May 19, 2024

MAN’S REACTION TO HIS EXCELLENCY, PRESIDENT BOLA AHMED TINUBU INAUGURATION SPEECH

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Even though we have to critically consider the inaugural speech of Mr. President, I would like to make the following comments as our immediate reaction.
I would like to start by congratulating the newly elected President, Asiwaju Bola Ahmed Tinubu on his assumption of leadership of the country today.


As you would imagine, change in administration is usually greeted with expectations and as an advocacy group, we surely look forward to a number of policy changes and decisions.


It is therefore highly commendable and an assurance of better days ahead to hear the President saying that his industrial policy will utilize the full range of fiscal measures to promote domestic manufacturing and lessen import dependency. For me, this is a positive development. It is an unmistakable indication of a far-sighted strategic choice. One that is borne out of a deep reflection on the current inclement manufacturing environment and the need to stop the drift into inglorious de-industrialization of the Nigerian economy.


What is most gratifying is that it came from Mr. President from day one. The issues of multiple and often times punitive taxation; conflicting and contradictory fiscal and monetary policy measures; skewed and poor management of the foreign exchange regime and the long overdue stoppage of the fuel subsidy were addressed in the President’s speech and I believe they resonate with manufacturers in particular and the business community in general.


A marching order, so to say, is needed to move the Central Bank towards a unified exchange rate. I am glad that Mr. President was very clear on this. We also expect that, in line with his promise to enable a supportive fiscal policy regime, Mr. President will order a reversal of the unwarranted violation of the government’s three-year excise escalation roadmap on alcoholic beverages and tobacco. As we have shown, the latest hike as contained in the 2023 Fiscal Policy Measures is not only going to ruin the affected sectors, it will be counterproductive for government revenue in the near future. Our infrastructure has remained inadequate and so the ongoing efforts of the government have to be intensified and this again was mentioned by the newly inaugurated President.


In line with this optimistic beginning, I would like to add other low hanging ripened fruits for Mr. President:

  1. In addition to pursuing the unification of the exchange rate, the CBN should be prevailed upon to take effective action to give priority to the allocations of foreign exchange to the productive sector, particularly to manufacturers to import raw materials, spares, and machinery that are not locally available.
  2. Direct the NERC to admit all qualified applicant companies into the Eligible Customer Scheme in order to allow them access to power as stipulated in the Electric Power Sector Reform Act 2005.
  3. Direct all relevant agencies of government to ensure that the electronic call-up system at ports aimed at redressing the congestion works without fail.
  4. Revisit the Finance Bill 2022 to ensure it includes the critical inputs of the organized private sector. In particular, the jettisoning of the highly objectionable removal of the 10% investment allowance on the acquisition of plants & machinery (in the Company Income Tax Act, section 32). Additionally, to ensure that the imposition of the 0.5% levy on eligible imports from third countries is limited to goods that we have the capacity to produce locally and quite importantly, exclude raw materials that are not locally available. The input of the Organised Private Sector on the CEMA bill should also be taken on board before the amendment bill is signed into law.
  5. Announce a special policy initiative to address the revival of closed and distressed industries, particularly in the northeast where 60% of our member companies have closed.
  6. Craft and announce a special policy initiative to leverage diaspora expertise and investment to address evident gaps and help to boost the performance of the economy.
  7. Direct all ministries, departments, and agencies of government to unfailingly comply with Executive Order 003 on the patronage of made-in-Nigeria products. In this regard, there should be strict application of the margin of preference, effective monitoring and periodic evaluation of compliance, and appropriate sanctions meted out to MDAs acting in breach of the executive order.
  8. Announce a special policy initiative to derisk manufacturing and release adequate funding for the sector through effective funding of special lending windows.

Segun Ajayi-Kadir, mni
Director General

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