The proposed 2019 budget appears to be an extension of 2018, as no new grounds were explored, the Manufacturers Association of Nigeria (MAN) has said.
The body said there is a need to properly align the assumptions of the budget with economic realities.
It, however, said some of the provisions of the budget would be very important in supporting economic activities in the coming year, adding that huge emphasis on infrastructure development, especially power, road and rail, is encouraging.
“As the budget stands, MAN opines that a lot of work still needs to be done while hoping that it will be passed with dispatch,” MAN said, in its analysis of the 2019 budget.
“In broad terms, the manufacturing sector could be in for a tough operating environment in 2019, seeing that the needed supporting policies and infrastructure have not been given sufficient priority. MAN is, however, hopeful that the capital expenditure component of the budget will be conscientiously implemented.”
The body said the N80.29 billion allocation to agriculture and rural development, which is 32.5 percent lower than N118.98 billion allocation of 2018, should have been higher.
“Agriculture development is very critical to the growth and development of any country. Agriculture is critical to industry raw-materials supply and food security in the country. It is, therefore, important to pay significant attention to the agricultural development through better budget allocation while leveraging on backward integration.”
MAN said without a better agriculture performance, it will be very difficult to achieve the economic growth and inflationary assumptions made in the 2019 budget.
It, however, commended the N15.66 billion allocation for the promotion and development of agriculture value chain across more than 30 different commodities and N2.69 billion for extension services, including other projects identified in the budget, as commendable.
The body said the N80.22 billion allocation for counterpart funding for railway projects (Lagos-Kano; Calabar-Lagos; Ajaokuta-Itakpe-Aladja; Port Harcourt-Maiduguri, among others) and the N27.12 billion allocation for rehabilitation of rail tracts and general maintenance/running of the rails system are critical.
“Global evidence has shown that no country in the world had ever fully industrialised without a robust railway system. However, no mention is made of the need to dredge the various ports outside Lagos State to decongest Tin Can and Wharf ports and reduce the cost of moving goods from ports to the factories.”
MAN said while recognising and deeply appreciating government’s efforts at carrying the private sector along on the issue of African Continental Free Trade Area (AfCTA), it is important to pay adequate and unwavering attention to the emerging issues on AfCFTA in 2019 and ensure that Nigeria’s economic interests, especially the private sector, are not only projected.
“As a necessary part of the readiness assessment and the resulting action plan, government should put in place the necessary framework to protect and boost the capacity of the manufacturing sector to thrive in the continental free trade area.”
While also acknowledging government’s recognition of the need to develop a digital economy and 4th Industrial Revolution in order to enhance productivity, MAN said safety nets were not captured in the budget and neither was a statement directed at it during the president’s budget speech.
“Nigeria’s production base faces future risks due to its weak performance in developing productivity drivers such as innovation and human capital, and this calls for closer examination and immediate action,” MAN added.
“As articulated in a World Bank report on innovation policy, governments should instead be like a good gardener — one that prepares the ground by building up human resources, fertilises the soil by boosting R&D, waters the plants through providing financial support for innovation, and removes weeds and pests by removing obstacles to innovation,” MAN stated.
ODINAKA ANUDU
