President, Manufacturers Association of Nigeria (MAN), Dr Frank Jacobs Udemba, has noted that, for Nigeria to completely come out of recession, the manufacturing sector must be given priority.
Dr Udemba gave the advice while reacting to a recent statement credited to the finance minister, Kemi Adeosun, that Nigeria would be out of economic recession before the end of the year.
The MAN boss said the government has a big role to play in the manufacturing sector and has to create the needed enabling environment and an operating environment that can attract investors.
Udemba stated this in a telephone interview with LEADERSHIP in Lagos; The President noted; “Each time our members approach banks for forex as regards the 60 percent forex allocation policy recently announced by the CBN, they tell us that CBN has not released any forex to them. Most of the policy statements made by the government were achieved as a result of the interactions between MAN and the government.
“Getting out of recession in December like the government said; recession is deep rooted, I guess it will stay till the first quarter (Q1) of 2017, though, positive growth has been recorded in agriculture.
“MAN has done a lot in sensitising the public on buy made in Nigeria goods and we signed MoU with the Ministry of Industry, Trade and Investment which has helped to drive the made in Nigeria goods and we expect the Federal Government to launch the compendium.
“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.
“This will enable the sector to be optimally productive and play its expected role of employment generation, capital mobolisation, wealth creation and technology acquisition. Reduction of the MPR and by implication, other rates especially 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.”
He urged the government to encourage export of manufactured and other non-oil products as a way of boosting foreign exchange earnings for the country as well as activate automatic stabilisers especially for the industrial/manufacturing sector.
He pointed out that the review of the Export Expansion Grant (EEG), which has been going on since 2014 should be concluded so as to make the incentives available to exporters as a way of encouraging export, maintaining that it would allow the payment of import duties and Company Income Tax (CIT) with the existing Negotiable Duty Credit Certificate (NDCC).