Multiple regulatory bodies, overlapping mandates constraint manufacturers – MAN

The Manufacturers Association of Nigeria (MAN) has said the multiplicity of regulatory bodies and the overlapping mandates they possess is hindering the growth and competitiveness of the manufacturing sector.

This was revealed at the 2023 CEOs breakfast meeting of MAN, Ikeja branch on Wednesday. The event-themed ‘ Growing Nigeria Manufacturing Sector: Challenges of Infrastructure Deficiency and Unfriendly Monetary/Fiscal Policies’ captured the fundamental hurdles of manufacturers while highlighting the potential for transformative change in the industry.

Speaking at the event, Robert Ugbaja, chairman, MAN, Ikeja branch, said navigating through a maze of agencies and compliance requirements can be daunting for manufacturers, particularly for Small and Medium-Sized Enterprises with limited resources.

“The result is a significant drain on time, effort, and financial resources that could otherwise be directed towards enhancing productivity and competitiveness,” he said.

He added that the lack of coordination and harmonisation among regulatory agencies often leads to duplicative inspections, conflicting directives, and unnecessary delays in obtaining approvals and permits.

“This not only increases the cost of doing business but also erodes investor confidence and hampers our ability to attract much-needed foreign direct investment.”

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Manufacturers in Africa’s biggest economy face numerous challenges such as high inflation, poor energy (electricity) supply, increase in diesel pump price, scarcity of foreign exchange, poor road networks for seamless logistics, insecurity and unfriendly monetary/fiscal policies.

Data from the National Bureau of Statistics, manufacturing sector grew at the lowest rate in three years by 1.61 percent in the first quarter of 2023, down from 2.83 percent in Q4 2022 and 5.89 percent in the same period last year.

“There is a need for greater attention to bring in policies that will make and enhance operations of manufacturing businesses in Nigeria. These will monetise investments into the sector,” Francis Meshioye, president of MAN, said.

Chijioke Uwaegbute, partner at PwC Nigeria added that although the country will have a new administration, they do not expect any significant changes in the economy

He recommended more public (including sub-national) & private sector collaboration to address the infrastructural deficiency given the success of the Road Investment Tax Credit scheme, innovative financing for the construction of roads (Sukuk bonds) etc.

Others are harmonisation of multiple taxes and multiple taxing agencies, more stakeholder engagement, use of incentives and strategic partnerships to domesticate value chains for key sectors, facilitating import substitution whilst leveraging on research and development and leveraging trade agreements.

“Overall impact of the industry’s operations beyond profits, for example, environment, social and governance. This is to ensure sustainable growth in a dynamic business environment,” he said.