IN the face of rising costs, low sales and worsening business confidence, stakeholders are calling for urgent actions to raise the bar of industrialisation, TOBI AWODIPE writes.
Business activities in the private sector are off to a poor start in the second half of the year, showing a contraction in key indices. A recent purchasing managers’ index (PMI) revealed a reading of 49.2 points in July and attributed this deterioration to renewed reductions in output and new orders, rising production costs, sky-high inflation and record-low business confidence, amongst others. 
Manufacturers and other stakeholders in the real sector say the deterioration does not come as a surprise, as it has been obvious that the industry has been hobbled by a multitude of problems with no visible solutions in sight. They regretted that despite listing out their many challenges and offering countless solutions, their situation continued to deteriorate.
They said while things look quite bleak, with many businesses packing up and multinationals exiting the country, hope is still not lost. They argued that if the federal government keeps to its promises and carries out the many promised fiscal changes, the sector’s fortunes can still be turned around positively.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, called for the execution of immediate policy fiscal-driven measures, especially on import duty, which he said was stated in the economic stabilisation plan. He said critical materials like raw materials, machinery and key inputs imports should receive import duty concessions. Yusuf also advocated concessions in the areas of taxation and levies imposed on businesses and industries.
“All the executive orders should be followed to the letter and we must expand the scope of development finance. No manufacturer can produce with the current cost of credit being offered by commercial banks. The federal government must fund development banks, which can in turn offer longer credit at single digits to businesses. Other ways to revitalise the sector include improving critical infrastructure like roads, electricity and so on,” he said.
Also, the Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Sola Obadimu, said a cursory look at all business indices, which are worsening daily, revealed that there are no shortcuts to reviving the sector and government must be ready to commit to saving the industry. He regretted that no long-term strategies have been/are being put in place to help the industry.
“All indices are very poor; how do we expect businesses to survive? This is exactly why multinationals are leaving in their numbers,” he stressed.
Adding that the recent presidential address did not address the elephant in the room, he said the staggering cost of governance continues to be ignored at the detriment of a failing real sector.
“Funds that could have been pumped into the real sector to save it from collapse are being frittered away on public officials, while the cost of governance keeps going up daily instead of being slashed. We cannot continue to waste resources on public officials. How can you tell the followership to tighten their belts while the leadership is living large?” he queried.
Urging the president to review its economic team immediately, the President of the Association of Small Business Owners of Nigeria (ASBON), Femi Egbesola, said any sectoral respite will have to come straight from the presidency.
“Ease of doing business in Nigeria is currently words alone as there is no true ease for businesses and industries. Government should as a matter of urgency, fix critical infrastructure and give us respite in terms of electricity and alternative energy. High energy cost is one of the major reasons businesses are folding up and the recent tariff increase is not helping matters. Currently, we spend over N9 million monthly on diesel and electricity tariff, imagine if this amount is poured back into the business instead of wasting it on diesel. This is the reality of many industries; with some others spending 10 times this amount on diesel alone monthly.” Pleading for more consistency in government policy, he urged that local goods be allowed to thrive without unfair competition from imported ones.
“On needed interventions, the government must fund the real sector as a matter of urgency. Working capital for most manufacturers has been depleted due to the poor economy. Government promised manufacturers several funds and grants, but we have yet to see anything. Address all the unhealthy and unhelpful policies affecting us; that is what we want,” he said.
