By Victor Ahiuma-Young
ANNUAL General Meeting, AGM, is normally for stock-taking and projection info the future. So, for the Association of Food Beverage, and Tobacco Employers, AFBTE, the 2017 AGM, that took place few days ago was not much different from the previous years.
But one singular concern of the employers, is the issue of continuous job losses and factory closures prompted by the socio-economic and even political realities of today’s Nigeria.
Welcoming members and other guests, AFBTE President, Chief Patrick Anegbe, lamented that the business environment in the last one year as in previous year was toxic, declaring that “Even though Nigeria came out of a 15-month recession in the second quarter of 2017, the economy is still weak and fragile. Many sectors, including manufacturing are still weak. The rising price of crude oil was key driver of the exit from recession and it remains the main propeller of the current state of our economy. Inflation rate dropped from 18.72 per cent in January 2017 to 15.90 per cent in November 2017. As at January 2018, it stood at 15.13 per cent and by March, it was 13.34 per cent, the lowest in two years.”
He contended that the business environment had remained uninspiring, explaining that “Part of the challenges is the high cost incurred as a result of non-existing or inadequate infrastructure including energy, arbitrary imposition of multiple taxes and levies by federal, state and local governments and in some cases, communities especially where member-companies are operating in rural areas.
Other problems include high cost and shortage of foreign exchange and disruption in supply of petroleum products. These and many others shoot up the cost of doing business, a situation which calls into question the well touted government’s policy on ‘Ease of doing business’. These developments certainly do not provide any relief to businesses. If anything, they compound the problems the more.
As a result of the above, the industry recorded quite a number of job losses in 2017. The picture is still the same as we speak. One of the reasons for this is the closure of some production lines and plants by companies because of the unbearable costs involved in running their businesses. A few of such cases were reported to the secretary because such closures led to the declaration of redundancies by the more negatively affected companies.”
Increase in excise duty
The group commended the Federal Government for refusing to sign both the Economic Partnership Agreement, EPA, and the Continental Free Trade Agreement, CFTA, but rejected the planned increase of excise duty on some of the products in the sector, saying “This development will no doubt reverse some of the growth recorded by the food, beverages and tobacco sub-sector. In 2017, the sector improved by 8.62 per cent over 2016, recording a growth of 2.35 per cent and outperforming GDP growth.
It called on government to reverse the newly proposed increase on excise duty on tobacco and alcoholic beverages as the impact of such astronomical increase will be devastating.”