The Manufacturers Association of Nigeria has disclosed that it held a consultative meeting with the Nigeria Customs Service to review the untold hardship the closure of the borders was having on businesses engaging in importation of their raw materials and distribution of finished goods in the West African sub-region.
The President of MAN, Mr Mansur Ahmed, said this on Thursday in Lagos on the sidelines of the 2019 MAN Reporter of the year award/Annual Media Luncheon.
Ahmed said many of the members of the association who carried out genuine business along the West African corridor by road were currently having their activities impeded by the closure.
While he noted that the border closure had benefitted those in the agricultural sector, especially rice and poultry subsectors, he explained that the government would intervene to ensure that many members’ businesses affected did not suffer unduly.
He said, “Many of our members are being affected negatively by the border closure, especially those engaged in the import of their raw materials and the export of their goods in the sub-region. We had interaction with the Nigeria Customs Service two weeks ago in Abuja.
“Even if the government will not to open the borders, they need to make sure that the effect of the closure is less painful on our members.
“We want to make sure our own sector is not negatively affected.”
Our correspondent had reported that many companies which operate in the Fast Moving Consumer Goods sector currently had to spend more in exporting their finished products to the West African sub-region and importing some condiments used in the production of their products.
Investigation revealed that such businesses affected now go through the seaports, and this takes longer time and cost more money.
Ahmed who has been confirmed as the substantive Chairman of the Pan African Manufacturers Association, the umbrella body of manufacturers in Africa, noted that before the African Continental Free Trade Agreement would kick off in July, there was a need for the government to address the infrastructural deficit, especially roads, electricity and monetary policies.
He warned that if these were not addressed, Nigeria and manufacturers might not be able to compete with their peers in the sub-region, adding that it would amount to opening business for other countries to dump their goods on the country.
Ahmed said as the chairman of PAMA, his main objective was to bring African manufacturers together to jointly engage governments of the African continent to create a conducive and enabling environment for local businesses to thrive.
He said, “For the gains of AfCFTA to be realised, government must show readiness in addressing the supply side constraints of lack of infrastructure; and policies and regulations not being too harsh for businesses to operate.
“Rather, regulations should be seen as a way of assisting businesses to grow which ultimately enhance competitiveness and boost the economies.
“As the association remains at the forefront for setting the pace for engagement with other African manufacturers, the Nigerian government must also lead by example in ensuring that policies are industry friendly as this is the only guarantee for a competitive intra-African trade.”
He added, “We cannot achieve competitiveness without the provision of infrastructure such as good road networks and electricity, not only within African countries but also across the borders.
“There is also the aspect of provision of soft infrastructure – like visa, tariffs, and foreign exchange – that will help ease up the process of carrying out business transactions between countries. We must address all these issues since the AfCFTA is not just about trade in goods but also trade in services.”
Ahmed said that the proposed hike in electricity tariff by the 11 Discos should be discouraged, as this would have negative impact on businesses, arguing that presently electricity constituted 40 per cent of the cost of production by manufacturers.
He called for reduction in electricity tariffs to boost productivity and shore up the economy.
Ahmed said, “Increasing the tariff of this core input will have negative effect on the Gross National Product, disposable income, consumption, consumer price index, employment, government revenue from corporate taxation etc.
“Similar to this is the uneven pricing of this commodity across DisCos, which if not corrected, will lead to uneven development in certain parts of Nigeria, as the percentage increase in tariff differs.
“A reduction in electricity tariff for industrial purpose is more ideal but even if it cannot be reduced, it should not be increased. Any increase in the tariff will reinforce the already high cost manufacturing environment and further depress productivity in the sector.”
Ahmed appealed to the government, being a major stakeholder in the electricity industry, to concentrate on developing processes and polices to attract significant investment to encourage large scale power generation and significant improvement in transmission and distribution.
He added that it was important for the government to ensure adequate and appropriate consultations with stakeholders in the private sector on decisions with far-reaching implications.