The president of the Manufacturers Association of Nigeria (MAN), Mansur Ahmed, has lamented the effect of the increase in foreign exchange, increase in value-added tax, hike in fuel pump price and electricity tariff. He said these incessant hikes in prices will increase the cost of doing business, and in turn force manufacturers to transfer the burden on Nigerians.
Ahmed made the statement during the Union's 2020 Annual General Meeting (AGM ), media briefing held at MAN house Ikeja, Lagos.
Speaking during the press brief Ahmed, noted that Manufacturers are increasingly finding it difficult to source foreign exchange for the importation of raw materials, machinery and spares that are not available locally, adding that the Central Bank of Nigeria (CBN) should grant manufacturers increased access to Foreign Exchange to support the importation of raw materials, machines and spares that are not available locally.
“It is our conviction that the foreign exchange unification initiative will engender a regime of balanced participation for forex users and promote a transparent as well as efficient allocation of forex required for sustained economic growth.
“The current announcement by Government on inflation that is to upward of 162 pump price, is an additional cost structure for the manufacturing industry. As you may know, MAN is currently facing a cost structure of about 40 per cent. The government should create a differentiated energy structure for the MAN sector.
“inadequate electricity supply and incessant increases in tariff without a commensurate improvement in generation, transmission and distribution remain key challenges. The manufacturing sector spent over N67.38b on self-generated electricity with energy cost accounting for over 38 per cent of production cost in 2019.”
MAN, also bemoaned the effect of a covid-19 pandemic on the global supply chain, which according to the group worsen the country’s economy.
“This pandemic disrupted the global supply chain, caused a massive slowdown in the international trade and in our case worsened the already fragile economy. The consequence of this development was that sectoral groups ran short of supplies of raw materials due to disruptions in the global value chain and many still cannot access forex. The global price of crude oil also crashed leaving the country with no choice than to review downward its expenditure plan for the year.”