Manufacturers want 2016 budget signed to hasten infrastructure financing
Nigeria’s manufacturers say President Muhammadu Buhari should assent to the 2016 budget to accelerate infrastructure financing and industrialisation.
They say an implementation of the budget, which allots huge funds to infrastructure, will likely solve the biggest challenge facing real sector players in the country.
“Economy has been very, very bad,” said Frank Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN), while addressing journalists after the 289th council meeting in Lagos.
“Part of the problem is that the national budget is taking a long time to be approved and assented to. We hope that government will hurry up and get it assented to, so that they can begin to implement that budget, because it will truly, I believe, change the economy of this country,” Jacobs said.
“A huge sum was allocated to infrastructure, and you know the major bane of industrialisation in the country is poor infrastructure. In our discussion today (last Thursday), members looked at that and complained that power supply is still very poor and is affecting them negatively. The state of our roads is nothing to write home about. The railways that should be able to convey goods at relatively cheaper costs are still not working. It is our hope that when the full implementation of this budget starts, some of these challenges will be addressed,” he said.
Africa’s largest economy has been hard hit by oil price lows, which have cut foreign exchange availability in the economy and hurt the Naira.
The central bank has embarked on capital control measures to ameliorate the impact of forex scarcity and reduce the country’s overdependence on imports.
The manufacturers who import inputs have been the worst hit, with the central bank barring 41 items from the official forex market and firms seeking same in parallel and black markets. Many manufacturers have struggled to get forex with which to import inputs, as many of them source FX from parallel and black markets to keep their factories afloat.
This has hurt revenues and profits, causing a lot of disruptions and delays at factories.
According to the Lagos Chamber of Commerce and Industry (LCCI), and Kaduna Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA), manufacturers lost N1.46 trillion to forex hiccups between July and December 2015.
“I want to report to you today that our members said during our meeting that the Central Bank of Nigeria (CBN) has been allocating foreign exchange to them,” Jacobs disclosed.
“They may not be getting exactly how much they need, but they now get something every week. Apart from the 41 items that are not valid for forex, members of all the ten sectors reported that they have been getting forex allocations, unlike what the case was before,” he said.
MAN’s president also debunked claims that made-in-Nigeria products are inferior to foreign, stressing that the drive for the patronage of locally made goods has just begun.
According to him, the products of any manufacturer must meet acceptable standards before he/she is accepted as a member of the Manufacturers Association of Nigeria ( MAN).
“In this country we have a memorandum of understanding ( MoU) with the Standards Organisation of Nigeria (SON), such that any MAN member must ensure that any product they make in Nigeria meets standards. Similarly, those in food and drugs have NAFDAC, which has quality parameters they have to meet. So no manufacturer who is a member of MAN can produce substandard products,” he explained.
He said the association would organise made-in-Nigeria exhibition in Abuja next month, as part of the drive to get Nigerians to buy made-in-Nigeria products.
He expressed optimism that, with the level of attention the made-in-Nigeria hype is getting in the public domain, there would certainly be an awakening of the consciousness of Nigerians on the need to buy locally made products.
“In the past we have always loved to patronise foreign products. Each time you patronise foreign products, you export employment and import unemployment. Of course if we begin to patronise made-in-Nigeria products, our industries will grow and they will be able to cater for the local market and also export,” he noted.
Jacobs said Nigeria’s manufacturers are peeved by multiple taxes they pay across the country.
“When a company carrying products from one local government to another ends up paying the same taxes and levies it has paid before, that kind of situation cannot help industrialisation. We are appealing to government to harmonise the taxes in this country. There should be a one-stop shop where taxes are paid. The moment you pay those taxes you can do your business anywhere in the country and nobody will harass or disturb you,” he added.
ODINAKA ANUDU