For us in the manufacturing sector, even though most of our transaction in terms of purchasing of raw materials is done electronically, we still do some of our buying in cash. And the purpose of manufacturing is to sell. And selling takes place typically at the retail end where you have most people using cash. Even in some cases where we have to gather our raw material from the local area where cash is key, you really have to make those purchases from the farmers when you are aggregating the input for your manufacturing.
Need for Conversation
So the cash crunch is high and in recent time when we had the Supreme Court ruling and the CBN said they were going to supply, we had high hopes that it would end soon. But I think that there are still some conversation that needs to happen between the CBN and the Judiciary so that they can find an amicable way to allow the suffering to abate. There has to be a way of implementing the Supreme Court judgment in such a way that it does not only take away the prerogative of the CBN to manage our monetary policy and how we spend money. I think there has to be a high level conversation between them so that the suffering of the people is reduced and also so that businesses can function effectively.
Manufacturers Confidence Index
Yes I think our MCI which you rightly mentioned has continued to indicate how manufacturers feel about the economy and we have warned at the end of last year that manufacturing was heading for a recession and that everything should be done to avoid it. And this is being demonstrated in the confidence of the manufacturers, in the business environment which we operate, in the employment and also in how we see the next three months. We have given indication now that we have less confidence. I believe what government should do is very simple. However, it becomes competitive when you see that we are in a transition period. And this leads us to what we expect from the incoming administration.
Forex Allocation
We ensure the prioritization of allocation of forex because it is top three in what has led to the dip in confidence of manufacturers. We prioritize the little allocation we have to the productive sector. We have mentioned this severally.
The CBN has to be able to have a dialogue especially with the manufacturing sector. We have day-in-day-out submitted Form M numbers that we have filled, for our import and export. We have indicated how much we have asked from the money deposit banks. We have submitted these records diligently to the CBN as agreed. But nothing has been done to see that there is any leeway for the manufacturing sector even though we are the ones that repatriate our profits from exports diligently.
Power Supply
There is also the need for us to ensure that we increase the power supply. What has continued to be on the table is the eligible customer scheme that would have allowed manufacturers to take power from TCN. This is government policy but some bureaucratic bottleneck have been put in place to limit or to checkmate access to this eligible customer scheme.
Insecurity
We also need to look at the issue of insecurity that has led to 60 per cent loss of manufacturing industries in the North-East. We are saying that now that we are experiencing some relative security in those areas, the state and federal governments should deliberately incentivize the coming on board again of manufacturing industries that have been shut.
Policy
Of course there are quite a number of things that we have said about policy. For instance, we have a fiscal policy that we have always emphasized: the increase in exercise duty for the Food, Beverage and Tobacco goods, that is the leading sector in the economy, should not be allowed to start. Luckily, this is yet to start. So somewhere between the outgoing and the incoming administration, we should make sure we put this one hold.
Multiple Taxation
We have seen the rise in the multiplicity of taxes into the election period. But now that the first stage of the election has been completed, government should deliberately de-escalate the risk to manufacturing by ensuring that multiple taxes that are collected by the three tiers of government are removed. And this can come through dialogue. It is not rocket science. And we have agreed with government on taxes that are collected by the three tiers of government. So I think there should just be the political will.
Story derived from Channels TV recent interview with Segun Ajayi-Kadiri by Siaka Momoh
