MAN to FG:  Expend fuel subsidy savings to combat inflationary pressures

The Manufacturers Association of Nigeria (MAN) has urged the Federal Government to expend cost saving from fuel subsidy to combat inflationary pressures from insecurity, energy and transport cost.

MAN also said that sectoral real growth in 2024 is expected to hit about 3.2 per cent.

The organization in a statement signed by its Director General, Mr. Segun Ajayi-Kadir, MAN said 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.

According to him, there is need to overhaul the power sector and incentive investment in renewables to boost electricity generation and promote energy-cost efficiency.

He said, government should lead by example and give priority to patronage of made-in-Nigeria product in all its purchases and for all government contracts and projects.

“Government should 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.

“Government should encourage local sourcing of raw materials through comprehensive and integrated incentives to address the challenges of low productivity and imported inflation.

“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,” he said.

Ajayi-Kadir further said that encouraged sub-national governments and private investors to leverage the opportunities provided by the Electricity Act 2023 to improve energy security in Nigeria.

He added that the government should 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.

Also, he said that government should manage the floating exchange rate system within an acceptable lower and upper bound, pending the actualization of a net-exporting economy aspirations.

The MAN DG further noted that there is need to prioritize forex and credit allocation to the manufacturers and reduce the number of BDCs into large and well-established operators to curb their excesses and untoward operations through effective management and supervision.

“Encourage inflow of foreign direct investment into pre-determined and domestic production-enhancing businesses. Should intentionally guide diaspora remittances into non-oil sectors, especially manufacturing to aid forex inflows and curb rising inflation.

“The CBN should intensify its collaboration with the fiscal authority; Federal Ministry of Finance and by extension the Tariff Technical Committee (TTC) for proper policy alignment on the appropriate HS Codes for items that Nigeria has sufficient capacity to discourage importation and save scarce foreign exchange.

“The apex bank should allow forex access for importation of vital industrial inputs that are currently not available locally and subject them to backward integration policy that gives priority to a predictable sunset clause. MAN offers to be part of a monitoring and evaluation team to ensure that government gets value for incentives offered to achieve this objective.

“The CBN to develop a sustainable framework to channel credit interventions into the manufacturing sector, outside the direct intervention. Additionally, it should 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,” he said.