The Manufacturers Association of Nigeria Export Group (MANEG) has raised the alarm over a deteriorating business environment that is driving up production costs and putting the manufacturing sector on the brink of collapse.
In light of these escalating challenges, MANEG is calling for immediate action to support the industry currently on ventilators and ensure its survival.
According to the export group, the economic situation in Nigeria in the period under review (2023) has made the operating environment unpleasant for exporters, epitomised by forex scarcity, high cost of production due to multiple taxation, high interest rates, predatory activities, such as smuggling, insecurity, persistent weak power supply, among others.
Chairman of MANEG, Mrs. Odiri Erewa-Meggison, in her address yesterday during the group’s annual general meeting themed: “Targeting Favourable Balance of Trade and the Role of Non-Oil Sector Export Incentives for Manufacturers,” noted that the sector is experiencing the toughest period in the history of its existence following the policy reforms of the current administration. She decried that since the removal of the fuel subsidy and increase in the energy tariff, exporters have been practically gasping for survival with increasing high costs of production, depreciating naira, forex scarcity, multiple levies and taxes, port congestion, hyperinflation growth rate, and unending insecurity, infrastructural deficiencies causing severe constraints to manufacturing operations.
On incentives for manufacturers to achieve a favourable balance of trade, she emphasised the need for the Export Expansion Grants (EEG), which will help the sector become more competitive on a global scale, considering how difficult it is to operate in the country. Applauding the Federal Government for calling for the submission of EEG Baseline Data from the non-oil exporters, she appealed to the Government to reconsider the 34 deserving exporters that were stepped down by the 9th Assembly from participating in the promissory notes programme, lamenting non-engagement with the affected parties to inform them of the reasons for the disengagements.
The MANEG boss noted that the government’s action remains a serious challenge and promised that the association will continue to press on the new administration to address the backlogs for the companies that were left out. “So the incentive or grants that the government gives is something that we really need to move forward. We see how difficult it is to operate even in Nigeria today. Talk less of exporting. You look at the high cost of manufacturing in Nigeria, the cost of funds, electricity, transportation; it’s important we get grants, as these incentives help us to break even in terms of being able to compete on a global scale. Because when we take goods out of Nigeria, we are competing with other countries outside Nigeria. And if prices are not competitive enough, you know, it’s dead on arrival, right? No matter how beautiful the goods are.”
Erewa-Meggison reeled out some other challenges that have caused the low performance of the manufacturing export sector to include the sit-at-home order in the Southeastern region, which has led to huge economic losses in terms of production and sales; insecurity ravaging the northern part of the country, which has led to low supply of local agricultural raw materials and government policies on non-oil export incentives, exchange rate policy, which have culminated in further depreciation of the naira and scarcity of forex, and hikes in the price of diesel and other energy sources.
On the macroeconomic environment of the non-oil export business, she applauded the Federal Government for the ongoing reforms, particularly for setting up the Presidential Committee on Fiscal Policy and Tax Reform to look into reviewing the policies on taxes.
She noted that the new Comptroller General of Nigeria Customs Service understands the importance of exporters remaining competitive, making sure issues of clearing and exporting are addressed at the port to reduce the congestion and the time it takes to clear goods. She emphasised the need to digitise the platform where all the relevant agencies are able to get information at the same time for seamless work. She advised that a continuous dialogue with the government and the exporters to find out the pain points and ways to address them will go a long way. “It won’t happen overnight, but we can actually start addressing them.”
By Merit Ibe, .merit@yahoo.com @The SUN
