The Manufacturers Association of Nigeria (MAN), has charged the nation’s
economic managers on the need to attract significant investment to
encourage large scale generation and significant improvement in
transmission and distribution of power supply in the country.
MAN noted that electricity remains a vital input for manufacturing
process to the extent that it constitutes up to 40 percent of its cost
of production, warning that any increment in tariff will lead to a
further rise in production costs.
Such costs will inevitably be passed on to consumers, with attendant
ripple effect in the economy.MAN equally warned that increasing
electricity tariff will have drastic negative effect on the Gross
National Product (GNP); Gross Domestic Product (GDP), disposable income,
consumption, consumer price index, employment, government revenue from
corporate taxation, among others.
MAN President, Mansur Ahmed, at the yearly media luncheon, advised
the Federal Government to concentrate on developing processes and
policies to address the nation’s power needs.He said: “It is also
important for government to ensure adequate and appropriate
consultations with stakeholders in the private sector on such decisions
with far-reaching implications.
“Similar to this, is the uneven pricing of this commodity across DisCos,
which if not corrected, will lead to uneven development in certain
parts of Nigeria, as the percentage increase in tariff differs. A
reduction in electricity tariff for industrial purpose is more ideal,
but even if it cannot be reduced, it should be not be increased; any
increase on the tariff will reinforce the already high cost
manufacturing environment and further depress productivity in the
sector.”
He noted that 2019 was quite eventful for manufacturers owing to the
dire need for engagement with the government on policy decisions with
the potential of having far-reaching impact on the manufacturing sector.
Ahmed also revealed his confirmation as the substantive Chairman of the Pan African Manufacturers Association (PAMA), the umbrella body of manufacturers in Africa.
PAMA main objective is bringing African manufacturers together to
jointly engage governments on the continent to create a conducive and
enabling environment for local businesses to thrive as we anticipate the
take-off of the African Continental Free Trade Area (AfCFTA) from July.
“For the gains of AfCFTA to be realised, government must show readiness
in addressing the supply side constraints relating to lack of
infrastructure; and policies and regulations not being too harsh for
businesses to operate. Rather, regulations should be seen as a way of
assisting businesses to grow, which ultimately enhance competitiveness
and boost the economies,” he said.He pointed out that the Association
remains at the forefront of setting the pace for engagement with other
African manufacturers, urging the Nigerian government to lead by example
in ensuring that policies are industry-friendly, as this is the only
guarantee for a competitive intra-African trade.
“We cannot achieve competitiveness without the provision of
infrastructure such as good road networks and electricity, not only
within African countries, but also across the borders. There is also the
aspect of provision of soft infrastructure – like visa, tariffs, and
foreign exchange – that will help ease up the process of carrying out
business transactions between countries. We must address all these
issues since the AfCFTA is not just about trade in goods but also trade
in services,” he advised.
He said the modern industry competitiveness depends to a great extent on
provision of adequate and efficient infrastructure, stressing that the
role of infrastructure cannot be overemphasized in trade and economic
development on the continent.
“Transportation alone is vital to enhancing competitiveness in trade. For instance, due to poor infrastructure, it will cost a business owner in Nigeria more to transport goods from Lagos to Kano than it will cost a Chinese business owner to transport the same goods from China to Lagos,” he added.
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