MCCI also measures changes in key
macroeconomic indicators including sector specific factors that represent
Government activities and policy measures in the economy. Consequently, the
effects of movements in Foreign Exchange, Lending Rate, Credit to the manufacturing
sector and Capital Expenditure of the Government were also measured. In
addition, it gauges the outcome of changes in business operating environment
factors which include Over-regulation, Multiple taxes/levies, Access to
seaports, Local raw-material sourcing, Government patronage of Nigerian
manufactured goods and Inventory of unsold manufactured products.
MCCI covered 400 Chief Executive Officers
of MAN member-companies across the six geo-political zones and Sectoral Groups
of the Association through MAN’s branch networks. Since the first edition, MCCI
has consistently provided experiential bases that are critical to strengthening
the evidence advocacy dogma of the Association.
The report indicated that manufacturing
performance for the year under review is still below the mark, notwithstanding
the marginal improvement in the operating environment during the quarter under
review, as the sector is still plagued by numerous familiar constraints adding
that some of these challenges enumerated by manufacturers are clearly presented
in this report.
Consequently, it was reported that in order
to improve the performance of the sector, Government needs to intentionally put
in place mechanism that will address these challenges permanently by considering
and implementing the following recommendation:
Further incentivize investment in the
development of raw-materials locally through the Backward Integration and
Resource based industrialization initiates. Government should call for more
investor to key into these initiatives with appropriate and definite
incentives. For instance, there is need for urgent investment and production of
Active Pharmaceutical Ingredients (API) in the country; investment and
production of machines; iron and steel; petrochemical materials, etc to support
manufacturing activities.
Give specific attention to the security of
life and investment in industrial areas; properly delineate and upscale
security infrastructure in the various industrial areas in the country, particularly
in the northern part of the country for priority attention. Government should
also quickly invest in modern security such as drones, camera, etc. for robust
monitoring of the areas.
Ensure effective allocation of available
forex to productive sectors, particularly the manufacturing sector for
importation of raw materials and vital machine and equipment that are not
available locally. Government also needs to expressly direct the Central Bank
of Nigeria to consult with the Ministries of Industry Trade & Investment
and effectively engage MAN on measures for improving forex supply to
manufacturing concerns.
Direct the Ministry of Science Technology
and Innovation to inaugurate the Secretariat that will implement the strategies
for the Executive Order and SON to designate local manufacturers of LPG Gas
Cylinders as priority provider of the 10 million Cooking Gas Cylinders to be
procured by the Government for 12 States in the Federation.
Return Milk and other Dairy Products to the
National List in the Fiscal Policy Guidelines to maintain consistency with the
Backward Integration Programme, which has spurred heavy investments in the
diary production.
Unify academic curriculum with industrial
skill needs and requirements to guarantee sustainable development of skilled
manpower for the industries. Government should as a matter of urgency
synchronize the curricular of tertiary institutions, particularly the
Polytechnics with skills requirements of industries. The various government vocational and
training centers should also be re-engineered to offer those skills that are
needed by the industries.
- Revisit the resuscitation of the existing national refineries to produce fuels locally, embark on the rehabilitation of major highway corridors, improve trade facilitation infrastructure and deepen the ongoing development of rails system to change narrative on operating environment from being high cost to low production cost environment.
- Government should ensure that industrial policies in the country are allowed to gestate with proper monitoring and evaluation rather than jettisoning or altering them unduly frequently. The continuous infractions on the original EPZ and tariffs for the Motor Vehicle and Assembly sector should be quickly remedied to the development of the zones and motor vehicle assembly in the country.
Other recommendations include the
following:
- Sustain the Eligible Customer initiative to ensure that more electricity is supplied to the manufacturing sector;
- Strengthen the Bank of Industry (BOI) and Bank of Agriculture (BOA) to adequately provide liberal finance for the manufacturing sector;
- Monitor the implementation of Executive Order 003 to ensure compliance by MDAs so as to boost activities in the manufacturing sector;
- Publish the list of approved harmonized taxes and levies for the manufacturing sector by the Joint Tax Board (JTB) to address the issues of multiples taxes and levies;
- Rationalize Government Ministries, Departments, Agencies, parastatal and Commissions to resolve the issues of over-regulation and duplication;
- Improve the time taken to clear machines and raw-materials at the national ports while making the link road accessible;
In conclusion, the report said the fourth
quarter of 2021 highlighted a gradual improvement in the macroeconomic economic
and manufacturing operating environment buttressed by marginal recovery of some
key manufacturing indicators. Although, the report further noted that changes
in almost all manufacturing indicators as measured in this report are still not
as desired, the performance in the fourth quarter is better than what obtained
in the preceding quarter.
“The resilience of manufacturers, the
seasonal transactions and passive policy support sustained manufacturing in the
quarter despite the prevalence of familiar and emerging excessive tax related
challenges faced by manufacturers.
“Overall, the sector recorded a mixed
grilled performance occasioned by meagre improvement in the operating
environment indices and macroeconomic ambience evidenced by the high points,
which cumulatively triggered the increase in the aggregate MCCI score for the
quarter to 55.4 points from 54.0 points recording the preceding quarter.
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