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The Manufacturers Association of Nigeria (MAN) wants attractive incentives for companies utilising the majority of the country’s natural resources (resource-based firms).
At an annual lecture organised by MAN in Abuja, Frank Jacobs, president, MAN, said the Federal Government should create attractive incentives for investors who were interested in processing abundant agricultural and mineral resources from primary produce to secondary or intermediate products, in order to successfully achieve resource-based industrial policy.
Jacobs said this would go a long way in attracting potential and current manufacturers to the use of local raw materials.
“The industrial sector, especially the manufacturing sub-sector, should be strengthened by removing all obstacles restraining the growth and competitiveness of the sector such as the indiscriminate changes in the Monetary Policy Rate (MPR) which changed as many as four times between 2014 and July 2016, with its distorting effects on the economy; the exclusion of 41 items, some of which are essential raw materials, from the official forex market as well as failure to synchronize monetary and fiscal policy actions,” he said.
According to him, these would enable the sector to be optimally productive and play its expected role of employment generation, capital mobilisation, wealth creation and technology acquisition.
“Reduction of the MPR and, by implication, other rates like refinancing and bank lending rates, as the inflationary situation in the economy, may not be purely a monetary phenomenon but could also be a result of output gap created in the real sector. Creation of special funding windows for the manufacturing sector, in view of its long-term gestation period, should be given serious consideration,” MAN president canvassed.
He said the Bank of Industry was under-funded, stressing the need to encourage export of manufactured and other non-oil products as a way of boosting foreign exchange earnings for the country while activating automatic stabilisers, especially for the industrial/manufacturing sector.
He said the review of the Export Expansion Grant (EEG), which has been going on since 2014, should be concluded so as to make incentives available to exporters as a way of encouraging export, pointing out the need to develop infrastructure so as to facilitate the country’s industrialisation efforts.
“With the current situation, however, it may not be advisable to use borrowed funds only to finance infrastructure development. The private sector should be actively involved in infrastructure development. Government should, therefore, resuscitate the Public Private Partnership (PPP) programme through the establishment of Concession Agreements under Build-Operate-Transfer (BOT) in road construction and maintenance, rail construction and maintenance,” he stated.
Also speaking, Aliko Dangote, president of Dangote Group, said economic diversification through value addition for domestic and export markets was the only way the country would recover from its present economic predicament and achieve high levels of inclusive growth over a sustained period of time.
Dangote said policy inconsistency, which had characterised the economy, often destabilised industrial production while eroding investor confidence.
He stressed the need to support manufacturers, including SMEs.
He added that government must develop industrial clusters with requisite infrastructure for SMEs, enabling them to have access to soft loans and research and development support.
ODINAKA ANUDU
