The Organised Private Sector of Nigeria (OPSN) has called for the immediate reversal of the recently announced increase in excise rates by the federal government, saying it is detrimental to the Nigerian economy and the manufacturing sector in particular.
According to a circular dated April 20, 2023, and signed by Zainab Ahmed, the Honourable Minister of Finance, Budget, and National Planning, the government will charge N75 per litre of beer, stout, or wine imported into Nigeria under the newly introduced taxes.
The OPSN, made up of various associations such as the Manufacturers Association of Nigeria (MAN) and the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), complained that the manufacturing sector is presently grappling with unprecedented challenges, including the sustained scarcity of the naira, limited access to foreign exchange, a struggling economy, and persistent inflation, alongside perennial problems of multiple taxation and epileptic power supply.
“These challenges have resulted in a record crash in sales for most businesses running into billions of Naira, with the result that manufacturers are struggling to remain in business amidst looming job cuts, mothballing of factories, and total shutdown of businesses,” according to a statement signed by Segun Ajayi-Kadir, director-general, Manufacturers Association of Nigeria, and other executive members of the OPSN.
“Increasing excise rates at this time is extremely ill-advised and may sound the death knell for affected businesses and their contribution to the national economy, even as the broader manufacturing sector continues to deteriorate,” Ajayi-Kadir said. “In light of the above, the OPSN respectfully requests the Federal Government to urgently reverse the increase in excise rates to protect the affected industries and the dependent businesses in their extended value chain from imminent collapse with calamitous consequences for the economy.
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“We request the Federal Government to suspend excise taxes in the manufacturing sector for at least six months, following the examples of South Africa and the United Arab Emirates, he added. “We also urge the Central Bank of Nigeria to deploy measures to alleviate the naira scarcity crisis and prioritise foreign exchange allocations to the productive sector.”
Ajayi-Kadir also said, “The OPSN appreciates the Buhari administration’s efforts to support the manufacturing sector and is confident that our request will receive a prompt and positive response that benefits industry, government, and the Nigerian economy during this critical time.”
