Industries can rebound with naira-for-crude, tax reforms — MAN

The Manufacturers Association of Nigeria (MAN) has indicated that a series of recent government interventions hold the potential to revitalize the country's manufacturing sector, provided they are implemented properly. These measures encompass the Naira-for-Crude initiative, a renewed Nigeria Industrial Policy, withholding tax exemptions, expanded VAT deductibility, phased reductions in Companies Income Tax, and fiscal relief for small and medium-scale industries.

MAN acknowledges that manufacturers have endured significant hardship over the past three years due to economic reforms. These reforms led to escalating production costs, reduced capacity utilization, limited access to credit, and substantial job losses. However, the association's Director-General, Segun Ajayi-Kadir, stated that these reforms have established a foundation for long-term economic restructuring, emphasizing that current implementation efforts must prioritize industrial recovery and growth.

Ajayi-Kadir highlighted that the Nigeria Industrial Policy and the focus on local content procurement through the Nigeria First framework are crucial steps for strengthening domestic industrial capacity. He believes that consistent enforcement across government institutions could significantly enhance market access for local goods, deepen local value addition, and stimulate industrial expansion. The Naira-for-Crude initiative has already eased foreign exchange pressure in the petrochemical and plastics sectors, while fiscal measures have provided relief for local manufacturers in the pharmaceutical industry.

Despite these positive developments, MAN points out that manufacturers are still grappling with severe challenges. The removal of fuel subsidies in May 2023 caused logistics and distribution costs to surge by over 300 percent. Additionally, electricity tariffs for Band A consumers have risen dramatically, forcing manufacturers to continue relying heavily on alternative energy sources due to unstable power supply.

“

The Nigeria Industrial Policy and the renewed emphasis on local content procurement through the Nigeria First framework equally represent important steps toward strengthening domestic industrial capacity. If properly implemented and consistently enforced across all government institutions, these initiatives could significantly improve market access for locally manufactured goods, deepen local value addition and stimulate industrial expansion.