MAN calls for resource-based industrialisation to beat FX crunch

The Manufacturers Association of Nigeria (MAN) says foreign exchange woes facing the country can be minimised and overcome with a resource-based industrialisation strategy.
“The issue of foreign exchange for the importation of essential manufacturing inputs is equally important, but if we tenaciously drive the resource-based industrialisation programme, this can be overcome,” Frank Udemba Jacobs, president of MAN, said at the 46th annual general meeting of the association held in Lagos.
Resource-based industrialisation refers to growing domestic industries using available local resources and raw materials.
According to Jacobs, Nigerian industries were hard hit by high energy cost and double-digit lending rates that scared away manufacturers.
He lamented lack of regular power supply to industrial zones and high interest rate, saying that they were clogs in the wheel of industrialisation in the country.
“The issue of power should be given topmost priority, as we know that without adequate and stable power, economic and social development will be a mirage,” Jacobs said.
“I can safely say that no nation has recorded significant economic development with unrestrained high interest rates. The case of Nigeria will not be different. With the prevailing double-digit interest rates, the Nigerian economy will continue to suffer decline. Therefore we recommend, as the association has done in the past and always, a single-digit interest rate of five percent,” he said.
MAN president commended the government for the review of the 41 Items, which when segmented into HS Codes became 680 items, out of which 95 are essential manufacturing inputs that are not locally available, stating that re-admission of 36 of the 95 items into the official foreign exchange market were commendable.
He further commended the government for adopting the National Industrial Revolution Plan (NIRP) of the immediate past administration and inaugurating the Nigeria Industrial Policy and Competitiveness Advisory Council. He stressed that the establishment of the Presidential Enabling Business Environment Council (PEBEC) and the Micro, Small and Medium Enterprises (MSME) Clinic were steps that would take Nigeria forward.
“The 60 percent preferential forex allocation to the manufacturing sector for importation of raw-materials and machinery that are not locally available is commendable. Added to this is the forex policy of 21st February 2017, which significantly narrowed the premium between the parallel market and the official market rates and therefore made forex more available,” he stated.
“The Special $20,000 quarterly forex allocation to SMEs for importation of vital raw-materials and machinery and the launch of the Economic Recovery and Growth Plan (ERGP) are steps in the right direction,” he added.

 
ODINAKA ANUDU