By Merit Ibe
The Manufacturers Association of Nigeria (MAN) has urged the Federal Government to recapitalise the Bank of Industry (BOI) and Bank of Agriculture (BOA) to adequately meet the industry credit need at single digit interest rate.
The association, which made this known in its Manufacturers CEOs Confidence Index second quarter report, noted that the government should recognise various challenges bedevilling the sector and address them so as to sustain the improvement made in the last two quarters of 2021.
It, therefore, recommended that the government should address the following challenges; poor access to forex, high cost of power, multiple taxation, port challenges, over regulation and poor access to fund, scarcity of raw materials and low patronage.
The association said capitalisation of the BOI and BOA would also provide a credit guarantee for industrial loans from commercial banks, direct intervention from the CBN governor to ensure that MAN members access the funds, particularly the N1trillion COVID-19 stimulus package, update manufacturers with the current feasibility of the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF), and N300 billion Real Sector Support Facility (RSSF) and how they can be accessed.
On scarcity of raw materials, MAN urged government to select strategic products for backward integration and further driving the resource-based industrialisation agenda, encourage investment in the development of machines; iron and steel; petrochemical sectors to support manufacturing.
It called on government to reverse the VAT rate to the pre 2020 Finance Act rate to improve the disposable income of Nigerian workers, stimulate consumption, promote an upsurge in demand and increase production output.
“The new CBN policy that stopped allocation of forex to the Bureau De Change (BDC) segment of the foreign exchange market for operational incongruities further increased the responsibilities of commercials bank in handling forex sales and applications in the economy. It is, therefore, important to encourage the banks to build more capacities through designate desks for handling the streaming applications and Form M to ensure seamless and timely processing of forex application by manufacturers.
“Granting concessional forex allocation at the official forex market to manufactures for importation of productive inputs that are not locally available, unify the various forex windows in the country and allocate all available forex productively.”
The associated noted that on the high cost of electricity/power, the eligible customer initiative is a novelty among the recent electricity regulations in the country.
“MAN believes that the regulation is capable of addressing to a large extent the current electricity challenge of the manufacturing sector. Unfortunately, the distribution companies and their cohorts are doing everything within their powers to frustrate the initiatives.
This may have in one way or the other been responsible for the recent call for the cancellation of the project.
Therefore, we encourage the government to continue with the plan and create a platform where all stakeholders within NESI will deliberate on the implementation of the regulation and resolve all pending issues that have affected the seamless running of the eligible customer initiative.”
The group further tasked government on reviewing the current increment in electricity tariff, encouraging investment in the electricity value chain, generation, transmission and distribution.
It urged government to “publish the list of approved of the harmonised taxes and levies for the manufacturing sector by the Tax Joint Board (JTB), commence implementation of the harmonised taxes and levies project which should be monitored and enforced strictly by the JTB.”
Speaking on over- regulation, it said, “there has been unbridled double regulation of Chemical materials by the Standards Organization of Nigeria, SON, and the National Agency for Food and Drug Administration and Control.