The Manufacturers Association of Nigeria (MAN) has again said that regular policy changes by government is creating uncertainties for investors in Nigeria. Specifically, MAN stated that policy flip-flop was a critical factor that has made the country’s business environment tense, especially the level of uncertainties that bedevil the regulatory environment.
MAN Director-General, Segun Ajayi-Kadir, who stated this in a chat with New Telegraph in Lagos, said that there were too many changes to policies on taxes, import restrictions, foreign exchange market operations, etc. According to him, “policy inconsistencies create uncertainties in the business environment. Unfortunately, businesses still suffer from such uncertainties.”
Ajayi-Kadir explained that government’s policy alterations were bringing down critical developments in the country, especially in the manufacturing sector, following multiple taxes being rolled out against local manufacturers operating in the economy. He stressed that the country’s business environment was having more problems and these challenges were causing setbacks for the manufacturing sector in terms of growth and development. The MAN DG highlighted that weak power supply remained a significant burden on businesses.
He noted that “it is one area in which the trend since independence has been that of progressive decline. We urge the government to sustain the reforms in the power sector until when we start to see a noticeable improvement in power supply.” Speaking further, the MAN boss pointed out that the idea of allowing states to drive power supply management was commendable and should be well implemented to achieve the desired results.
“With the frequent collapses recorded by the national grid, certainly, we can no longer rely on a centralised power source. The way to go is renewable energy and decentralising the national grid. “We urge the government to create an environment that attracts manufacturers of solar panels to drive the massive adoption of renewable energy in Nigeria,” he said. On insecurity, the manufacturing sector expert stated: “In the last decade, the security situation in the country deteriorated, assuming a very worrisome dimension.
“This has impacted investment inflow and worsened the country’s perception and image by the global investing community. “Today, insecurity is a critical factor driving an unbearable inflation rate in Nigeria. “Agricultural production bases have been negatively impacted, leading to food scarcity and rising food inflation.” Speaking further, Ajayi-Kadir said: “The Federal Government needs to sustain its targeted interventions in selected critical sectors like agriculture, manufacturing, and export infrastructure, tackling insecurity and freeing more money from subsidy payments.
“We urge the government to tackle oil theft to earn more foreign exchange, borrow from cheaper sources to reduce the burden of debt servicing and take a decisive step towards removing fuel subsidies.” While touching on high cost of credit and low consumer demand, the MAN helmsman explained that “a significant factor attributed to the recent exit of multinationals is the low consumer demand for their products, especially in the fastmoving consumer goods sector.
“With elevated inflation rates, job losses, and increasing poverty levels, consumer purchasing power has been badly weakened. In that process, these consumers switch to cheaper, less quality substitutes from competitors, shrinking the multinationals’ market shares. “At this time of high inflation, unbearably high interest rates, and weakened Naira against the Dollars, a reprieve to companies in Nigeria may not be near yet without targeted government intervention.”
Ajayi-Kadir added that the revenue from oil had shaped the size of the country’s federal budgets for so many years, thus, saying “the oil sector has undoubtedly defined our economic landscape, financed our industrialisation, and hugely supported other sectors. It gave us the resources to build infrastructure, invest in education, and position Nigeria as a key player in global energy markets.” On economic diversification, he pointed out that “the diversification of our economy has been a topic of focus for a long time, and our continued dependence on oil revenues questions our claim of being a diversified economy.
“We must diversify our revenue by developing other sectors like solid minerals, gas, and agriculture to reduce our dependence on oil revenues.” Beyond achieving economic growth, he added that “government must redesign the models of running our healthcare service delivery and education in order to improve our Human Development Index (HDI).