The Manufacturers Association of Nigeria (MAN) has urged the federal government to review the interest rate and waive import duties on active pharmaceutical ingredients (APIs) and food-related raw materials to support the manufacturing sector reeling from coronavirus-related challenges.
Speaking during the association’s 48th Annual General Meeting held in Lagos last week, Mansur Ahmed, MAN president, said that the COVID-19 pandemic created unprecedented challenges in the global and local economies, leading to an economic shutdown and a halt in manufacturing activities, including low productivity, job losses, decline in consumer demand, and a general deterioration in living standards.
“Support manufacturing concerns by reviewing the terms of existing loan facilities, especially reducing interest rates to five percent with two years moratorium. Manufacturers that are investing in order to scale production should be granted loans at five percent interest rate for a period of five to seven years,” he said.
Ahmed said regulatory agencies must aid the revival the manufacturing sector through necessary reviews and palliatives, following the impact of the coronavirus on the business environment.
Mansur further said that manufacturers were yet to recover from the impact of the pandemic and weeks of the lockdown, stressing that many sub sectors collapsed to the point of almost shutting down. He implored the government and regulatory agencies to support the sector through the provision of stimulus packages, reversal of the Value Added Tax rate to five percent, review of existing loan facilities, waiver of import duties and demurrages, among other things.
He urged the CBN to extend its COVID-19 stimulus packages to manufacturers not covered by existing CBN initiatives and also grant manufacturers increased access to the foreign exchange at pre-COVID-19 rate to support the importation of raw materials, machines, and spares that are not available locally.
Mansur equally called for the introduction of fiscal measures by waiving import duties on inputs, while exempting manufacturers from demurrages payable between February and July 2020, especially those occasioned by the lockdown directives of government and others associated with the COVID-19 management.
He urged the federal government to direct all regulatory agencies to prioritise the request of manufacturers and also carry out their roles with empathy and while reducing their respective administrative charges by 50 percent.
Similarly, he said that the timelines for filing and paying taxes should be extended by six months after the economy returns to normalcy, adding that the excise duty should be based on sales and not production.
Mansur noted that in order to improve the disposable income of consumers, stimulate consumption, promote an upsurge in demand and increase production output, it was necessary to reverse the VAT back five percent and also reduce the Personal Income Tax to a flat rate of 10 percent for a year.
Mansur also commended members of the association who donated no less than N8 billion in cash and N300 million naira worth of palliative materials to both federal and state governments despite the decline in business activities.