BY MARK ITSIBOR, Abuja
President Muhammadu Buhari assured yesterday that the federal government will create an enabling environment for private sector operators, especially those in the manufacturing sector, to thrive and grow the economy.
He said the government was also working round the clock to reverse the current economic decline, noting that its actions are in fulfillment of promises made to take steps to reduce the cost of transportation and the impact of inflation on ordinary Nigerians.
LEADERSHIP had reported yesterday that there was disquiet among local manufacturers and stakeholders in the Nigerian automobile industry over the bid by the federal government to slash import duties on tractors, trucks and other transport vehicles.
But President Buhari, while giving the assurance at the opening session of the 26th Nigerian Economic Summit with the theme, “Building Partnerships for Resilience,” held virtually in Abuja, explained that the plan to cut import duties on buses, trucks and other vehicles from 35 to 5 per cent is to reduce the cost of transportation by reducing the cost of vehicles.
The president who was represented by his deputy, Vice President Yemi Osinbajo at the virtual meeting said, “With subsidy removal and the increase in fuel price and the pass through to food prices, transportation cost, of course has to be reduced. Now, the automotive policy is directed at localising production of vehicles.
“So the logic has always been and remains that if we increase the duties and levies on imported cars and vehicles, local production becomes competitive”.
The president insisted that the decision was part of economic measures targeted at revamping the economy and putting it on growth trajectory.
Reacting to the concern raised by Mr Chidi Ajaere of the God Is Good Group who said the planned reduction of the duties on vehicles and cars was antithetical to local manufacturing and assembling of vehicles in Nigeria, Buhari said annual demand for vehicles in the country stands at about 720,000 vehicles per year, while actual local production of vehicles today by the assembly plants is in the border of 14,000 vehicles a year.
“What that means is that 720,000 is a demand, 14,000 vehicles a year, is the supply,” he said.
Ajaere had said in his comment that the new policy will grossly affect local manufacturing of vehicles in Nigeria.
According to him, “A business can only be as great as the government allows it to be.”
Ajaere asked the government to have long term economic plans to build a manufacturing-based economy, while urging those in positions of authority to go beyond talk shows without impactful implementation and sustainability plan for the good policies.
Vice President Osinbajo said, “At the current rate of production, we will not meet serious national needs and this will mean higher prices of vehicles and other sectors of the economy that depend on transportation at a time of a national economic emergency, especially with rising food prices.
“We certainly have to take some steps which we hope in the end, will not necessarily ruin what we are trying to do in the auto sector.”
He explained further that government will also energise other sectors of the economy that were depressed on account of high transportation cost, adding that government is not giving up on the auto industry or the auto industry policy.
Osinbajo said the central government was also promoting a policy that government must buy only locally manufactured cars.
According to him, the federal government is committed to buying only locally assembled cars, while relying on sub-national governments to commit to buying newly locally produced vehicles.
“We believe that if governments (themselves) commit to buying only locally assembled vehicles, we will be able to take up most of what is being produced locally; and of course begin a partway to having our auto industry as time goes on,” he added.
On her part, minister of Finance, Budget and National Planning, Zainab Ahmed, said the federal government will vigorously drive its Economic Sustainability Plan (ESP) to quickly pull the economy out of recession.
“This will be a short-mute recession. The current recession may just last for one quarter,” she said on the sidelines of the summit.
The federal government also disclosed that it is working with the Central Bank of Nigeria (CBN) and the Nigeria Sovereign Investment Authority (NSIA) and other stakeholders to create a N15 trillion Infrastructure Company (Infraco) fund to address some of the nation’s critical infrastructure needs.
“It goes without saying that partnerships remain essential to attract the resources for building a solid national infrastructural base. I am pleased to inform you in this regard that we are working actively with the Central Bank, Nigerian Sovereign Investment Authority and State Governments under the auspices of the National Economic Council to design and put in place a N15 trillion Infraco Fund which will be independently managed”, the minister stated.
Minimum Wage Earners To Be Exempted From Personal Income Tax
Also at the 2-day summit, President Buhari said his administration through the 2020 Finance Bill is proposing the exemption of minimum wage earners from the Personal Income Tax.
He said when added to other items in the proposed Bill, and various economic policies of the federal government, it is expected that the incentives would ensure the resilience of the Nigerian economy to exogenous shocks.
The president who acknowledged that the government must diversify the economy from its dependence on crude oil and build up the nation’s human capital development and improve on infrastructure said, “Our economy must be made more resilient to exogenous shocks”.
Earlier, chairman of the Nigerian Economic Summit Group, Asuen Ighodalo said, “Nigeria must urgently define our own path, galvanise our people, and just work like our lives depend on it. We cannot make this pandemic, or indeed any other hurdles we will encounter, an acceptable explanation for failing to forge forward, not with 200 million lives hanging in the balance and more than half living below the poverty line. We must give those 200 million Nigerians something to hope, live and work for.
“Let this 26th Summit be the one where we collectively resolve to shorn off greed, selfishness, self-absorption, nepotism, tribalism and corruption and stand for what is in the best interest of our country.
“It is time that we show good example and lead the way to creating a more prosperous nation and be brave in facing our realities with strength, purpose and integrity. A tall order from where we are today, but achievable with the will, vision and capacity to effectively and fairly implement the right policies”.