Time for action

Time for action

Editorial

 

ALTHOUGH the prognosis by the Manufacturers Association of Nigeria (MAN) on the economy are somewhat familiar, the Federal Government can ignore it only at a great peril to the nation’s economy. According to the manufacturers’ body, the business milieu is not only “becoming more hostile,” the escalating costs of doing business have rendered things unbearable. The current climate, the association avers, will inevitably lead to mass shutdown of firms in the New Year, with attendant job losses.

Speaking through its acting director-general, Ambrose Oruche, the association listed some of the problems. They include difficulty in accessing forex to import raw materials and machineries which he says will sound the death knell for their members if nothing is done urgently; the issue of prolonged border closure and its dire consequence on members’ businesses; the issue of multiple taxes and arbitrary charges; and the issue of inadequate infrastructure all of which combined, constitute a drag on their operations. Mercifully, border closure has been somewhat relaxed.

This time around, the association went beyond merely painting the usual picture of a sector in ‘near death’ situation before COVID-19 set in; it suggested ways of addressing them. On the plague of multiple taxes for instance, the body wants the government to remove all multiple taxes levied on manufacturers; the same with ministries visiting factories with all forms of charges; it wants them cautioned, to facilitate the country’s early exit from recession.

Said he: “Government should encourage manufacturers by formulating policies that are investment-friendly…the government should grant tax holiday to manufacturers during this period of general economic hardship if we must come out of recession.

He also touched on the infrastructural inadequacies and the inefficient ports system. Here, he said it was time the government paid attention to infrastructural development, particularly ports development, as in other climes where “it takes between 24 and 48 hours to clear consignments at the ports.”

For the Central Bank of Nigeria (CBN), the manufacturers’ body also has a piece of advice. It should prioritise forex to the manufacturing sector to enable manufacturers bring in needed raw materials and machineries.  The efforts, he said, “should be geared towards the production of raw materials locally”.

We could not agree more.  Unfortunately, neither the problems nor the solutions being canvassed is new. Some of them are endemic as they are structural. They are in every respect, grim reminders of the lip service paid by successive governments to them, the consequences of which the nation is reaping in full measure and which the COVID-19 pandemic has only now aggravated.

In other words, the association did not speak out of turn. To admit to the serious difficulties lying ahead for the economy is only being realistic; in the same vein, to say that the manufacturers have a critical role to play in any prospective turnaround is merely stating the obvious.

This is why it is important that government takes the manufacturers’ prognosis and suggestions seriously. For the fact of being a major force in job creation, and also a net contributor of between eight per cent and 9.5 per cent to the Gross Domestic Product (GDP), they deserve sympathetic hearing. More than that, they deserve all the help and support that the government can offer to tide them over the current difficulties. Part of that should include access to their forex needs to keep their factories running and to preserve jobs. They also require incentives, more so now that the global supply has suffered unprecedented disruption.

As we noted in an earlier editorial, it should be possible for the government, the apex bank, the manufacturers and other similar bodies to come up with a framework of collaboration to address problems holistically and in the shortest possible time to stave off the looming nightmares of factory closures and job losses. This is what the current times demand.

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