Mohammed Shosanya
The Manufacturers Association of Nigeria,MAN,has advised the Federal Government to utilize subsidy savings to improve patronage of made in Nigeria products and upgrade electricity, road and rail networks within industrial hubs.
Segun Ajayi-Kadir,Director General of MAN,said this in a statement in reaction to the new hike in interest rate announced by the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN),on Tuesday.
He also emphasized the need for the government to encourage nationwide investments in renewable energy sources to alleviate energy cost and enhance competitiveness.
He advised the government to take deliberate actions to insulate the productive sector from the impact of continuous hike in MPR by expediting action on the disbursement of special provisions earmarked by government for the manufacturing sector.
He added:”The N75billion single digit loan approved by President Bola Tinubu, GCFR over a year ago and the recently announced N1trillion readily comes to mind”.
According to him,government should offer fiscal support system that will enable the manufacturing sector import raw materials, spares and machines that are not available locally at concessionary duty rate.
Government,he said,should minimize pressure on foreign exchange reserves by incentivize backward integration and local sourcing to decrease reliance on imported products and raw materials.
It should enforce Executive Order 003 to enhance support for local industries and ramp-up domestic production by restricting access to forex for the importation of products manufactured locally.
He added that government should also address the issue of low manufacturing productivity and food production occasioned by the high-level of insecurity across the country to curb the persistent rise in inflation.
He further advised the government to direct the CBN to conduct a comprehensive assessment of the impact of previous decisions of the MPC on inflation rate and the productive sector over the last 5 years.
This,he said,will provide information that will guide future MPC decisions.
He urged the government to direct the CBN to collaborate with the Ministry of Finance to facilitate stronger handshake and coherence between monetary and fiscal policies.
He implored the apex bank to be domestic production centric by taking a detour from continuous hike in MPR and allow time for the real sector to recover from the impact of previous hikes.
He expressed concern that, despite the continuous increase in MPR over the past two years resulting in a weighty 1,475 basis point hike from 11.5% in May 2022 to 26.25% in May 2024, inflation has remained persistently high, reaching a staggering 34.19% in June, the highest since March 1996.
He said:”Clearly, the new rate will further constrain the growth of the manufacturing sector, as the purchasing power of consumers, production levels, competitiveness and sales will face further decline”.
