MAN mounts pressure on Abuja to prevent industry collapse
By Jeph Ajobaju, Chief Copy Editor
Real sector players have mounted pressure on Abuja to remove the 7.5 per cent Value Added Tax (VAT) on diesel at least until supply chain normalises to address the complexity of business.
The Manufacturers Association of Nigeria (MAN) said removing VAT on Automotive Gas Oil (AGO), also known as diesel, would reduce the pump price and make it affordable to all stakeholders in the economy, big and small.
MAN President Mansur Ahmed made the appeal in Ibadan at the 39th Annual General Meeting (AGM) of MAN branches in Oyo, Osun, Ondo and Ekiti States.
He urged Abuja to urgently convene a meeting with key operators in the economy to craft a response to the impact of the war in Ukraine on global supply chain.
“Government should remove the 7.5% VAT on the AGO pending the normalisation of the international supply system and quickly resolve the complexity surrounding the seamless implementation of the eligibility customer initiative to enable manufacturers to take advantage of the standard electricity.
“We believe that this will help to identify viable options to ameliorate the impact of the disruption, agree on ways to assuage other pain points on the business environment, activate innovative solutions to familiar and emerging macroeconomic and infrastructure challenges and generally point the director for resilience in the economic ecosystem,” said Ahmed, represented by Lagos branch Vice President Francis Mesioye.
“The government should prioritise allocation of foreign exchange [forex] to the manufacturing sector and that the CBN should direct commercial banks to transparently and diligently process forex applications by manufacturers.
“It is also important to improve the time taken to clear container/cargo at the ports to reduce the various port charges and remove demurrage for unduly delayed clearance.”
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Rethinking Nigeria’s development strategy
MAN said it has to rethink Nigeria’s development strategy to avoid the consequences of economic recession and reversal of the progress it has recorded post pandemic, per reporting by Vanguard.
“To this end, it is again necessary that the federal and state governments, together with their agencies, work in synergy, carrying along relevant stakeholders, in fashioning appropriate strategies to improve and stabilise the economy.”
Ahmed asked Oyo, Osun, Ondo, and Ekiti to institute a more effective consultative mechanism with MAN in order to support manufacturing companies, some of which are on the verge of collapse.
“We urge you to harken to the need of businesses for appropriate incentives and infrastructure that would ameliorate business constraints and encourage new investors.
“In this regard, we request that you carry out a system check on the regulatory functions of certain agencies and organs of government that negatively impact manufacturing and discourage would-be investors.”
Need to harmonise state MDA taxes
MAN South West Chairman Lanre Popoola lamented the inability of the government to harmonise the taxes of local and state ministries, departments and agencies (MDAs) that pose another challenge to manufacturers.
He said despite economic policies introduced by various arms of government, businesses are still struggling and the environment remains toxic and challenging.
“Multiple issues like hike in petroleum prices, unstable power, forex are still very prevalent and these issues make economic planning very complicated, not to mention over zealous consultants set on reaching targets to the detriment of manufacturers who have been classified as ‘cash cows’ and ‘golden geese.”
Oyo pledges enabling environment
Acting Oyo Governor Bayo Lawal charged members of MAN to strengthen their vibrancy in providing employment, saying relevant agencies should be interested in positivity.
He promised Oyo will continue to create an enabling business environment for human and material capital to thrive.