Non-inclusiveness of past reforms stifled manufacturing sector – MAN
The Manufacturers Association of Nigeria (MAN) has said that the inability of previous governments to carry stakeholders along while formulating key reforms hit the manufacturing sector hard.
MAN said abrogating some policies mid-way and absence of appropriate linkages between the various sectors of the economy, such as agricultural, solid minerals and forestry to produce needed raw materials, also stifled the growth of the manufacturing sector.
Frank Udemba Jacobs, president of Manufacturers Association of Nigeria (MAN), said non-adoption of resourced-based industrialisation and consequent over-reliance on imported raw materials retarded the growth of the real sector in Nigeria.
“The various reforms were helpful in the industrialisation process and in the transformation of Nigeria from an agrarian community to a semi-industrial economy as is evidenced by the growth of the manufacturing sector,” Jacobs said at a convocation lecture at Federal Polytechnic, Ilaro, Ogun State on November 14.
He, however, said non-inclusiveness, poor sector linkages, and neglect of resource-based industrialisation made the reforms unhelpful to the real sector.
Evidence shows that past governments in Nigeria initiated various forms of tax holidays, tariff protections and export Incentives. There were also recent reforms such as the Banking Sector Reform of 2004, Taxation Reform, Trade facilitation Reform, Power Reform Act, Gas Sector Reform, and Railway Modernisation Reform, among others.
However, manufacturers who needed gas, power, funds and railways were excluded from most of the reform processes, resulting in various forms of disagreements.
Up till today, manufacturers and private sector electricity distribution companies are in court over the tariffs. Similarly, manufacturers who make use of gas are battling with gas suppliers over how much they need to pay for the product ($8 per scq currently).
Manufacturers are also locking horns with government agencies on issues such as taxes and levies.
The manufacturing sector contributes about nine per cent to the gross domestic product currently. The sector grew by 21.8 per cent in 2013 and 14.7 per cent in 2014. Its contribution to real national output was 9.2 per cent in 2013 and 10.0 per cent in 2014. The sector created over 74,000 jobs in the economy from 2013 to 2015. However, it is hurt by foreign exchange scarcity needed to import inputs. It is also hard hit by poor infrastructure, and lack of credit access.
According to Jacobs, empirical evidence indicates that most industrialised nations of the world are strongly associated with high per capita income and good quality of life, which is made possible by the vibrancy of their manufacturing sectors that create multiple job opportunities for their people.
He pointed out that the robustness of manufacturing production in the high income economies was not achieved by chance, but with deliberate policy actions that were effectively implemented by government on their manufacturing sector.
“Manufacturing sector in these economies, to a large extent, has government concessional access to developmental credits and energy supply as well as Government procurement,” he said, while speaking on a topic entitled, Entrepreneurship as a Catalyst for the Growth of the Manufacturing Sector in Nigeria’.
He stressed the need for governments at all levels in Nigeria to emulate developed economies to grow the industrial sector amid economic slow-down.
ODINAKA ANUDU