The Manufacturing Association of Nigeria (MAN) has tasked the government to reverse the VAT rate to five percent (5%) and recapitalize the Bank of Industry (BOI) and the Bank of Agriculture (BOA). This, according to MAN, will spur consumption and increase demand, and enhance access to credit by operators in the real sector of the Nigerian economy.
These calls were contained in the MAN’s CEOs Confidence Index (MCCI) report for the Second Quarter of 2021, which made a number of recommendations to the federal government on how to improve the fortunes of the Nigerian manufacturers.
The report, which was released on Thursday, recommended the “recapitalization of the BOI and the BOA to adequately meet the industry credit need at single-digit interest rate; Providing a credit guarantee for industrial loans from commercial banks; Direct intervention from the governor of the Central Bank of Nigeria (CBN) to ensure that members of the MAN access the funds, particularly the N1trillion COVID-19 stimulus package.”
It also demanded that the federal government should “reverse the Value Added Tax’s rate back to the pre-2020 Finance Act rate to improve the disposable income of Nigerian workers, stimulate consumption, promote an upsurge in demand and increase production output.”
The MAN asked that it should be updated on the current feasibility of the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMED) and N300 billion Real Sector Support Facility (RSSF) and how its members could access it.
It decried the unavailability of raw materials needed for the manufacturing process in the country and tasked the government to select “strategic product for backward integration” and add further impetus to the drive for the country’s “resource-based industrialization agenda and encourage investment in the development of machines, iron and steel, and the petrochemical sectors to support manufacturing.”
The association also urged the federal government to “monitor, evaluate and enforce the implementation of Executive Order 003 to ensure compliance by MDAs.
The MAN’s MCCI stated that in the second quarter of 2021, the normalcy and tranquility experienced in the economy in the first quarter of the year was sustained as business activities increasingly rebounded from the hangover of the COVID-19 pandemic.
“This is corroborated by the increase in MCCI scores for the second quarter of the year to 52.9 points from 49.1 points recorded in the first quarter. The index score of 52.9 points in the quarter under review was the first it stayed above the 50 neutral points since the first quarter of 2020.