“Therefore, the N42 billion allocation for the development of the Special Economic Zone Projects across the geopolitical zones to drive manufacturing/exports; Export-Expansion Grant (EEG); N5.12 billion (though grossly insufficient to drive the needed impetus) .
Manufacturers Association of Nigeria (MAN) in its Review of 2019 Federal Government ‘s Budget tagged “Budget of Continuity”, released today, noted that in the bugetary provisions , the N15 million allocation for the recapitalization of Bank of Industry (BOI) and Bank of Agriculture (BoA); and the N10 billion provided as a grant to BOI to subsidize interest rate charged on loans to SMEs are very important developments, “however, they all fall short of the expectation of stakeholders and may limit the achievable success level in 2019.”
Recommends Way Forward
MAN stated that for the budget to be effective there is need to sustain expansionary policy stance while ensuring a sufficient synthesis of monetary and fiscal policies.
“By implication, lending rate should moderate through development windows while taxes and levies should either drop or remain unchanged and backed by incentives.
“As the budget stands, MAN opines that a lot of works still need to be done while hoping that it will be passed with dispatch.
In broad terms, the manufacturing sector could be in for a tough operating environment in 2019, seeing that the needed supporting policies and infrastructure have not been given sufficient priority.
MAN is however hopeful that the capital expenditure component of the budget will be conscientiously implemented.
In order to achieve the set budgetary objectives, it is important that Government should:
*Strongly support the development of petrochemical industries in the country. The industry is a critical raw-materials source for manufacturing, agriculture and other sectors.
*Commence the implementation of the harmonized taxes and levies and allow the Joint Tax Board (JTB) to monitor and enforce compliance by States and Local
*Resuscitate domestic refining of crude oil in the country and ensure the operability of Independent Power Producers (IPP) for On/Off grid power generation and the Micro Grid Initiative;
*Re-classify the Manufacturing sector into strategic gas users from the current commercial gas user’s classification;
*Continue to entrench better exchange rate management – Forex allocation should tilt more to the industrial sector including the SMEs;
*Construct a realistic Margin of Preference which will be applied by MDAs in their procurement decisions – MAN had earlier suggested 30 percent;
*Encourage the State and Local Governments to embrace patronage of made in Nigerian products by toeing the footsteps of the Federal Government, and the Federal Government strictly walking the talk;
* Reduce Company Income Tax (CIT) from the prevailing 30% to 20% to promote higher productivity and employment in the economy;
*Address the challenge of multiplicity and illegal taxes/levies/fees by ensuring that all tiers of Government comply with the Taxes and Levies (Approved list for collection) Act CAP T2 LFN 2004; and reinforce Inter-state relationship in tax administration with a view to harmonizing taxes and levies payable to each State.