Posted by News Express | 24 August 2016 | 2,866 times
Members of the Organised Private Sector (OPS) in Nigeria on Tuesday appraised the monetary and fiscal policies of the Federal Government and concluded that they were anti-investment and have paralysed the economy.
They said that instead of reflating the economy, the President Muhammadu Buhari administration was diminishing it through unfriendly economic policies which have forced hundreds of companies to close shop or to relocate to Nigeria’s neighbouring countries, causing massive job losses.
They asserted that 272 companies have shut down while 180,000 jobs have been lost since President Buhari came into office on May 29, 2015.
The parlous state of the economy was reviewed in Lagos on Tuesday by the OPS members – the Manufacturers Association of Nigeria (MAN), the National Association of Small and Medium Enterprises (NASME) and the Lagos Chamber of Commerce and Industries (LCCI).
They spoke at a forum tagged the “Stakeholders Dialogue on the Manufacturing Sector in Nigeria,” organised by NOIPoll and the Centre for the Study of the Economics of Africa (CSEA).
The OPS operators said that following unhealthy economic policies in the county, investors had declined to repatriate and inject funds into the economy to the tune of about $10 billion.
In his presentation, the Director, Research and Advocacy of LCCI, Mr. Vincent Nwani, called for the immediate review of the Central Bank of Nigeria (CBN’s) policy on the restriction of access to foreign exchange placed on 41 items.
The CBN Governor, Mr. Godwin Emefiele, had recently maintained that it had no intention of reviewing the list of the 41 items excluded from foreign exchange access, adding that it was yielding the desired result.
But Mr. Nwani maintained that the CBN has no option but to review that list, citing that about 16 of the items in the list are critical raw materials for intermediate goods produced in Nigeria, which are yet to be optimally manufactured in the country.
He said that the ban on palm oil had led to the loss of about 100,000 jobs over the last couple of months, with major blue chip companies in Nigeria moving to the neighbouring countries; while the ban on glass and glassware had led to the loss of 80,000 jobs in the pharmaceutical industry, as companies in the sub-sector find it difficult to package their products.
According to him, “Local production of oil palm is put at about 600 metric tonnes annually, but the total demand of the country is put at about 1.8 million metric tonnes. Today, Presco Oil has orders of up to December 2017 to fill because it is presently hard pressed with demands. Listing oil palms among the restricted items meant that we have a shortfall of about 1.2 million metric tonnes.
“Some of the items placed on the restriction list by the CBN should be restated until the country develops the capacity to produce them locally. Some of the items need a period of between three and seven years for the country to develop self-sufficiency in their production.
“For instance, it takes a minimum of five years for oil palm to be planted and harvested. The CBN should have given us more time. The manufacturing and industrial sectors lost about N1.4 trillion as a result of foreign exchange issues, while about 780 raw materials needed by the sector were affected by the restrictions placed by the CBN,” he said.
The Director of Economics and Statistics in MAN, Mr. Ambrose Oruche, decried the high interest rate and poor access to foreign exchange, which, according to them, has hindered growth in the industry.
Oruche said that the decision by the Federal Government to increase the interest rate to 14 percent was not well thought out.
He said the government ought to have increased growth in the economy and not contract it, stressing that that there have been inconsistencies in government’s policies.
Like Nwani, Oruche said that the government’s exclusion of 41 items was not done in the interest of the manufacturing industries.
He said: “Since the crash in crude oil prices in 2014, manufacturing has been almost impossible in the country. The major challenge is that of maintaining sizeable capacity utilisation due to the unavailability of raw materials.
“Sadly, some policies implemented to curb the fall of the Naira were inimical to manufacturing industries and MAN ought to have been consulted before the ban of the 41 items.
“And the increase in MPR to 14 percent has made it difficult for manufacturers to get funds to do businesses,” he lamented.
Similarly, a consultant with NOIPolls, Dr. Olamide Taiwo, said that studies by the outfit showed that only five percent of manufacturers were in good shape.
He said there is a high dependence on imports and exports remain low and these affect the growth of the manufacturing industry.
Taiwo further said that only local demands drive profitability in business and that poor power supply and policy inconsistency were challenges of the industry.
He therefore urged the government to implement import substitution programmes and ensure a strategic foreign exchange window for manufacturers.
At a separate forum in Abuja, the President, Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, lamented that banks were hesitant in selling foreign exchange to its members. He said that at present, only about nine percent of BDCs had access to foreign exchange sales by banks.
He claimed that BDCs with access to Forex were only those located in Lagos – while others had no access, adding that the situation was compounded by the stringent conditions being given by banks to his members.
•Source: The AUTHORITY. Photo shows President Buhari.