“OVER 200 CEOs of Manufacturers Association of Nigeria (MAN) member-companies across the country have bore their minds on macroeconomic and business operating environments depressing the performance of the sector.”
In the document ‘ Manufacturers CEOs Confidence Index (MCCI) First Quarter 2019′, MAN said that the survey took into account manufacturers perception on a set of diffusion factors which include (Foreign Exchange, Lending Rate and Credit to the manufacturing.
“It also considered the business operating environment (Over-regulation, Multiple taxes/levies, Access to sea ports, Local raw-material sourcing and Government patronage of Nigerian manufactured goods) in the analysis).”
Here are what the respondents said in the data generated by MAN , across 10 sectoral groups and 14 Industrial zones :
Forex: Of all the MAN CEOs interviewed, 41 percent do not agree that the rate at which the sector sources forex has improved.
36 percent however agreed while another 23 percent are not sure that forex has improved.
The response therefore suggests the need for continuous fine-tuning of forex policy in the country particularly as it concerns the manufacturing sector.
On Lending Rate: Majority of respondents, 63 percent, do not agree that the rate at which commercial banks lend to manufacturers encourages productivity in the sector. This can be justified with the double-digit cost of borrowing from the commercial banks, which no doubt, discourages investment.
Affirming need for measures that will lower cost of borrowing, particularly to the manufacturing sector.
Regarding Size of Loan to the Sector: 54 percent of manufacturing companies’ CEOs do not agree that the volume of Commercial Banks loan to the manufacturing sector encourages productivity in the sector. It is therefore important that a policy should be designed to improve the proportion of commercial banks loanable funds that goes to the manufacturing sector. 28 percent of respondents agreed while the 18 percent were not sure if the size of the Bank loan to the sector encourages productivity.
On government’s Regulation:majority of respondents agreed that multiple/over-regulation by all tiers of Government Ministries, Departments and Agencies (MDAs) depresses productivity in the manufacturing sector.
Quite often, Agencies of the Federal, State and Local Authority agencies regulate the same manufacturing process resulting to man-hour loses and multiple regulatory charges. It is imperative that the sphere of regulation for MDAs of each tier of Government be properly delineated, streamlined and where possible harmonized.
Local Authority agencies regulate the same manufacturing process resulting to man-hour loses and multiple regulatory charges. It is imperative that the sphere of regulation for MDAs of each tier of Government be properly delineated, streamlined and where possible harmonized.
Feedback on Multiple Taxes/levies, shows that majority of the CEOs interviewed, 92 percent agreed that multiple taxes and levies depresses production in the manufacturing sector.
This is substantiated by the numerous taxes, levies, fees and other charges that manufacturers pay to Agencies of the Federal, State and Local Governments.
The result reemphasized the need to address this menace by harmonizing the observed multiplicity of taxes and ensuring that only approved taxes/levies/fees are charged.