MAN contributes tremendously to Nation’s Economy, to Set Agenda for Next Decade- Ahmed
The Manufacturers Association of Nigeria, (MAN) is celebrating its 50th Anniversary as well as its Annual General Meeting,(AGM). The occasion will witness the end of the current tenure of its President, Engr. Masur Ahmed as well as a change in the Association leadership. The Association held a media briefing recently to announce the programme of the event. However, Gentechnews chronicled the interactive section with the president which could serve as a valedictory remarks on the performance, achievement as well as challenges in the sector. Gentechnews, Editor, Tony Nwakaegho, writes an excerpt on the interactive session with Manufacturers Association of Nigeria president, Engr. Masur Ahmed.
What is the unique difference between the past Manufacturers Association of Nigeria, (MAN) Annual General Meeting, (AGM) and this current year?
The Manufacturers Association of Nigeria, (MAN) has made tremendous progress over the years, last year we celebrated 49th Anniversary, while this year we are celebrating 50th Annual General Meeting as well as its 50th Anniversary. We have celebrated our contributors to the sector over the years, and we thought of how to deepen the sector in the next 10 years. Last year we tried to identify how far we have gone, as well as pitfalls. You are also aware of the circumstances under which we operate, last year, we just came out of COVID and so there was a lot of constraint in the economy and movement in this period. This year, we are happy that the COVID has left us. Now we are using the theme of this current year to think of how we can deepen and strengthen the manufacturing industry going forward. And we are taking the next ten years as a time frame that we think is reasonable to project and predict what we expect should happen. These are some of the significant differences. This year, there was change in the Manufacturers Association of Nigeria’s brand and there will also be seamless change of leadership in the Association during the Annual General Meeting.
What is the Association’s benefit from the relationship with the Central Bank of Nigeria?
We have been engaging the Central Bank of Nigeria(CBN) with the problems with our economy with respect with the financial sector services which has been a source of major concern of our members. For the past two to four years we have engaged and tried to engage the CBN with a view to ensuring that the monetary policies and regulations as applied by the CBN have taken account of the impact on the economy generally and being moderated to minimize the negative impact on the industry. Of course, there have been many areas of success. It will be recalled that at one point, the CBN was distributing foreign exchange through the over 6,000 Bureau de Change, each of them collecting foreign exchange and delivering it to the market as if the foreign exchange was a commodity. But, we at MAN had to engage the CBN very vigorously to ensure that the window was closed. Unfortunately, the impact was significantly undermined by the fact that even as we were trying to limit the way the forex is utilized and made available to all manner of people, we also had a situation where the source of foreign exchange was being reviewed significantly. However, our country depends on the oil industry for its foreign exchange. About 80 percent of our foreign earnings growth depends on the oil industry and unfortunately during this period three things happened. First of all, our projection level of oil fell down quite significantly over the period and therefore an equal amount of foreign exchange that was earned was utilized. Secondly, the exchange rate itself shot up over the period. Where there was some success in this there was little we could do with the amount of forex that was produced except to go and meet the government. But we must do whatever is necessary to prevent the leakages in our oil industry. There were leakages in the oil sector as confirmed by the minister of finance and there was huge loss of foreign exchange. Over 200,000 barrels of oil were lost per day through leakages and theft of oil. Over the past several years government external borrowing has increased significantly. A lot of the foreign exchange is being used to service external debt. All these have undermined the availability of foreign exchange. The issue of forex has gone beyond the capacity of the CBN. Now, there has been slight improvement in forex from CBN, but it is simply not enough; hence we continue to mount pressure on CBN to prioritize and consider the manufacturing sector as critical in the provision and availability of foreign exchange. We also pushed our members to reduce their own foreign exchange demand by looking inward for the raw materials that they are sourcing from abroad. Indeed, the sub sector like the Sugar Industry and Food industry have made tremendous progress in teams, sourcing local raw materials for their industries, but the process of sourcing these local raw materials for their industry is so slow. There are also policy measures by the government that encourage backward integration. Indeed, in teams of the food industry, we have made tremendous progress in areas such as grains, rice, and maize. There has been tremendous progress in output and source of availability of raw material for our industries. That is what MAN is there for to continue to engage rather than confront to increase the number of industries, rather than reduce the number of industries.
Briefly give an insight of how government policies affected the sector and reasons why many companies have shut down?
We have been interacting with the Ministry, Departments and agencies (MDAs) and CBN with a view to try and minimize the possibility of industry shutdown. However, quite a few sectors of the Small and Medium Scale industries have shut down. The impact of poor policies and tax policies have a tremendous negative impact on the growth rate of the sector, there has been significant decline as well as stagnation in capacity utilization which is reported by the Manufacturers CEO’s performance index.
What is your take on the issue of unhealthy trade relationships with the Benin Republic?
Despite the fact that under the African Continental Free Trade Area (AfCFTA) we expect trade liberalization across African countries, even more importantly the ECOWAS Free Movement Protocol agreement has already provided appropriate framework for transport across West Africa, but the Benin Republic has been intransigent in allowing trucks to move across the country. Indeed, we have taken this issue to the government at various levels. There have been meetings within the relevant agencies within the Benin Republic and Nigeria. I have taken my team to Benin Republic over this issue. Trade issues between countries take time to resolve. We are watching the process, continuing discussion and negotiation in the matter. We will continue to keep putting up pressure for this issue to be resolved.
What is the association doing as some members’ businesses are being shut down due to multiple taxation and now Dangote Cement in Kogi State has been scaled?
The closure of Dangote Cement plant in Obajana by the Kogi State government is worrisome, unwarranted and totally illegitimate. It is shocking and a thing of tremendous concern that a government will shut down a plant that provides jobs and economic activities on a very large scale to the people of Kogi State. The appropriate thing the state government should do over its alleged claim of payment of taxes is to take the company to court and not use strong arm tactics to shut down the company and introduce severe restriction on the company. We have taken the matter to the minister of Industry. I believe Dangote pays its taxes as and when due. I am aware that Dangote Company is the highest tax paying company in Nigeria. If there is any claim of tax issue by the Kogi State government, they have ways and means to recover the tax other than closure of the company. We are totally opposed to such a measure and we want to ensure that such a measure is not repeated.
Government introduction of excise duty on non-alcoholic drinks since 10 months. What is the impact of this excise duty on this sector?
We are aware that the Government was trying to increase excise duty on non-alcoholic drinks and other sub sectors of our industry. We have engaged the Ministry of Finance, particularly the Technical Committee on Tariff which is the agency that is looking at this matter. People have been participating in the discussion and we have made our presentation known that this new tax excise duty will only compound the situation. We know that the government agencies are under pressure to raise their revenue bases, but that in rising new revenue you need to be sure that you don’t undermine the revenue process in itself. If in the process of trying to increase revenue you put more pressure on the few citizens that are paying taxes it will reduce their capacity to move forward because any increase in excise duty will increase the cost of production. We are already aware of the impact of inflation on the ordinary Nigerian. Nigerians are already getting to their limits on what they can spend and if you now increase the tax, it means that the demand for goods will go down. We informed them that the new increased tax rate will bring increased pressure on the sector and should know that the company capacity to produce and sell will be reduced. They should not increase tax at a time when the economy is contracting. New UK Prime Minister wants to cut down tax and so that with the cut you can create more avenues to pay more tax and create more wealth. This type of situation in Nigeria will make it difficult for our economy to grow. They should not undermine the capacity of our members in paying the taxes that they are even paying now. Our position is that this is not the time to increase taxes and even the existing tax rates. Many institutions are being created with a target to raise revenues. We want the government to reconsider this and help our industry to grow and expand for them to increase taxes. Government should not undermine our members’ capacity to pay their taxes now.
Now that your tenure has come to an end, what would you be remembered for and what could you have done that time did not permit?
When I came on board about four years ago, I had a six-point agenda. We actually had three plans, but the pandemic and its restriction stopped it. However, we have been able to raise the activities of the sector in its contribution to the economy to about nine to nine and half per cent. We have been more resilient to achieving it, and this is a measure of success. During the period of the pandemic, we were able to engage all our stakeholders focusing on the pharmaceutical and food sectors. We now have stronger manufacturing industries. However, I could have loved to see stronger industries, a transformation of the industries in which high technologies are being applied and to encourage our members to source their raw materials locally; members to reduce their demand for foreign exchange and source for funds in-house and do things differently. Nigeria and Nigerians are making tremendous progress in technology and I will love to see transformation of our industries where more of these new technologies are being applied in our industries. We must continue to encourage our members to see how they could source for local raw materials across the country. We have achieved some tremendous successes that I like to leave for my successor to continue.
