By Merit Ibe
Stakeholders in the real sector have said their expectations from the Federal Government in 2021 is for better infrastructure: stable power, good road network and the situation at the borders should be addressed for ease of doing business chain to be restored.
Chairman, Non-Metalic Mining, Manufacturers Association of Nigeria (MAN), Mallinson Ukatu, noted that manufacturers were producing under excruciating environment following inadequate power supply which has increased demand for gas as alternative source of power generation.
He expressed concerns over the increase in the price of gas, lamenting that this was coming when the global economy was faced with a huge challenge.
Ukatu expects government to give manufactureres stable power to reduce the high cost of gas and give palliative to manufacturers to cushion the resultant effect of the pandemic instead of the price of the commodity going up.
“The pandemic is not peculiar to Nigeria, it is ravaging the global economy.”
The MAN boss, who decried that gas gotten from our soil is being sold in dollars, pleaded with government to reverse the trend so that they can pay in Naira.
“We have been complaining that we are being charged in dollars for consuming gas locally and nothing has been done to reverse the ugly trend. I have been complaining about this over the years at the parent organisation (MAN) for a long time that the trend should be reversed.
“We are being charged according to exchange rates. Now that the exchange rate has gone up, following the technical devaluation of the Naira, and scarcity of Forex, it has increased.”
Ukatu said the current price of gas has pushed the cost of production up by over 45 to 50 per cent, stressing that manufacturers were losing huge amount on daily bases.
“Anytime there is devaluation of the Naira, the cost of gas increases and gas takes about 45 to 50 per cent of cost of production; so, you can imagine how the cost of gas affects our production. We are like importers even when we are into production. Our sales are in Naira and not in dollars.
“A lot has to be put into production apart from gas. Infrastructure, poor road network, poor ports facilities need to be addressed.
“A road of about 20 kilometres cannot be fixed in four-years, it’s a joke.”
He urged the government to partner the private sector so that these roads can be constructed for better business environment. He pointed out that irrespective of the cost of production going high, the cost of moving raw materials from mining site to the factory was extremely expensive due to inaccessible roads.
Government should look into the issue because manufacturers have been kicking against it for years. Government promised to look into some sectors like textiles industry to remove the cost of gas price, but that has not been implemented.
“In 2019, we were advised not to pay the actual gas bills that the government has given some incentives to some sectors like the textile sector. So we asked a question, why was textile the only considered sector while there are other sectors that are purely producing made-in-Nigeria goods which are neglected. Textiles should not be the only industry, it should be generalised so all gas users and manufactures can gain and have a good price.”
For his part, Chairman of MAN Export Group (MANEG), Ede Dafinone, said it was becoming difficult to import goods, raw materials and equipment through the borders without excessive delays and unnecessary charges, which do not allow manufacturers keep their cost, compared with others around the world. “That will be my first expectation. Government should address the issue.”
Dafinone, who decried government’s use of taxes to fund the formal sector, implored the government to use those taxes to capture more of the informal sector, saying manufacturers, industries, and others are bearing an unfair share of the tax revenue to the benefit of those that are not within the circle.
The MANEG boss also believes government should critically examine those sectors they want to incentivise and ensure the incentives they are giving with their left hand are not taken back by the right hand.
“So, a situation where government gives incentives to set out new manufacturing or production facilities, should be re examined and know how these incentives are managed in order to get the best result for the country.”
Lagos Chairman of National Association of Small Scale Industries (NASSI), Gertrude Akhimien, urged the Federal Government to implement its past promises to improve the real sector for better.
The promises, she said. include tax waivers and deductions for Micro Small Medium Enterprises (MSMEs).
With the reopening of the borders, she advised that it is important for the Nigerian Customs Service to be revitalised; new systems should be built for a better and sound system to be in place, upgrade of the screening of goods and raw materials coming into the country to be able to differentiate between legitimate and illegitimate imports.
She also opined that the government should give incentives to Customs’ personnel to motivate them to work better. The NASSI boss suggested that the Customs personnel should be evaluated so as to flush out bad and redundant ones and retain the good ones for a better performance at the borders. These, she said, would improve activities at the borders, check goods efficiently to curtail smuggling of illegal goods.