The Manufacturers Association of Nigeria (MAN) has listed some crucial policy and investment measures that the Federal Government should immediately consider for implementation in order to sustain the growth of the economy in the years ahead.
The association, in its position paper on Nigeria’s 3rd Quarter Gross Domestic Product (GDP) just published by the National Bureau of Statistics (NBS), flawed the current stringent conditions required by Small and Medium Enterprises (SMEs) to access funds, and advocated the creation of a special credit window for the SMEs’ owners to access credit needed to grow their enterprises.
For instance, the organized private sector (OPS) group suggested that the Government should recapitalize the Bank of Industry (BOI) to meet the growing credit demand of industries.
It also stressed the need to enhance credit information systems and broaden the scope of assets for collateral.
The association clarified: “It is critical to create special windows for providing single-digit interest rates to productive sectors and relax stringent conditions for SMEs to access funding.
“The Government must also recapitalise the Bank of Industry (BOI) to meet the growing credit demand of industries”, it added.
While noting that Central Bank of Nigeria (CBN)’s monetary policy rate (MPR) hikes have raised the cost of credit in the banks, it lamented that manufacturers were obtaining loans from deposit money banks at an average interest rate of 28.1% as of H2 2023, thereby causing them to record an estimated loss of
N341 billion over the period.
To mitigate the current challenges of manufacturers, the association advised the government to retain the current excise duty of N10 per liter on non-alcoholic beverages to avoid shutting down the industry.
It stated: “It is important for the government to direct the Central Bank of Nigeria to clear $2.4 billion outstanding dollar obligations on FX forward contracts to support manufacturers.
“There is also a need to review import duty rates for production inputs, particularly those not locally available, and consider pegging the rate at N800”, the OPS group added.
In addition, the association urged the Government to implement measures to streamline customs’ procedures, including increased use of technology and decentralisation of seaports, and prioritize budgetary allocation for infrastructure development, especially along strategic economic hubs, while encouraging public-private partnerships for infrastructure development, including roads, railways, and port access roads.
On the issue of surging electricity tariffs, the MAN canvassed: “The government must direct the Nigerian Electricity Regulatory Commission (NERC) to review the excessive increase in electricity tariffs for Band A customers. The government must prioritise domestic gas supply to manufacturers and enforce Naira-denominated pricing.
“There is also a need to ensure transparency in electricity tariff charges, invest in infrastructure and efficiency improvements by Distribution Companies, and introduce outage compensation mechanisms”, it added.
