Manufacturers Urge Govt To Lead By Example, Prioritise Made-In-Nigeria Products This Year
By Abimbola Abdullah
The Federal Government has been urged to lead by example and give priority to patronage of made-in-Nigeria product in all its purchases and for all government contracts and projects.
The Manufacturers Association of Nigeria (MAN) in its Outlook for the year 2024, enjoined government to mandatorily upscale patronage of made in Nigeria products by deliberately reducing the excessive reliance of the country on imported products.
“The three tiers of Government should enforce the implementation of the Executive Order 003 in same for their ministries, departments and agencies and government should encourage local sourcing of raw materials through comprehensive and integrated incentives to address the challenges of low productivity and imported inflation,” it added.
To improve the sector in the year, MAN recommended that government should expend cost saving from fuel subsidy to deploy a bouquet of production focused policies, backed with more structural measures to combat the peculiar inflationary pressures from insecurity, energy and transport cost; and overhaul the power sector and incentive investment in renewables to boost electricity generation and promote energy-cost efficiency.
It also called on government to utilize the 2024 budget to sustain effort at improving infrastructural developments, especially in strategic industrial hubs to reduce operation and logistics cost and promote competitiveness, encourage sub-national governments and private investors to leverage the opportunities provided by the Electricity Act 2023 to improve energy security in Nigeria.
The manufacturers also called on government to maintain all measures to boost the level of liquidity and degree of transparency in the official forex window even as the backlog of $7 billion forex obligations is being cleared.
It further called for efficient management of the floating exchange rate system within an acceptable lower and upper bound, pending the actualization of a net-exporting economy aspirations and prioritize forex and credit allocation to the manufacturers, stressing the need for reduction in the number of BDCs into large and well-established operators to curb their excesses and untowards operations through effective management and supervision.
MAN however recommended encouragement of inflow of foreign direct investment into pre-determined and domestic production-enhancing businesses.
It also enjoined government to mobilize commercial banks to intentionally provide long-term single digit interest loans to the manufacturing sector to fast-track the actualization of a $1 trillion dollar economy.
Drawing from likely economic dynamics, the manufacturers projections for the manufacturing sector in 2024 includes that: the government will see the manufacturing sector as the key driver of sustained economic growth and will give the sector the priority that it deserves and in 2024.
“Sectoral real growth is expected to hit about 3.2 percent; contribution to the economy will most likely exceed 10 percent and the manufacturers’ CEOs Confidence Index is predicted to rise above 55 points thresholds by the end of Q4 2023,” it added.
The manufacturers also projected that an average capacity utilization will still hover around the 50 percent threshold as the forex-related challenges and high inflation rate limiting manufacturing performance may linger until mid-year.
“The sector may experience a meager improvement in manufacturing output as forex and interest rates-related challenges are expected to subside from the third quarter, higher manufacturing output is envisaged from the beginning of the third quarter of the year as the government disburses capital provisions of the budget to abandoned,” it projected.
The manufacturers further noted that the ongoing tax reforms and the envisaged bank recapitalization will frontally address the challenges of multiple taxation and poor access to credit that have continued to limit manufacturing sector performance, if successfully implemented.
It expects that dynamic implementation of the Electricity Act 2023, which will increase private investment in renewable energy, enhance energy efficiency and improve electricity supply to the manufacturing sector and the improved electricity supply will ameliorate the issue of inadequacy, reduce the disruptions occasioned by frequent outages and in turn improve energy security.
