New Telegraph

MAN to Tinubu: Assess Progress of Fuel Subsidy Removal on Economy

The Manufacturers Association of Nigeria (MAN) has called on President Bola Tinubu to conduct a comprehensive assessment of fuel subsidy removal and other policy measures on the country’s economy. This is with a view to identifying potential challenges and opportunities for the private sector and inform further adjustments to the policies if necessary. The President of MAN, Otunba Francis Meshioye, made this known to New Telegraph in an interview in Lagos recently.

The MAN president also said government should engage in a constructive dialogue with the stakeholders in the private sector to share their concerns, provide feedback on the potential impacts of the policy changes, and collaborate on finding solutions to mitigate adverse effects on businesses. Meshioye explained that government should provide clear and consistent policies to provide certainty for businesses, emphasising that frequent policy changes and uncertainties could hinder long-term investments and growth.

According to him, manufacturers, Micro, Small and Medium scale Enterprises (MSMEs) and private sector players are still grappling with challenges that began at the beginning of this year. The MAN helmsman explained that 2023 started with uncertainty in the economy as a result of naira redesign policy of the Central Bank of Nigeria (CBN) and the usual dormant economic activities prior to general election.

He stated that the re-infusion of the old currency notes, which was initially moved out of circulation, brought a promising outlook to the economy. Consequently, a short-lived up- tick in economic activities, especially in the informal sector, was experienced. His words: “The effect of the naira redesign programme and slow economic activities was reflected in the GDP data released by the National Bureau of Statistics (NBS), showing that the economy slowed to 2.31 per cent and 2.51 per cent in the first and second quarters respectively.

“Furthermore, the subsidy removal and exchange rate unification policy towards the end of the first half left the economy on the brink of uncertainty, causing a ripple effect that further eroded investors’ confidence. “As a result, businesses and foreign investors are increasingly wary of committing capital, thereby hindering economic growth and prospects for recovery. The combined effect of these is the resultant higher inflationary pressure, which fuels vast of production, reducing consumers’ purchasing power and having a greater impact on the manufacturers.”

Meshioye added: “Therefore, it is of utmost importance that the challenges identified by manufacturers in our survey are promptly and efficiently addressed. The sector urgently requires measures to mitigate the adverse effects of these policies and restore its growth trajectory.” While speaking on access to credit, the philanthropist said that to ensure effective implementation of the plans to support the manufacturing sector and MSMEs, the government should provide streamlined processes for accessing credit and preferential terms that are suitable for different types of businesses in the country.

On funds to manufacturers, the MAN boss hinted: “Undoubtedly, one of the major hurdles confronting the manufacturing sector in the country is the high cost of obtaining funds. This challenge is substantiated by data gathered during the fieldwork for the first half of 2023 report. “According to this data, the average lending rate to the manufacturing sector from commercial banks remained high at 24 per cent when compared with what was recorded in the corresponding half of 2022.

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