The Manufacturers Association of Nigeria (MAN) through Manufacturers Confidence Index (MCCI) to gauge quarterly pulsation of manufacturing activities to changes in the macroeconomic ambience and Government policies. MAN, further stated that MCCI is therefore barometer used by Association to garner the perceptions of 400 Chief Executive Officers (CEOs) of MAN member-companies across the six geo-political zones and Sectoral Groups of the Association through MAN’s branch networks to determine manufacturing companies’ responses on changes in the economy.
According to the statement released for the second quarter disclosed that 400 Chief Executive Officers called on government to find way of implementing the various challenges identified in this report and also adequately address them as per the recommendations so as to sustain the little improvement made in the sector in the last two quarter of 2021, below are the recommendations:
i Poor access to forex:
In view of the new CBN policy that stopped allocation of forex to the BDC segment of the foreign exchange market for operational incongruities further increased the responsibilities of Commercials Bank in handling forex sales and applications in the economy. It is therefore important to encourage the Banks to build more capacities through designate desks for handling the streaming applications and Form M to ensure seamless and timely processing of forex application by manufacturers.
Granting concessional forex allocation at the official forex market to manufactures for importation of productive inputs that are not locally available;
Unify the various forex windows in the country;
Allocate all available forex productively
ii High cost of Electricity/Power:
The Eligible Customer initiative is a novelty among the recent electricity regulations in the country. MAN believes that the regulation is capable of addressing to a large extent the current electricity challenge of the manufacturing sector. Unfortunately, the Distribution Companies and their cohorts are doing everything within their powers to frustrate the initiatives. This may have in one way or the other been responsible for the recent call for the cancellation of the project. Therefore, we encourage the Government to continue with the plan and create a platform where all stakeholders within NESI will deliberate on the implementation of the regulation and resolve all pending issues that have affected the seamless running of the Eligible Customer initiative.
Reviewing the current increment in electricity tariff;
Encourage investment in the electricity value chain, Generation, Transmission and Distribution
iii Multiple taxes and Levies:
Publish the list of approved of the harmonized taxes and levies for the manufacturing sector by the Tax Joint Board (JTB)
Commence implementation of the harmonized taxes and levies project which should be monitored and enforced strictly by the Joint Tax Board (JTB);
iv Over- Regulation:
There has been unbridled double regulation of Chemical materials by the Standards Organization of Nigeria (SON) and the National Agency for Food and Drug Administration and Control. We encourage the Government to streamline NAFDAC with the control of only for related chemical materials, while SON oversees non-food related ones.
Manufacturers also suffer unwarranted invitations on account of unverifiable accusations by the police. Recently, the Police Authorities have been harassing manufacturers on issues such as debt owed to DisCos, CO2 Emission and others that are completely out of the scope of their mandate, for rent seeking purposes. We encourage Government to explore established means of addressing industry related issues and desist from using unorthodox means that is susceptible to excessive use of initiatives and subject to abuse.
Fully implement the report of the Steve Orasanye Committee on the Restructuring and Rationalization of the Federal Government Agencies, parastatal and Commissions.
Direct all Regulatory Agencies, especially the National Agency for Food and Drugs Administration & Control (NAFDAC) to reduce the administrative charges to manufacturing companies by 50%.
V Ports Challenges:
Improving on the time taken to clear container/cargoes clearance at the ports;
Installing sound trade facilitation equipment at the ports such as scanners, etc.;
Reducing the various port charges and removing demurrage for undue delayed clearance;
Resuscitating available rail tracks and constructing new ones and linking them to industrial hubs;
Vi Poor access to Funds:
Recapitalization of Bank of Industry (BOI) and Bank of Agriculture (BOA) to adequately meet the industry credit need at single digit interest rate;
Providing a Credit guarantee for industrial loans from commercial banks;
Direct intervention from the CBN Governor to ensure that MAN members access the funds, particularly the N1trillion COVID-19 Stimulus Package;
Update Manufacturers with the current feasibility of the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMED) and N300 billion Real Sector Support Facility (RSSF) and how they can be accessed.
Vii Unavailability of Raw- Materials:
Selecting strategic product for Backward integration and further driving the resource-based industrialization agenda;
Encourage investment in the development of machines; iron and steel; petrochemical sectors to support manufacturing;
Viii Low sales/patronage:
Reverse the Value Added Tax Rate back to the pre 2020 Finance Act rate to improve the disposable income of Nigerian workers, stimulate consumption, promote an upsurge in demand and increase production output
Monitor, evaluate and enforce the implementation of the Executive Order 003 to ensure compliance by MDAs
In conclusion, MAN disclosed that the second quarter of 2021, the normalcy and tranquility seen in the economy in the first quarter of the year was sustained as business activities increasingly rebounded from the hangover of COVID-19 pandemic. According to the report, this is corroborated by the increase in MCCI scores for the second quarter of the year to 52.9 points from 49.1 points recorded in the first quarter. The index score of 52.9 points in the quarter under review was the first it stayed above the 50-neutral point since the first quarter of 2020, it added.
Consequently, the index performance underpinned the improvement in the confidence of manufacturers on the economy, although much is still required to ensure that the current momentum in the economy is sustained and improved upon. Therefore, Association said that this report provided critical recommendations that addressed the various challenges of the manufacturing sector as identified by manufacturers in the quarter under review. “We believe that with the ardent implementation of the recommendations, there would be significant positive change in the business operating environment in the country.