The Manufacturers Association of Negara (MAN) has issued a ten-point demand from the incoming Nigerian government following the conclusion of the first phase of elections in the country.
In a statement outlining expectations from the new administration, the Director General of MAN, Segun Ajayi-Kadir, urged the president elect to set specific targets to be accomplished within the first 100 days in office after his inauguration.
He decried the deplorable state of the manufacturing sector and the Nigeria economy in general noting that key economic indicators have weakened while the Manufacturers CEO Confidence Index (MCCI), which gauges the operators’ mindset and trends in the sector has been down since the last quarter of 2022.
In his words, “The inflation rate is 21.82% and the Naira exchanges for the Dollar officially at N460 and on the streets, which is by far the most patronized by economic actors is about N750. On interest rate, the MPR is 17.5%, while the lending rate is 27.63%, to most manufacturers, the latter is the norm.
“We have unemployment, which is prevalent amongst the youth at 33.3%, even as the GDP annual growth rate is about 3.52%. Today, government debt to GDP ratio is 37% from 34.5% last year.
“The latest addition that is disrupting the economy in a profound manner is the redesign of the national currency and the attendant scarcity, an otherwise excellent monetary control measure by the CBN, but for the inexplicable poor management of the transition process.
“In the latest survey for the fourth quarter of 2022, the aggregate index score of MCCI declined from 55.4 points in Q3 2022 to 55.0 in Q4 2022. This shows that CEOs of manufacturing industries have less confidence in the economy.”
MAN expects the new government to fix, within 100 days, the naira swap crisis, power, foreign exchange and raw material import difficulties encountered by genuine manufacturers among others.
The list of expectations of NMAN from the incoming administration is reproduced below:
“I would suggest that the President, when sworn in, should set specific deliverables to be accomplished within the first 100 days in office. A must-do list within the 1st 100 days after the swearing-in. And I will offer suggestions on those issues:
- Permanently resolve the lingering difficulties with the currency transition if it has not been completely addressed by the outgoing government. As already indicated, this has resulted in a more than 25% dip in sales of manufactured products.
- Direct the CBN and ensure that it complies with the prioritization of foreign exchange to the productive sector, particularly to manufacturers to import raw materials, spares, and machinery that are not locally available. And taking immediate and time-bound steps to achieve the unification of the foreign exchange windows.
- Direct the NERC to admit all qualified applicant companies into the Eligible Customer Scheme in order to allow them access to power as stipulated in the Electric Power Sector Reform Act 2005.
- Direct all relevant agencies of government to ensure that the electronic call-up system at ports aimed at redressing the congestion works without fail.
- Ensure that the Finance Bill 2022, if not assented to before the transition, includes the critical inputs of the organized private sector. In particular, the jettisoning of the highly objectionable removal of the 10% investment allowance on the acquisition of plants & machinery (in the Company Income-tax Act, section 32). Additionally, to ensure that the imposition of the 0.5% levy on eligible imports from third countries is limited to goods that we have capacity to produce locally and quite importantly, exclude raw materials that are not locally available. The input of the organized private sector on the CEMA bill should also be taken on board before the amendment bill is signed into law.
- Take a definite stand by ordering the removal of fuel subsidy. The decision should be outright and immediate steps should be taken to commence removal.
- Announce a special policy initiative to address the revival of closed and distressed industries, particularly in the northeast where 60% of our member companies have closed.
- Craft and announce a special policy initiative to leverage diaspora expertise and investment to address evident gaps and help to boost the performance of the economy.
- Direct all ministries, departments, and agencies of government to unfailingly comply with Executive Order 003 on the patronage of made-in-Nigeria products. In this regard, there should be a strict application of the margin of preference, effective monitoring and periodic evaluation of compliance,` and appropriate sanctions meted out to MDAs acting in breach of the executive order.
- Announce a special policy initiative to de-risk manufacturing and unleash adequate funding for the sector through effective funding of special lending windows.
The Association is desirous to see all recommendations implemented by the new administration. We believe that if the prosperity of Nigeria is paramount, then the productive sector should be given maximum priority for the general good of all in terms of wealth and job creation for the Nation.