Manufacturers’ suggestions for economic turnaround

WORRIED by the economic misery of Nigerians and the Federal Government’s seeming helplessness, the Manufacturing Association of Nigeria (MAN), last week, unfolded a number of suggestions aimed at turning the situation around. Lamenting the imminent collapse of more manufacturing companies in the country, the association, speaking through its president, Mansur Ahmed, called on the Federal Government to implement 10 measures to save the manufacturing sector and correct the lacklustre performance of the economy. Speaking at the 39th Annual General Meeting of the association held in Ibadan, Oyo State, Ahmed, who noted that in recent times the manufacturing sector had been hobbled by such challenges as the high cost of diesel and other petroleum products, acute shortage and high cost of forex, insecurity, high cost of raw materials, inconsistent government policies, high regulatory compliance cost, gridlock and inadequate infrastructure at the ports, averred that it was important for the government to prioritise allocation of forex to the manufacturing sector and mandate the Central Bank of Nigeria (CBN) to direct commercial banks to transparently process forex applications by manufacturers.

Among other recommendations, MAN called on the Federal Government to remove the 7.5 percent Value Added Tax (VAT) on diesel pending the normalisation of the international supply system. It also asked the government to quickly resolve the complexities surrounding the seamless implementation of the Eligible Customer Initiative to enable manufacturers to take advantage of the stranded electricity. Again, it demanded a reduction of port charges and removal of demurrage for unduly delayed clearance. In addition, it pointed to the imperative of improving on the time taken to clear container/cargoes at the ports by ensuring that sound trade facilitation equipment such as scanners are available, monitoring the implementation of Executive Order 003 to ensure compliance by Ministries, Departments and Agencies (MDAs), and convening a strategic meeting with key operators in the Nigerian economic space to deliberate on and craft a national strategic response to the disruptive impact of the ongoing Russian-Ukraine war on the global supply value chain and its debilitating impact on the Nigerian economy.

We think that many of the suggestions are commonsensical, being targeted at reviving manufacturing in the country. In the face of disruptions occasioned by the Russia/Ukraine war, it makes sense to come up with strategies “to ameliorate the impact of the disruption, agree on ways to assuage other pain points in the business environment, activate innovative solutions to familiar and emerging macroeconomic and infrastructure challenges.” There really is no alternative to addressing the declining manufacturing capacity in the country. If carefully gauged and well executed, the suggestions have the potential to make for the uplift of production and productive capacity within the economy, and that would be extremely pleasant news for Nigerians who currently have little or no cause for cheer. This is particularly important because a continuation of the mercenary attitude that has always ruled and characterised the running of the Nigerian economy can only lead to greater misery for the vast majority of Nigerians who are, as it were, trapped in the misfortunes that continue to befall the country. Significantly, MAN’s recipe for economic turnaround also touches on the question of insecurity, an area in which the government consistently paints a picture of surrender. It must brace itself up and address the pervasive insecurity across the length and breadth of the country decisively, taking the battle to outlaws rather than waiting for them to strike before embarking on clearance operations.

We urge the government to listen to those who are directly in charge of production within the economy and put their suggestions to work in order to spur production. An economy marked by massive production will guarantee jobs and ensure that Nigerians contribute maximally to national development. It will also guarantee investment inflows and facilitate the government’s ability to reduce social discontent. As we have said time and again, there is no other route to economic turnaround than production. The earlier the government adverts its mind to that fact using the suggestions by MAN as a template, the better for the health of the Nigerian economy.