• Friday, July 19, 2024
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Multiple regulatory bodies, overlapping mandates limit manufacturers – MAN

How manufacturing can drive Nigeria’s economic diversification and trade growth

The Manufacturers Association of Nigeria (MAN) identified multiple regulatory bodies and their overlapping mandates as a major hindrance to the growth and competitiveness of the manufacturing sector.

The manufacturers stated this at the 2023 CEOs breakfast meeting of the Ikeja branch of MAN, on Wednesday. The event themed, ‘Growing Nigeria manufacturing sector: Challenges of infrastructure deficiency and unfriendly monetary/fiscal policies’, captured the fundamental hurdles faced by manufacturers, while highlighting the potential for transformative change in the industry.

Speaking at the meeting, 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.”

Manufacturers in Nigeria 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.

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Data from the National Bureau of Statistics show that the 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.
Experts, including Chijioke Uwaegbute, partner at PwC Nigeria have recommended more public (including sub-national) and private sector collaboration to address the infrastructural deficiency in Nigeria.

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.