Manufacturers List Poor Electricity, Multiple Taxation As Major Operational Challenges – Survey

Manufacturers List Poor Electricity, Multiple Taxation As Major Operational Challenges


Manufacturers have listed poor electricity, multiple taxations, high-interest rates, and poor accessibility to ports as parts of challenges affecting the operational capacity of companies in Nigeria.

This is according to a quarterly Manufacturers CEOs Confidence Index (MCCI), conducted by the Manufacturers Association of Nigeria (MAN) to measure the pulse of the manufacturing sector.

The survey which captured the First Quarter of 2019, had over 200 Chief Executive Officers (CEOs) of MAN member-companies across the six geo-political zones of the country and the ten Sectoral Groups of the Association, respond to questionnaires in a bid to identify key areas that need review.

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The result from the first quarter survey showed that manufacturing stood at 51.3 points, slightly above the minimum 50 points threshold of good performance.

This implies that the Manufacturing sector is still struggling as operators have a seemingly low confidence level but a high expectation that manufacturing performance will improve.

On Capital Expenditure, the majority of respondents did not agree that Government implementation encouraged productivity in the sector.

The Association affirmed the survey by highlighting the available poor economic infrastructure such as inadequate power supply, bad road network, high cost of abstracting water, low patronage and many more.

Meanwhile, 92 percent of the CEOs interviewed, agreed that multiple taxes and levies depress production in the manufacturing sector.

They also agreed that poor access to national ports and the associated gridlock negatively affects productivity in the manufacturing sector.

Although, 44 percent of respondents, agreed that the level of local sourcing of raw-materials has improved in the manufacturing sector. While 37 percent disagreed, and the remaining 19 percent were not sure if local sourcing of raw-materials has improved in the sector.

Effect of Executive Order 003 was also examined and 40 percent disagreed that patronage of Nigeria manufactured products has improved based on the order which mandated all Government establishments to make Nigerian manufactured goods first choice in their procurement processes.

The manufacturers recommended that the Government must make conscious efforts to repair and expand the roads leading to Lagos Ports, make other ports outside Lagos, functional so as to address the gridlock challenges and the associated cost.

They also asked that Forex should be made available for the purchase of manufacturing inputs and there should be a continuous improvement on the power supply and the general upgrade of the nation’s infrastructure.

The survey highlighted that the Capital Expenditure component of the National budget should be conscientiously implemented to bridge the infrastructure gap in the country.

VAT Increase: Economy Will Be More Vulnerable, Manufacturers Warn Nigerian Govt

VAT Increase: Economy Will Be More Vulnerable, Manufacturers Warn FG


The Manufacturers Association of Nigeria (MAN) has asked the Federal Government to tread with caution in the drive for improved revenue.

The Director-General of MAN, Mr Segun Ajayi-Kadir, said this in a statement on Wednesday while reacting to the plan by the government to increase the Value Added Tax (VAT).

Officials of the Federal Ministry of Finance had defended the Medium-Term Expenditure Framework (MTEF) that VAT be increased by 50 per cent during a presentation in the Senate.

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Ajayi-Kadir, however, said such policy was not ‘manufacturing friendly’, adding that implementing it would have a negative effect as a result of the planned increase in minimum wage.

“As plausible as the recommendation to increase VAT may look, implementing it at this time would boomerang because the timing is inappropriate, especially at a time when the minimum wage of N30,000 was just agreed upon,” he stated.

The MAN DG added, “This could send a wrong signal that the government is not sensitive to the plight of the low- and middle-income earners, who are clearly in the majority. The Nigerian economy will be in a more vulnerable state if VAT is increased.

“No controversy, the burden of the tax would be shifted to the Nigerian consumers that are already struggling, the economy would certainly experience demand crunch, inventory of unsold items would soar, profitability of manufacturing concerns would be negatively impacted, many factories will witness serious downturn or wind down operations.”

Ajayi-Kadiri, therefore, advised the government to widen the tax net rather than increase the rate in order to meet the growing need for more revenue to address the development objective of the country.

He also appealed to the government not to increase the VAT at this time but consider the implementation of the afore-mentioned tax specific recommendations.

The MAN DG asked the government to continue to ramp-up support for the manufacturing sector in the best interest of the people.

Trump Vows To Protect ‘Made In America’ Products

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President Donald Trump promised on Monday he would take more legal and regulatory steps during the next six months to protect United States manufacturers, lashing out against trade deals and trade practices he said have hurt U.S. companies.

Trump climbed into an American-made fire truck parked behind the White House, took a swing with a baseball bat in the Blue Room, and briefly donned a customised Stetson cowboy hat in front of cheering manufacturing company executives from all 50 states gathered to hear him praise their products.

“American workers, farmers and innovators are really the best in the world, we know that and what we’re doing is we’re displaying those talents. You construct and harvest the products that fill our homes, feed our families and defend our nation and enrich our lives,” Trump said.

“I want to make a pledge to each and every one of you: no longer are we going to allow other countries to break the rules, steal our jobs and drain our wealth, and it has been drained, it has been drained.”

He was speaking to a trade show – albeit one with a protectionist bent – organised by the White House to spotlight his efforts to revive the flagging manufacturing sector.

Trump did not give details about what his administration would do to protect manufacturers, other than lower corporate taxes and repeal Obamacare, but he railed against tariffs charged by other countries and unfair trade practices. He told the manufacturers that he was working for a “level playing field” for their wares.

He said, “For our nation to really prosper, we must lower the tax on business– one of the highest in the world– and we must repeal job-killing Obamacare, we have to do that. And I can tell you, we hope John McCain gets better very soon because we miss him.

“He’s a crusty voice in Washington; plus, we need his vote. And he’ll be back. And he will be back sooner than somebody else would be back. He’ll be back soon. But we need that vote and we need a number of votes because we do have to repeal Obamacare and we will end up replacing it with something that is going to be outstanding. Far, far better.”

Manufacturers Threaten To Sue Kwara Government Over Tax Plan

There seems to be no love lost between the manufacturers in Kwara and the state government over the plan of the government to introduce new tax called manufacturers processing levy bill which the manufacturers consider too many.

While the businessmen have threatened to relocate to other states or sue the government, the governor has insisted he has done enough to provide a conducive environment for various tax holidays.

The Kwara State government had, in order to further increase its internally generated revenue, sent a bill known as the Manufacturers Processing Levy Bill, to the state House of Assembly where a public sitting was held to get the input of the stakeholders.

Members of the state chapter of the Manufacturers Association of Nigeria, who believe they will be mostly affected by the bill, were not satisfied with the outcome of the hearing.

At a press conference, they described the state government’s move as an effort to kill businesses.

The bill, they argued, did not have the inputs of professional bodies as required by law., wondering why enabling environment was not created by the government before introducing another tax despite paying 21 taxes.

They wondered why an enabling environment was not created by the government before the introducing another tax, even though they were already paying 21 taxes.

While pleading with the State House of Assembly not to pass the bill, the manufacturers said it could lead to the relocation of their businesses to nearby states.

Reacting to the plea of the manufacturers in a meeting with journalists to mark the 50th anniversary of the state, the Governor Abdulfatah Ahmed denied introducing new tax adding that no multiple taxations in the state but increased efficiency in the collection.

Commenting on the proposed bill, he asked those against it to wait for the outcome of the deliberations as the state legislatures and the government have provided an enabling environment for businesses to grow in the state.

Economic Recession Hits Manufacturers, Artisans In Nigeria

Tax Net, economic recession, manufacturersIt is not the best of time for manufacturers and artisans in Anambra State in southeast Nigeria, as they lament the harsh economic realities hitting them hard in their various fields.

For the manufacturers, Nigeria has reached the economic stage that demands immediate intervention from any quarter both internal and external, as they could no longer thrive in the fields.

Mr Ken Mmaduakor is into bottled and Sachet water production.

He said previously, the production capacity was 1,500 cartons of 12 bottles each per day but presently, the production capacity had dropped to 300 cartons and workers, in order to continue being useful to themselves, suggested taking slashed salary instead of being laid off completely.

The artisans in Onitsha and Nnewi say they are facing severe and austere period.

Their working tools lie useless with shrunk fingers bearing tell-tale signs of years of hard work with almost nothing to show for it.

For them, the present situation is death itself, as they are willing to work and fend for themselves yet the system that should support them denies them the opportunity.

Every appeal is for the government to urgently come up with ideas that will engender a total reversal of the current situation of things for a happier, prosperous and peaceful Nigeria.

Nigeria’s economy had glided into recession, with figures from the National Bureau of Statistics showing that Nigeria’s Gross Domestic Product (GDP) contracted by 2.06% in the second quarter of 2016

According to the report, the decline has caused the Naira to get weaker while lower oil prices have continued dragged the oil sector down.

The nation depends largely on crude oil for its revenue, but the present government is making efforts to shift the economy away from crude oil to other sectors – agriculture, solid mineral mining and technology among others.