Manufacturers Association of Nigeria, MAN, yesterday, released its 2019 Economic Outlook report detailing recommendations to achieve sustainable economic growth and budgetary objectives of the fiscal proposals for next year.
In the report released in Lagos, MAN urged the Federal Government to revisit the assumptions of the 2019 budget, particularly crude oil production and price as well as ensure upward review of education and health allocations before appropriation.
“The crude oil price has a $60 per barrel benchmark, while oil production has a 2.3 million barrel per day projection. These assumptions should be revisited to reflect present economic realities,” it said.
MAN called for caution in the country’s rising debt profile in view of the associated services charges and future economic burden that it would exert on the nation.
The association called for cutting down on government recurrent expenditures to reduce fiscal deficit, borrowing and service charges.
It also canvassed shedding the current borrowing size of the government in the domestic financial market so as not to completely crowd-out the private sector.
The association called for the commencement of the implementation of the harmonised taxes and levies and to allow the Joint Tax Board, JTB, monitor and enforce compliance by states and local governments.
It said government should be more interested in result-oriented spending with frugality, be more transparent and accountable in order to assuage the psychology of taxpayers for improved tax compliance.
MAN also called for the resuscitation of domestic refining of crude oil and ensures the operability of Independent Power Producers, IPP, for On/Off-grid power generation and the Micro Grid Initiative.
It also urged the government to “Re-classify the manufacturing sector into strategic gas users from the current commercial gas user’s classification.”
The association urged the Federal Government to continue to entrench better foreign exchange rate management while allocation should tilt more to the industrial sector, including the SMEs.
It also urged the government to fast-track the development of key selected mineral resources through backward integration, especially those with high inter-industry linkages.
“Government should continue to support the resource-based industrialisation and backward integration in the country through appropriate incentives and funding support to investors,” it said.
MAN urged the government to expand the tax net to capture the non-tax-paying firms, particularly those operating in the informal sector and not increase the tax burden on the already tax compliant businesses.
It acknowledged the government’s recognition of the need to develop a digital economy and the fourth industrial revolution in order to enhance productivity.
The association, however, said the safety nets were not captured in the budget proposal nor in President Muhammadu Buhari’s budget speech.
“Nigeria’s production base faces future risks due to its weak performance in developing productivity drivers such as innovation and human capital, and this calls for closer examination and immediate action,” it said.
The association acknowledged government’s efforts at carrying the private sector along on the issue of African Continental Free Trade Agreement, AfCFTA.
It, however, added that the government must pay adequate and unwavering attention to the emerging issues on AfCFTA in 2019 and beyond.
“Government should ensure that Nigeria’s economic interests, especially the private sector, are not only projected but protected in arriving at the decision to sign or not to sign or when to sign.
“As a necessary part of the readiness assessment and the resulting action plan, the government should put in place the necessary framework to protect and boost the capacity of the manufacturing sector to thrive in the continental free trade area,” it said.