THE Association of Food, Beverage and Tobacco Employers (AFBTE), has tasked the Federal Government to walk its talk on the Ease of Doing Business, by collaborating with it in ensuring that the environment is conducive for business.
The association lamenting, among other things at its annual general meeting (AGM) in Lagos at the weekend, said the Federal Government, in most cases, through its ministries and agencies, introduced some policy measures in the year that negated the policy on Ease of Doing Business.
According to the president of the association, Mr. Patrick Anegbe, these changes include “the upward review of excise duty on alcohol, beverages and tobacco products, the proposed implementation of the Transfer Pricing Regulations, the planned ban on production of alcohol beverages in sachets and small size pet bottles, the demand by the national regulatory commission for payment in respect of sales promotion organised by companies under the guise that it is lottery, just to mention but a few. All of these threatened the existence of some businesses in our industry.”
He lamented that the influx of imported finished products was driving member companies out of business.
Anegbe declared that the industry was troubled due to the influx of imported finished products that have negatively affected the patronage of locally manufactured products and eroded the profit margins of members.
Giving the 2018 annual financial report to members, he said, “the business operating environment in the year under review experienced the usual challenges, which took its toll on companies. Despite coming out of recession as announced by the Federal Government in the third quarter of 2017, the Nigerian business environment still remained fragile and weak in the course of 2018.”
He noted that the sector suffered 7.0 percent decline in pre-tax profit because of the slow pace of a recovery in the economy, delay in passage of the 2018 budget and insecurity in some parts of the country, which constrained business operations in the area.
He added that, “There was also the issue of contraction in yield from Federal Government debt instruments, which affected accessibility to funds from the banks.
“According to National Bureau of Statistics report, the country’s annual gross domestic product (GDP) growth rate in 2018 witnessed a slight improvement. It stood at 1.93 per cent, compared to the 0.82 3per cent recorded in 2017. A breakdown of the 2018 GDP figures on quarterly basis shows that in the first quarter it was 1.95 per cent, but this was still lower than the Q1 figure. The performance in Q4 of 2.38 per cent was the best in the year. The growth was essentially driven by the non-oil sector of the economy, particularly services. The non-oil contribution was consistently on quarterly basis above 90 per cent in the year under review. This did not take the overall GDP performance for the year beyond 1.93 per cent.
“With respect to manufacturing, Q1 of 2018 recorded a 3.39 per cent growth compared with 1.36 per cent for the same period in the previous year. In Q2, it was 0.68 per cent compared with 0.64 per cent for the same for the same period of 2017. In Q3of 2018, the sector recorded a 1.92 per cent growth compared to -2.85 per cent drop for the same quarter in the previous year. By the last quarter of the year under review, the manufacturing sector recorded a 2.35 per cent growth compared with a paltry 0.4 percent for 2017. The implication of this data is that the manufacturing sector as usual did not significantly do better in 2018.
“Furthermore, consumer price index (CPI) and inflation rate, which was on the downward trend for most part of the first half of the year went up slightly to 11.23 per cent in August 2018 from 11.14 per cent in July. It went further up to 11.28 per cent in September and by December 2018, it stood at 11.44 per cent. In March this year, it had gone down to 11.25 per cent. The obvious fact from these figures is that some measure of instability is still being witnessed in this aspect of the economy.”
On infrastructure, Anegbe stated that the recurring issue of infrastructural decay was still evident, as many businesses struggled to survive in the year.
He said government’s effort at the federal and State levels in this critical area was not too impactful.