The Manufacturing sector, like every other economic activities in the country and across the world suffered adverse shock in the first six months of 2022.
The Director General of the Manufacturing Association of Nigeria, MAN, Segun Ajayi-Kadir, stated this in the Executive Summary of H 1, 2022 Economic Review published by the Association.
He noted that while economic activities were gradually rebounding in the midst of lingering effect of COVID-19 pandemic, the Russian-Ukrainian war supervened.
“The war destabilized global commodity prices and supply chain, international financial flow and global logistics, with negative implications on manufacturing production in Nigeria, especially as the perennial challenges such as limited energy supply, limited production of local raw materials and poor administration of national ports persisted. Consequently, manufacturing output growth in the first two quarters of 2022, though positive, oscillated from 5.8 percent recorded in the first quarter down to 3.0 percent in the second quarter of the year”, he said.
The DG maintained that the current performance of the sector suggests that it is not ‘Uhuru’ and emphasizes the need for a more proactive, broad and sector focused measures to addressing both the recent challenges thrown up by the Russian-Ukrainian war and the perennial ones which he listed to include: improve the level of forex allocation to the productive sector including manufacturing leveraging on the high and sustained crude oil prices in the international market, carry out further investment in the electricity value chain and commit to adding 10000MW to the current electricity distributed in the country; Embrace and support significant development of energy mix and renewable: the country has huge potentials for Solar and Wind.
Others are restrict the exports of maize, cassava, wheat, food related products and other manufacturing inputs; suspend the 15 percent charges on imported wheat; encourage growth in domestic investment in Agriculture, incentivize investment in local development of raw materials; give attention to domestic production of Active Pharmaceutical Ingredients, API, and Basic chemicals by incentivizing investment in the area; refocus on Backward Integration and Resource-Based Industrialization and reverse the duty for Annealed Cold roll back to 45 percent from the new 5 percent.
So also commission the resuscitation of the existing national refineries to produce fuels locally; Review the gas price for domestic consumption to be in tandem the with the export price which is about $3.25 per cubic meter, 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; fully implement the Steve Oronsanye Report on the reduction and re-alignment of Government Agencies and Parastatals in order to streamline the number of taxes, levies, fees and administrative charges.
“Invest significantly in ports infrastructure including scanners, resuscitate the moribund rail tracks leading from the ports to industrials areas; Government Agencies operating at the ports should work harmoniously, particularly in the implementation of the recent migration of National list to ECOWAS CET Chapter 99; Implement the single window platform to eliminate significant human inference in the ports clearing system; Improve the time taken to clear machines and raw-materials at the national ports while making the link road accessible”, stressed the MAN DG.
“So also strengthen the Bank of Industry, BOI, and Bank of Agriculture, BOA, to adequately provide liberal finance for the manufacturing sector; avail to the productive sector the CBN non-oil export stimulation facility with liberal term and condition”, Ajayi-Kadir maintained.
He further urged the Federal Government to allow industrial policies in the country to gestate with proper monitoring and evaluation rather than jettisoning or altering them unduly frequently. Monitor the implementation of Executive Order 003 to ensure compliance by MDAs so as to boost activities in the manufacturing sector.