By Industrial Digest
That’s how stakeholders in the Nigerian private sector fittingly described 2020 in review.
At the Commerce and Industry Correspondents Association of Nigeria (CICAN) End of Year Workshop, Titled, “Effects of COVID-19 on the Real Sector / SMEs Financing.,’ the stakeholders lamented that the outgoing year is shaped by a global health crisis with its attendants consequences on people, businesses and economies.
Mr. Mallinson Afam Ukatu, Chairman, Non-Metallic Mining, Manufacturers Association of Nigeria (MAN), noted that on the local scene, business environment has become more hostile and unbearable, coupled with all forms of levy and multiplicity of taxes, inflation rising from 10 percent to 14.23 percent, and heading to 15 percent; and the issue of border closure that has been for more than a year .
“There are escalating exchange rates, and forex scarcity coupled with the Covid-19 pandemic , and recession, he said .
“The government should grant tax holiday to manufacturers during this period of general economic hardship if we must come of recession in the first quarter of 2021,” he said.
SMEs are the hardest hit
Dr. Adams Adebayo, Chairman, Nigerian Association of Micro, Small and Medium Enterprises (NASME), Lagos State Chapter, said that small businesses are the hardest hit from the current COVID-19 pandemic, adding that the bigger businesses have better chances of surviving it.
Adebayo said, ‘Nigeria has been reported to be at risk of a serious demand-supply crisis and faces possible domestic scarcity and loss of N2.27 trillion in the trade from its top five import countries.
Four of Nigeria’s top trading partners and import sources including China, USA, Spain and Netherlands that account for 45 percent of Nigeria’s imports, are all battling COVID-19 and strategising solutions to recover their badly hit economies.
“Supply chain disruption, in particular, would hamper manufacturing operations, availability of consumer goods and retail operations in Nigeria, coupled with likely low activity in the local productive sector, both in the pandemic and post-pandemic. Consequently, there would be more job losses and worsening unemployment in the country. Revenue to the government will also dwindle especially as a result of instability of the global oil price.”
In his remarks, the President of Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, highlighted steps to achieve a virile real sector growth in Nigeria.
Economic managers, take note
He pointed out that for Nigeria to come out of recession, the government must remove all multiple taxes levied on manufacturers, advising that the economic managers should encourage manufacturers by way of formulating investment friendly policies.
“The government should grant tax holiday to manufacturers during this period of general economic hardship if we must come of recession. They should think of incentives to manufacturers and not to burden them with levies and taxes. The government should make low single digit loans available with less bureaucracy if the country must experience growth,” he said.
The Acting Director-General of Manufacturers Association of Nigeria (MAN), Ambrose Oruche, said that the policies formulated to drive manufacturing in the country are not supportive.
He doubts if the sector would be out of doldrums by the 1st quarter of 2021.
He said the environment must be created for manufacturing to thrive while also calling on Nigerians to have a penchant for locally made goods.
He pointed out that having penchant for foreign goods would make locally made goods struggle as soon as the African Continental Free Trade Agreement (AFCFTA) kicks off next year.
Support SMEs to survive and flourish
Also, the Director – General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Ambassador, Ayoola Olukanni, said that the government’s monetary and fiscal policiesmust be implemented to improve ease of doing business and reducing the cost of doing business, especially for SMEs which makes about 48 per cent to the national GDP and provides about 84 per cent employment.
“Implicitly, our SMEs which are the private sector operators are the bedrock of our economy and we must do all we can to support them, not just to survive but flourish as we consider strategic options out of recession hopefully by first quarter of 2021,” he said.
He noted that the COVID-19 pandemic that has swept around the globe for a greater part of this year has brought with it a health, as well as, an economic crisis.
“As an economy, we are yet again facing the consequences of over-dependence on crude oil revenues. This is a reminder that we must really work hard to diversify our economy. We face dwindling foreign exchange reserves, increasing domestic and foreign debt, and difficulties in doing business brought about largely by an infrastructure deficit in the power and transportation sectors,” he said.
In picture from left: Mrs Rhoda Ogunseye, Vice Chairman, CICAN, Dr. Adams Adebayo, Chairman, NASME, Lagos State Chapter, and Charles Okonji, National Chairman, CICAN at the 2020 end of year workshop in Lagos.