The Manufacturers opined that the 2019 Budget has important provisions aimed at reinforcing and building on the recent accomplishment of the economy.
Nigeria’s Organised Private Sector (OPS) yesterday expressed concern that the manufacturers in broad terms could be in for tougher operating environment in 2019 with the failure of the Federal Government to address the challenges confronting the sector in this year’s budget.
The Manufacturers Association of Nigeria (MAN), while registering its apprehensions on the 2019 Budget proposal, said its assumptions were based on the fact that the needed supporting policies and infrastructure were not given sufficient priority. According to MAN, the proposed capital expenditure budget for Power, Works and Housing infrastructure was N408.03 billion, representing 26.5 per cent reduction from N555.88 proposed in 2018.
It noted that “Although the budget touched on key projects (construction of new power plants and maintenance of existing ones; rehabilitation of rail tracts; and construction/rehabilitation of roads infrastructure across the country) that will support economic activities if completed, the allocation appears insufficient in the light of the prevailing infrastructural deficit.
“Inadequate electricity supply from the national grid and the bad condition of roads across the country remain core challenges of the manufacturing sector.”
Equally, MAN said the budgeted capital allocation to the development of transportation infrastructure is N194.24 billion, indicating 26.2 per cent reduction from N263.10 billion allocation in 2018.
It stated that the N80.22 billion allocation for counterpart funding for railway projects (Lagos-Kano; Calabar-Lagos; Ajaokuta-Itakpe-Aladja; Port Harcourt-Maiduguri, etc) and the N27.12 billion allocation for rehabilitation of rail tracts and general maintenance/running of the rails system are critical.
The OPS also argued that global evidence has shown that no country in the world had ever fully industrialised without a robust railway system and lamented that no mention was made of the need to dredge the various ports outside Lagos to decongest Tin Can and Apapa ports to reduce the cost of moving goods from ports to the factories.
It added, “Technically, from the observed trends in the Nigerian budget cycle, the 2019 budget proposal might undergo late passage and the resultant negative effect on the overall economic landscape of the country might be colossal for an economy whose current growth rate is still fragile.
“The proposed 2019 budget appears to be an extension of 2018 as no new grounds were explored. There is the need to properly align the assumptions of the budget with economic realities.”
The Manufacturers however opined that the 2019 Budget tagged “Budget of Continuity” has important provisions aimed at reinforcing and building on the recent accomplishment of the economy.
It advised, “Consequently, for the budget to be effective, there is need to sustain expansionary monetary policy stance, while ensuring sufficient synthesis of monetary and fiscal policies.
“By implication, lending rate should moderate through development windows, while taxes and levies should either drop or remain unchanged and backed by incentives.”