MAN Seeks Recapitalisation Of BoI And BoA To Meet Industry Credit Need 

Yemisi Izuora

The Manufacturers Association of Nigeria, MAN, has advocated for immediate recapitalization of Bank of Industry, BOI, and Bank of Agriculture, BOA, to adequately meet the industry credit need at single digit interest rate and also reversing Value Added Tax Rate.

The Group made this known in its Manufacturers CEOs Confidence Index second quarter report.

According to the Association government should recognize various challenges bedeviling the Manufacturing sector and address them so as to sustain the little improvement made in the sector in the last two quarter of 2021.

The MAN also recommended that the government should address Poor  access to forex, high cost of power, multiple taxation, Port challenges, over regulation and poor access to fund, scarcity of raw materials and low patronage.

“In view of the new CBN policy that stopped allocation of forex to the BDC segment of the foreign exchange market for operational incongruities further increased the responsibilities of  Commercials Bank in handling forex  sales and applications in the economy. It is therefore important to encourage the Banks to build more capacities through designate desks for handling the streaming  applications and Form M  to ensure seamless and timely processing  of  forex application  by manufacturers”, MAN said.

“Granting concessional forex allocation at the official forex market to manufactures for importation of productive inputs that are not locally available, unify the various forex windows in the country and allocate all available forex productively”

On High cost of Electricity/Power, the group said, the Eligible Customer initiative is a novelty among the recent electricity regulations in the country. “MAN believes that the regulation is capable of addressing to a large extent the current electricity challenge of the manufacturing sector.  Unfortunately, the Distribution Companies and their cohorts are doing everything within their powers to frustrate the initiatives.  This may have  in one way or the other been responsible for the recent call for the cancellation of the  project.   Therefore, we encourage the  Government to continue with the plan  and create a platform where all stakeholders within NESI will deliberate on the implementation of the regulation and  resolve all pending issues  that have affected the seamless running of the Eligible Customer initiative”.

The Group further tasked government on reviewing the current increment in electricity tariff, encouraging investment in the electricity value chain, Generation, Transmission and Distribution.

On Multiple taxes and Levies, it said “Publish the list of approved of the harmonized taxes and levies for the manufacturing sector by the Tax Joint Board (JTB), commence implementation of the harmonized taxes and levies project which should be monitored and enforced strictly by the Joint Tax Board, JTB”.

Speaking on over- regulation, it said, “there has been unbridled double regulation of Chemical materials   by the Standards Organization of Nigeria, SON, and the National Agency for Food and Drug Administration and Control.   We encourage the Government to streamline NAFDAC with the control of only for related chemical materials, while SON oversees non-food related ones”.

“Manufacturers also suffer unwarranted invitations on account of unverifiable accusations by the police. Recently, the Police Authorities have been harassing manufacturers on issues such as debt owed to DisCos, CO2 Emission and others that are completely out of the scope of their mandate, for rent seeking purposes. We encourage Government to explore established means of addressing industry related issues and desist from using unorthodox means that is susceptible to excessive use of initiatives and subject to abuse”, stated MAN.

The Association moved for fully implementation of the   report of the Steve Orasanye Committee on the Restructuring and Rationalization of the Federal Government Agencies, parastatal and Commissions.

“So also direct all Regulatory Agencies, especially the National Agency for Food and Drugs Administration & Control, NAFDAC, to reduce the administrative charges to manufacturing companies by 50%.

On Ports Challenges, the government is tasked on improving on the time taken to  clear  container/cargoes clearance at the ports, installing  sound  trade facilitation equipment at the ports  such as scanners, reducing the various port charges and removing  demurrage for undue delayed clearance;  Resuscitating available rail tracks and constructing new ones and  linking them to  industrial hubs.

On poor access to funds, MAN moved for recapitalization of Bank of Industry, BOI, and Bank of Agriculture, BOA, to adequately  meet the industry credit need at single digit interest rate, providing  a Credit guarantee for industrial loans from commercial banks, direct intervention from the CBN Governor  to ensure that MAN members access the funds, particularly the N1trillion COVID-19 Stimulus Package, update Manufacturers with the current feasibility  of  the N220 billion Micro, Small and Medium Enterprises Development Fund, MSMED, and N300 billion Real Sector Support Facility (RSSF) and  how they can be accessed.

Speaking on scarcity of raw- materials, the Association urged government to select strategic product for backward integration and further driving the resource-based industrialization agenda, encourage investment in the development of machines; iron and steel; petrochemical sectors to support manufacturing.

On low sales/patronage, it called on government to reverse the Value Added Tax Rate back to the pre 2020 Finance Act rate to improve the disposable income of Nigerian workers, stimulate consumption, promote an upsurge in demand and increase production output. So also monitor, evaluate and enforce the implementation of the Executive Order 003 to ensure compliance by MDAs.

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