Manufacturers seek new industrial policies to boost non-oil exports

Manufacturers have called on the federal government to urgently initiate new industrial policies to boost non-oil export, FX earnings, drive industrialisation and attain a favourable balance of trade.

Speaking at the 7th Annual General Meeting (AGM) of the Manufacturers Association of Nigeria Export Group (MANEG) held recently, themed ‘Targeting Favourable Balance of Trade and the Role of Non-Oil Export Incentives for Manufacturers,’ the manufacturers emphasised the importance of a strong industrial policy that supports local manufacturing.

Olusegun Ajibola, a professor of Economics, and past president of the Chartered Institute of Bankers of Nigeria in his key address said it is embarrassing that the economy is still permissive of all kinds of imported manufactured goods from all over the world, including basic items like toothpicks, biscuits, drinks, textiles, perfume, etc, six decades after independence.

Ajibola emphasised that the new trade policies which manufacturers seek should be able to articulate new incentives and drive implementation to replicate.

Citing an example from the India industrial policy, he said such a paradigm shift calls for courage, sacrifices, determination, patriotism and collaboration to achieve results.

He highlighted the success of other countries in terms of boosting non-oil exports and the need for similar determination in Nigeria. “India of today feeds 1.3 billion human beings, and the same population after implementing tough decisions,” Ajibola said.

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He identified poor road networks, multiple taxation, high energy costs, logistic costs and Customs duty as major issues limiting manufacturing exports.

According to him, clearing a 40-feet container which costs N5 million in 2022 now costs N25 million, indicating a 400 percent increase. He noted that the cost of clearing and tariffs has become a great source of concern for manufacturers as they become unbearably high.

He called for the streamlining of the fees, he noted that no business can survive with such outrageous rates while citing it as part of the reason for the shutdown of many companies and multinationals exit.

He criticised the current practice of waving duties on finished products, which has minimal economic impact.

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“What are those things manufacturers need to enable them to produce locally and add value? Instead of waving duties on finished consumable products, let’s waive duties on the imported spare until we can develop local counterparts for those raw materials.”

Ajibola emphasised the importance of backward and forward integration in the agricultural sector while noting that challenges such as insecurity, flooding, and high costs of farming inputs are creating a supply shortfall of raw materials manufacturers need.

“The agricultural sector should provide the base for supplying certain raw materials for the manufacturing sector. But the issues in the sector are causing a supply shortfall.”

Francis Meshioye, president of the Manufacturers Association of Nigeria said the theme for the AGM is apt and timely, noting that the federal government needs to be intentional, and consistent and apply concerted efforts to incentivize the non-oil export sector for a favourable balance of trade.

Meshioye noted that the country had introduced several export incentives in the past, however, only a few of them are being effectively pursued, adding that manufacturers often experience counter-policy regulations and actions from some government agencies and ministries that are inimical to the export business growth in the country.

“We need to take immediate action to ameliorate the prevailing initial negative impact of government reform measures on the manufacturing sector,” he said.

“The escalating exchange rate, high cost of logistics, insecurity, high energy cost and increasing cost of borrowing among others have combined to weaken the performance of the manufacturing export sector,” he noted.

“We need to address these issues, as signposted in the government stabilization plan. Speedy and diligent implementation is of the essence,” he urged.

He added that the association will continue to engage with the federal government on policy formulation and sustainability, noting that it will stimulate growth in the manufacturing sector, create jobs and engender prosperity in the Nigerian economy.