The Manufacturers Association of Nigeria (MAN) has called on the Federal Government to recapitalise the Bank of Industry (BOI) to address the rising credit needs of industries across the nation.
The recommendation was part of MAN’s position paper on Nigeria’s third-quarter Gross Domestic Product (GDP).
In the document, MAN highlighted the importance of improving credit access for industries by enhancing credit information systems and broadening the range of acceptable assets for collateral. “It is critical to create special windows for providing single-digit interest rates to productive sectors and relax stringent conditions for SMEs to access funding,” the association stated.
MAN raised concerns over the Central Bank of Nigeria’s (CBN) continuous hikes in the Monetary Policy Rate (MPR), which have driven the average interest rate on loans to manufacturers to 28.1% in the second half of 2023. This, according to the association, resulted in an estimated N341 billion in losses for the manufacturing sector during the period.
To alleviate these challenges, MAN urged the government to maintain the current excise duty of N10 per litre on non-alcoholic beverages, warning that further hikes could jeopardize the industry.
MAN also appealed to the government to address outstanding foreign exchange obligations, stating, “It is important for the government to direct the Central Bank of Nigeria to clear $2.4 billion in FX forward contracts to support manufacturers.” Additionally, the group advocated for a review of import duty rates on production inputs not available locally, suggesting a pegged rate of N800 to facilitate manufacturing competitiveness.
In its recommendations, MAN called for prioritising infrastructure development along key economic hubs through increased budgetary allocations and public-private partnerships. The association urged the Federal Government to streamline customs procedures using technology and decentralise seaport operations to improve efficiency.
Regarding electricity, MAN requested that the Nigerian Electricity Regulatory Commission (NERC) review high tariffs for Band A customers and enforce Naira-based pricing for gas supplied to manufacturers. “Transparency in tariff charges, infrastructure improvements by Distribution Companies, and the introduction of outage compensation mechanisms are essential,” the association noted.
MAN’s position underscores the urgent need for comprehensive policy reforms to bolster Nigeria’s manufacturing sector, which remains critical to the nation’s economic growth and development.
