Use savings from fuel subsidy removal to support production, MAN urges FG

Use savings from fuel subsidy removal to support production, MAN urges FG

Use savings from fuel subsidy removal to support production, man urges fgThe Manufacturers Association of Nigeria (MAN) on Thursday urged the federal government to use savings from fuel subsidy removal to support production. This is part of the recommendations reeled out to improve the real sector’s performance in 2024.

Its Director General, Mr Segun Ajayi-Kadir, gave the advice via a statement in Lagos.

BRANDPOWER reports that Ajayi-Kadir urged government to use savings from fuel subsidy removal to deploy a bouquet of production focused policies, backed with more structural measures to combat inflationary pressures from insecurity, energy and transport cost.

Ajayi-Kadir also called for the overhaul of the power sector and incentivise investment in renewables to boost electricity generation and promote energy-cost efficiency.

He encouraged sub-national governments and private investors to leverage the opportunities provided by the Electricity Act 2023 to improve energy security in Nigeria.

The MAN DG said that government should lead by example and give priority to patronage of made-in-Nigeria products in all its purchases and for all government contracts and projects.

According to him, 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.

“They must utilise the 2024 Budget to sustain efforts at improving infrastructure developments, especially in strategic industrial hubs, to reduce operational and logistic cost and promote competitiveness,” he said.

Ajayi-Kadir also stressed that all measures must be maintained to boost liquidity level and degree of transparency in the official foreign exchange window even as the backlog of $7 billion foreign exchange obligations was being cleared.

He said Nigeria should manage the floating exchange rate system within an acceptable lower and upper bound, pending the actualisation of a net-exporting economy aspirations.

The MAN DG called for the prioritisation of foreign exchange and credit allocation to manufacturers and reduce the number of Bureau De Change (BDCs) into large and well-established operators.

This, he said, was to curb their excesses and untowards operations through effective management and supervision.

“Nigeria should encourage inflow of foreign direct investments into pre-determined and domestic production-enhancing businesses.

“We should intentionally guide Diaspora remittances into non-oil sectors, especially manufacturing, to aid foreign exchange inflows and curb rising inflation.

“The Central Bank of Nigeria (CBN) should intensify its collaboration with the fiscal authority; Federal Ministry of Finance and by extension the Tariff Technical Committee (TTC).

“This is 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 foreign exchange 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,” he said.

Ajayi-Kadir also urged the CBN to develop a sustainable framework to channel credit interventions into the manufacturing sector, outside the direct intervention.

“Additionally, it should mobilise commercial banks to intentionally provide long term single digit interest loans to the manufacturing sector to fast-track the actualisation of a one trillion dollar economy,” he said.