Expedite the process of issuing manufacturers End Users Certificate through liaison with MAN as it is being currently worked out;
  1. Return to the January to December Budgetary calendar, improve the implementation of the Capital Expenditure component of the National budget and ensure that the oversight function of NASS is not extended to the private sector.
  2. Ensure proper implementation, monitoring and evaluation of government laws, regulations and Executive Orders;
  3. Ensure that only approved taxes/fees & levies are collected by agencies of Government and improve surveillance of the National borders to reduce the menace of smuggling, importation and sale of goods that are on the prohibition list in the open market;

Entrench better monetary policy management to reduce the current high inflation in the economy; make available long term and low interest loan facilities to the real sector.

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