By Naomi Uzor
Manufacturers Association of Nigeria (MAN), yesterday, said for the gains of AfCFTA to be realized, government must show readiness in addressing the constraints of infrastructure in Nigeria and ensure that policies and regulations are not too harsh for businesses to operate.
Speaking at the 2020 MAN Annual Media Luncheon, President of MAN, Engr. Mansur Ahmed, said regulations should be seen as a way of assisting businesses to grow which ultimately enhance competitiveness and boost the economies.
Ahmed said: “As MAN remains at the forefront for setting the pace for engagement with other African manufacturers, the Nigerian government must also lead by example in ensuring that policies are industry friendly as this is the only guarantee for a competitive intra-African trade.
“We cannot achieve competitiveness without the provision of infrastructure such as good road networks and electricity, not only within African countries but also across the borders. There is also the aspect of provision of soft infrastructure – like visa, tariffs, and foreign exchange – that will help ease up the process of carrying out business transactions between countries. We must address all these issues since AfCFTA is not just about trade in goods but also trade in service.”
“Modern industry competitiveness depends to a great extent on provision of adequate and efficient infrastructure. From the availability of power and energy to transport and logistics, the role of infrastructure cannot be overemphasized in trade and economic development on the continent. Transportation alone is vital to enhancing competitiveness in trade. For instance, due to poor infrastructure, it will cost a business owner in Nigeria more to transport goods from Lagos to Kano than it will cost a Chinese business owner to transport the same goods from China to Lagos.”
Ahmed noted that electricity is a vital input for the manufacturing process to the extent that it constitutes up to 40 per cent of the cost of production, adding that increasing the tariff of this core input will have drastic negative effect on the Gross National Product (GNP); Gross Domestic Product (GDP), disposable income, consumption, consumer price index, employment, government revenue from corporate taxation etc.
Similar to this, he added, is the uneven pricing of this commodity across DisCos, which if not corrected, will lead to uneven development in certain parts of Nigeria as the percentage increase in tariff differs.
“A reduction in electricity tariff for industrial purpose is more ideal but even if it cannot be reduced, it should be not be increased; any increase on the tariff will reinforce the already high cost manufacturing environment and further depress productivity in the sector,” he stated.