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Frustrated, Manufacturers threaten to drop support for govt policies

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Frustrated, Manufacturers threaten to drop support for govt policies

The Federal Government’s hope of getting the country out of recession in 2017 may hit a brick wall if operators in the real sector carry out their threat of total withdrawal of support on policies not tailored at the survival of manufacturing industries in Nigeria.

They have highlighted a number of conditions under which they will support such government policies.

One of the conditions includes government dedication of certain percentage of foreign currencies to the sector.

This is in addition to revisiting Nigeria’s recent consent to opening its borders to imports from other countries, especially Europe.

It would be recalled that Minster of Finance, Kemi Adeosun, had on January 2, 2017, announced that the government had delisted about 83 items from import ban list initiated, with some of them, to attract on 10 duties.

But analysts alleged that Nigeria took the step in a bid to benefit from the European Union’s €26 billion grants for countries in the West African sub-region to develop their commerce and trade, which came with a condition that import restrictions be removed by participating countries.

Read also: IMF blames policy makers for Nigeria’s stunted growth

However, the manufactures, through their umbrella union, the Manufacturers Association Nigeria (MAN), described the policy as part of government’s inability to assist the sector survive the recession.

MAN said more than 300 firms had already closed shops; while 70 per cent of those still manufacturing were currently producing at less than 45 per cent capacity, while more than 2.5 million of their workers have lost their jobs in the past two years.

According to them, the data released by the Central Bank of Nigeria (CBN), indicating that the industrial sector recorded a decline of 45 per cent between January and November of 2016 was caused by the fall in Purchasing Managers Index (PMI) of Nigeria in the year.

When compared with the records of 2014 and 2015, they said it showed that the real sector was on the brink of total collapse.

The MAN President, Dr. Frank Jacobs, argued that until government declares a state of emergency in the real sector, exit from the recession would be a mirage.

“Our members are facing worse challenge more than any other sector and that is because without availability of foreign exchange, we can’t continue with production, but the idea of building the economy on mere commerce has never helped any country,” he said.

On government promise to place emphasis on infrastructure development in the 2017 budget proposal, he said if that is executed to the letter, it will solve the problem of unstable power supply which is taking more than 50 per cent of manufacturers’ budgets.”

Olufemi Ogunkoya, the chairman of Remix Aluminum Company Nigeria Limited said the government had not done anything to reduce the price of industrial gas, despite the special request that manufacturers had severally made to that effect.

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