Manufacturing still bedevilled by high excise duties, unsold inventory- MAN
Frank Udemba Jacobs, outgone president of the Manufacturers Association of Nigeria (MAN), has said that manufacturing challenges still manifest in the form of high inventory of unsold finished products, inadequate electricity supply, frequent increases in electricity tariff in the face of poor services from distribution companies and abnormally high interest rates.
Jacobs, who spoke at the 46th annual general meeting held by the association in Lagos last Thursday, pointed out that the sector was still bedevilled by high excise duties on some products, inadequate trade facilitation infrastructure, expensive price of natural gas, unfriendly port environment, multiplicity of taxes/levies/fees, and exorbitant cost of haulage.
Unsold inventory captures the monetary value of unsold products. Total value of unsold inventory by members of MAN in the first half of 2017 was N159.59 billion, rising to N161.53 billion in the second half.
On the Economic Partnership Agreement (EPA), which is a trade treaty between the European Union and Africa, Jacobs, who has vehemently opposed it, said Buhari deserved an applause for maintaining the position of most private sector stakeholders by not signing the EPA.
“As has been rightly established, EPA runs counter to our industrial aspirations as a nation, as clearly enshrined in the Nigeria Industrial Revolution Plan (NIRP) and the Economic Recovery and Growth Plan (ERGP) and will dismantle the industrialisation headways already made in Nigeria. We hereby recommend that this stance be maintained in the best interest of our economy and the over one hundred and eighty million Nigerians,” he counselled, at his farewell speech.
The EPA is a free trade agreement between the 15 countries of the Economic Community of West African States (ECOWAS) and the Europe, seeking to enable West African countries access the European market and vice versa, without paying tariffs. Europe is committing £ 6.5 billion every five years beginning from 2015 to 2019, including during the 20-year transition period that will end in 2035.
Similarly, Nigeria is yet to sign the African Continental Free Trade Area (AfCFTA) owing to the opposition by MAN and labour unions. It is a treaty targeted at removing barriers to trade on the continent.
Jacobs commended Nigeria’s president for not signing this trade treaty in March 2018 in order to have a wider consultation on issues involved in the AfCFTA.
“With the conclusion of the Nigerian Office for Trade Negotiations nationwide, sensitisation programme on AfCFTA and the ongoing consultations with stakeholders, we are looking forward to a robust study that will empirically reveal the potential impact of the Agreement on the Nigerian economy, guide the negotiating team in the negotiation of the protocols and annexures to the Agreement and generally reveal its compatibility with our industrial aspirations and overall economic development agenda.”
Nana Addo Dankwa Akufo-Addo, president of Ghana, who was the keynote speaker, said Africa’s biggest challenge had been its inability to transform the abundant natural resources into opportunities for creation of jobs and wealth.
“The continent boasts of young, determined and highly educated people across all sectors and yet we have not been able to get the right mix of policies to fully unearth and develop the entrepreneurial talents that abound in Nigeria in particular and on the continent,” Akufo-Addo, who was represented by Yaw Osafo-Maafo, senior minister in Ghana, said.
“We need to ensure that we have the capacity to support effective value- addition to enhance our revenues position on the international market. This calls for policy harmonisation, coordination, and effective collaboration between the public and private sectors to drive effective and time tested industrial framework to fully utilise our natural resource to the best of international expectations.”
He said there was no way the continent could achieve this if economies were not fully integrated and connected with each other and operating on the same platform with the same voice.
“Why should Ghana and Cote D-Ivoire produce 60 percent or more of world annual cocoa beans and yet earn less than six percent of the global value chain activities of the cocoa industry? Ghana and Cote D’Ivoire with their collection production of 60 percent of global cocoa beans earned only about $6.0 billion in 2016 but the chocolate in industry earned at the same time about $120 billion,” he lamented.
He wondered why Nigeria found it difficult to maximise the fruit of its oil industry for the benefit of her people, pointing out that policies must, of necessity, move in the direction of value addition, which was processing of our raw materials. He urged Nigeria to stop export of raw materials and pay closer attention to finished goods.
Aisha Abubakar, minister of state for industry, state and investment, said the federal government would continue to provide the right environment for the private sector to thrive.
The event ushered in Ahmed Mansur of the Dangote Group as the new president of MAN. A memorandum of understanding was also signed between MAN and Association of Ghana Industries (AGI).
ODINAKA ANUDU