The Manufacturers Association of Nigeria (MAN), has decried the rising cost of diesel in the country and urged the Federal Government to issue its members licences to import the product from the Republic of Niger and Chad.
The association, which raised the alarm that industries were being converted to warehouses of imported goods and event centres, also called on the FG to avert the total shutdown of production operations.
The Director-General of MAN, Mr. Segun Ajayi-Kadir, made the call in a statement issued yesterday in Lagos.
MAN represents more than 3,000 manufacturers spread across 10 sectors, 76 sub-sectors, and 16 industrial zones.
The manufacturing sector, which dominates export trade in the West African sub-region, employs more than five million workers, directly and indirectly, and contributes 8.46 per cent to the nation’s Gross Domestic Product (GDP).
Ajayi-Kadir stated that the call was pertinent during times of crisis to enhance the performance of the sector through a pro-manufacturing policy that would encourage scale-up and lower unit cost of production.
He added that the manufacturing sector had been battered by many familiar challenges that had plummeted the number of industries and converted industrial hubs to warehouses of imported goods and event centres.
The MAN president also stated that top on the list of challenges confronting the sector was high operating cost caused by the twin problem of inadequate electricity supply and the high cost of alternative energy sources.
He added that the more than 200 per cent increase in the price of diesel had become a major constraint with spiral effects.
“MAN is greatly concerned about the implications of the over 200 per cent increase in the price of diesel on the Nigerian economy and the manufacturing sector in particular.
“More worrisome is the deafening silence from the public sector as regards the plight of manufacturers,’’ he stated.
Ajayi-Kadir urged the government to strengthen the nation’s economic absorbers from external shocks to reduce the myriad challenges the manufacturing sector was already beguiled with.
He stated that by the time the current domestic reserve of manufacturing inputs was exhausted, prices of manufactured products would soar in the face of an acute shortfall in supply.
Ajayi-Kadir added that government should continue to support manufacturing to accelerate the process of recovery from the aftermath of COVID-19 and previous bouts of recession.
This, he explained, would avert a complete shutdown of factories nationwide.
He urged the government to issue licenses to manufacturing concerns and operators in the aviation industry to import diesel and aviation fuel directly to avert the avoidable monumental paralysis of manufacturing.
Ajayi-Kadir also called for the removal of VAT on diesel as an instant stimulus for an immediate price reduction and expedite action in reactivating or privatising petroleum products refineries in the country.
“As a matter of urgency, the government should address the challenge of repeated collapses of the national grid which is causing acute electricity shortage, especially for manufacturers,’’ he stressed.
Meanwhile, MAN has also asked the federal government to issue its members licences to import diesel from the Republic of Niger and Chad, Nigeria’s neighbouring countries, to avert the avoidable monumental paralysis of manufacturing activities that could arise from the total shut down of production operations.
The MAN also tasked the government to develop a response strategy to address challenges emanating from the armed conflict between Russia and Ukraine.
The MAN said: “In light of the gravity of the precarious situation that we have found ourselves as a nation and the looming dangers ahead, the expectations of manufacturers in Nigeria are as follows: that government should urgently allow manufacturers and independent petroleum products marketing companies to also import AGO (diesel) from the Republic of Niger and Chad by immediately opening up border posts in that axis to cushion the effect of the supply gap driven the high cost of AGO (Automotive Gas Oil).”
The association also requested the government to “issue licences to manufacturing concerns and operators in the aviation industry to import diesel and aviation fuel directly to avert the avoidable monumental paralysis of manufacturing activities arising from total shut down of production operations and movement of persons for business activities.”
Ajayi-Kadir noted that Nigerian manufacturers are greatly concerned about the implications of the over 200 per cent increase in the price of AGO on the Nigerian economy and the manufacturing sector.
“More worrisome is the deafening silence from the public sector as regards the plight of manufacturers. Four obvious questions that readily come to mind that are seriously begging for answers are: What can we do as a nation to strengthen our economic absorbers from external shocks? Should manufacturing companies that are already battered with multiple taxes, poor access to foreign exchange, and now over 200 per cent increase in the price of diesel be advised to shut down operations? Should we fold our arms and allow the economy to slip into the valley of recession again? Is the nation well equipped to manage the resulting explosive inflation and unemployment rates?” He asked.
It also implored the government to “continue to support manufacturing to accelerate the process of recovery from the aftermath of COVID-19 and previous bouts of recession to avert the complete shutdown of factories nationwide with a multiplier effect on the employment.”
The MAN also asked the federal government to “as a matter of priority develops a National Response and Sustainability Strategy (NRSS) to address challenges emanating from the ongoing invasion of Ukraine by Russia.”
The MAN also tasked the government to “address the challenge of the repeated collapse of the national grid (twice within a week), which is causing acute electricity shortage in the country, especially for manufacturers,” adding that government should “remove VAT on AGO as an instant stimulus for an immediate price reduction and expedite action in reactivating or privatising the petroleum products refineries in the country.”
It also demanded that the government should “restrict the export of maize, cassava, wheat, food-related products and other manufacturing inputs available in the country; and grant concessional foreign exchange allocation at the official rate to manufacturers for the importation of productive inputs that are not locally available.