Vanguard (Lagos)

Nigeria: How to Stimulate Economy in New Year, By LCCI, MAN

Lagos — As the New Year begins, the Lagos Chamber of Commerce and Industry, LCCI, and Manufacturers Association of Nigeria, MAN, yesterday, prescribed 10 ways government and the private sector can stimulate the economy this year.

In a review of the out-gone year, LCCI President, Mr Goodie Ibru, said in spite of the current challenges, the Nigerian economy still offers enormous opportunities and potentials for investment.

He said: "For this to be realised, however, the constraints to productivity and efficiency must be tackled with better commitment and sincerity.

"A number of policy choices and actions are desirable to make this happen. They include (but not limited to) the following: Commitment to improvement in the general cash flow in the economy. This is critical; the liquidity and cash flow situation in 2012 was a major challenge for many investors. Lending rates should be moderated and access to credit should be reasonably liberalized. Monetary and fiscal authorities need to make this happen in 2013.

"New strategies should be adopted to deal with the security situation in the country; security concerns heightened investment risk and depressed sales in 2012. We hope for an improvement in 2013.

"Passage of the Petroleum Industry Bill, preferably in the first quarter of the year, is desirable. This would unlock the potentials in the oil and gas sector. The passage of the bill would reduce the current uncertainties in the sector and eliminate the present stagnation of investment.

"With the early passage of the 2013 budget, we hope to see a better level of budget implementation in 2013.

"Declaration of debt accumulation to protect the economy from the looming debt trap. We expect a moderation in public debt accumulation in 2013.

"Better disposition of public institutions towards investors and entrepreneurs. We hope to see a public sector that is driven by the true spirit of public service. This would enhance private sector development in the overall interest of the economy and the citizens.

"Renewed commitment to fight corruption in 2013. Currently, the economy bleeds profusely from corruption and our expectation is that this bleeding will be moderated in 2013. This should happen through a combination of appropriate policy choices, deterrent sanctions for perpetrators and rewards for integrity.

"New momentum to address the huge infrastructure deficit in the economy.

We desire a higher dedication to infrastructure improvement especially with regard to power, roads, and railways. Current reforms in the power sector should be sustained.

"We desire to see renewed commitment to patronage of locally produced goods by government agencies and institutions.

"Renewed commitment to local content policy, not just in oil and gas sector, but in other sectors of the economy. Indigenous participation is an important strategy to ensure inclusive economic growth.

Need for govt to address menace of multiple taxes

Similarly, Chairman, Manufacturers Association of Nigeria, Ogun State Branch, Dr. Dolapo Ogutuga, said there was need for government to address the menace of multiple taxes which characterized 2012.

He said: "On continuous basis, local government councils, regulatory agencies of government came out with one form of taxation, levies or charges which stalled operations of factories to a near halt.

"Last year was also challenging for the manufacturing due to security challenges caused by the Boko Haram sect. The effect of this development is that supplies of products to the Northern states were adversely affected. This affected the manufacturing business in the country as companies had to maintain higher inventories."

Smuggling erodes competitive strength

Are Fatai Odusile, Executive Secretary of the Distillers and Blenders Association sub group of MAN, also wants government to tackle smuggling by the horn.

According to him, last year, the businesses of their member companies were adversely affected by the influx of smuggled wines and spirit from Asia, India, South Africa and Europe into the country.

He lamented that smuggled foreign wines and spirit had eroded the competitive strength of local manufacturers.

He noted: "The local wines and spirits industry with a combined 125,000 workers, contributing N40 billion corporate taxes and Valued Added Tax, VAT, per annum and accounting for N2.17 trillion market capitalisations on the Nigerian Stock Exchange, is now under threat of closure from smuggled foreign brands.

"Unless the Federal Government takes a decisive action against the development, companies in the sector will soon go the way of Afprint, Enpee Industries, Kaduna Textile Limited. Berec Batteries, Dunlop and Michelin."

New manufacturing investments

Chief Kola Jamodu, MAN President, further summed up the stakeholders expectations when he said they would like to see new manufacturing investments spring up and some old manufacturing plants revived this year.

He noted: "In 2012, President Goodluck Jonathan commissioned some new manufacturing investments in Lagos, Ogun, Imo, Rivers, Enugu and Anambra states. This is a welcome development for the manufacturing sector and I look forward to seeing more of such happening in all states of the federation soonest."

He said the stakeholders also wanted "long term loans at lower single digit interest rate and zero per cent duty on all manufacturing machinery and equipment to facilitate retooling and replacement of obsolete parts; the recent increase in the price of electricity tariff, LPFO, AGO should also be addressed including downward review of corporate tax to 20 per cent and removal of VAT on raw materials."

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