Shettima: FG Seeking Policy Framework, Roadmap to Revamp Manufacturing Sector

•Seeks prioritisation of local content, made in Nigeria goods 

•Dangote faults CBN’s over 26% interest rate 

•LCCI commends apex bank’s removal of price verification system

Deji Elumoye, James Emejo in Abuja and Dike Onwuamaeze in Lagos

Vice President Kashim Shettima, yesterday, said the federal government had joined forces with Manufacturers Association of Nigeria (MAN) to develop an actionable roadmap and policy framework that would refocus the country’s manufacturing sector.

Shettima assured that if developed, the roadmap would be speedily implemented to effect necessary changes for the revitalisation of the manufacturing sector.

He made the disclosures while declaring open a three-day National Manufacturing Policy Summit at the Banquet Hall of State House, Abuja.

But President of Dangote Group, Aliko Dangote, also speaking at the event, criticised the recent increment of interest rate to almost 30 per cent by the Central Bank of Nigeria (CBN).

However, the Lagos Chamber of Commerce and Industry (LCCI) at a different forum, commended CBN for discontinuing the Price Verification System (PVS) portal, effective from July 1.

Director General of LCCI, Dr. Chinyere Almona, said the decision was a commendable step in response to the persistent efforts of LCCI and other stakeholders in the organised private sector keen on ensuring a more conducive business environment in Nigeria.

Shettima regretted that the manufacturing sector, despite its crucial role in building a country driven by production and abundance, had endured a series of setbacks over the past decades.

He told the gathering, “Distinguished ladies and gentlemen, I implore us all to leverage this summit to develop an actionable roadmap and policy framework, ready for immediate implementation, to create the changes we want in the manufacturing sector.

“I assure you that we shall always maintain an open-door policy to accommodate your needs and expectations.”

Shettima called for the prioritisation of local content and promotion of made-in-Nigeria products, stating that the Executive Order 003, which made the patronage of locally manufactured products mandatory, was still in effect.

He said, “Let us be reminded that we cannot achieve significant progress in our drive for industrialisation unless we deliberately promote the production of capital goods. We must be focused on expanding our production base, prioritising local content, and promoting made-in-Nigeria products.

“I want to assure you that Executive Order No 003 – Support for Local Content in Public Procurement by the Federal Government – which mandates the patronage of locally manufactured products is still in effect. The relevant government Ministries, Departments, and Agencies (MDAs) are mandated to fully comply with the order.”

The vice president observed that as a country in Africa, “a continent that has languished at the bottom of the global value chain, with its share of global manufacturing at less than two per cent,” Nigeria had no better option than to support its indigenous firms to produce locally and increase their capabilities.

The summit, according to Shetimma, offered the opportunity to re-evaluate the challenges confronting the sector and proffer solutions that would resolve them. He said a competitive manufacturing sector would reduce the inequities in the country’s economy as well as overdependence on imports.

According to him, “Our proposal to minimise the economic imbalances in the nation is based on strengthening the production base of our economy, particularly in manufacturing.

“Most of our setbacks as a nation, as each of you knows, are due to over-dependence on imports for even our basic necessities. That is why we need you to address the various challenges facing the sector and ensure we have a competitive manufacturing sector.”

Shettima expressed satisfaction with what he saw during a tour of the exhibition. He said he was convinced more than ever of Nigeria’s industrial capabilities, creativity, and innovation.

Stressing the role of manufacturing in driving wealth, job creation, living standards, and revenue generation, he said it explained why President Bola Tinubu was focused on accelerating infrastructure projects, including roads, ports, and energy supply.

“It is essential to expedite the delivery of infrastructure projects that will enable the sector to leap forward and thrive. This is why His Excellency President Bola Tinubu’s focus on roads, ports, and energy supply is strategic,” he added.

Shettima identified five pillars of the summit, which he said were a clear roadmap for stimulating the manufacturing sector, saying it is imperative to enact meaningful change and develop industries by addressing critical issues under each of these pillars.

He listed the pillars to include upscaling productivity and competitiveness, energy security and infrastructure development, improving the macroeconomic environment and ease of doing business, promoting Made-in-Nigeria products and local content development, and leveraging regional and continental trade for export development.

In his keynote speech at the event, Dangote criticised CBN’s recent increase in interest rate to almost 30 per cent. He said businesses in the country could not cope with the over 26 percent interest rate released by the apex bank in May, stressing, “Nobody can create jobs with an interest rate of 30 per cent. No growth will happen.”

He called on the government to protect existing businesses in the country, especially manufacturers, by providing an enabling environment for them to thrive. He stated that import-dependence was equivalent to poverty importation.

“No Power, no prosperity. No affordable financing, no growth, no development,” he explained.

Dangote said for the government to address the challenges of unemployment, poverty and insecurity, the manufacturing sector must be empowered to function optimally.

He highlighted the need for reliable power supply and affordable financing for industrial growth.

The business mogul advocated a circular economy model, where economic activities remained within the country, benefiting all sectors of society.

He also affirmed that industrialisation was “an inescapable road to sustainable and inclusive economic growth and human development”.

Former Minister of Finance, Dr Olusegun Aganga, urged the government to declare manufacturing a national priority sector.

Aganga pointed out that the mere possession of natural resources did not guarantee national wealth.

“What makes a country rich is what it does with its resources,” Aganga said.

He called for a shift from peasant farming to commercial agriculture and from artisanal mining to attracting major miners.

Aganga stated, “We also need to eliminate excessive custom duties, levies, regulars, and multiple regulators with overlapping mandates.”

Earlier, President of MAN, Otunba Francis Meshioye, thanked participants for honouring the invitation after several postponements, and expressed gratitude to Tinubu for the opportunity to host the summit at State House.

Meshioye said since the association opened communication with the office of the vice president, they had been receiving tremendous support and collaboration from the presidency.

The MAN president said the summit was organised to interrogate the evidence behind the constraints demeaning the performance of the industrial sector and to think and agree with the government on what to do to address them.

He stated, “The ultimate goal of the meeting is to reposition the sector on the path of accelerated growth, enhance its competitiveness and reap its multiplier effect on the economy and the wellbeing of the citizenry.”

Highlighting the factors diminishing growth in the sector, Meshioye stated, “The prevailing microeconomic environment places severe strains on the manufacturing sector,” adding, “This is adversely affecting jobs and livelihoods of the citizens.”

LCCI Commends CBN’s Removal of Price Verification System

In a separate development, the Lagos Chamber of Commerce and Industry (LCCI) commended CBN for stopping the Price Verification System (PVS) portal.

Almona said, “The LCCI commends the CBN for this strategic move and reaffirms our commitment to continuing our advocacy efforts to foster a business-friendly environment in Nigeria.

“We look forward to further collaborations with the CBN and the government to ensure that policies are in place to support the growth and development of the private sector, ultimately driving Nigeria’s economic prosperity.”

According to her, discontinuing the PVS would have several positive impacts on the Nigerian economy

She said, “By removing the Price Verification Report requirement, businesses will experience reduced delays and lower operational costs. This will streamline the importation process, allowing timely access to essential inputs and fostering higher production levels in the manufacturing sector.

“The reduction in bureaucratic bottlenecks will make Nigerian businesses more competitive on a global scale. Lower operational costs and improved efficiency will enable businesses to offer more competitive prices, increase market share, and expand their export potential.

“The policy change aligns with the CBN’s mandate of maintaining price stability and promoting sustainable economic growth. By reducing the cost of doing business and enhancing supply chain efficiency, the policy is expected to exert downward pressure on production costs, thereby curbing inflation.

“With importers having more certainty about the pricing of the goods, they can plan better and reduce incidences of losses due to unexpected higher prices from such automated price verification systems.”

CBN had introduced the PVS portal to ensure accurate pricing of goods and services for foreign exchange transactions, and prevent over-invoicing and under-invoicing.

Although it was intended to foster fair pricing in Nigeria’s import and export business, LCCI pointed out that “PVS Portal had inadvertently become an impediment to business operations, particularly for importers.

“The mandatory Price Verification Report for completing Form ‘M’ added bureaucratic hurdles and operational inefficiencies that negatively impacted the business community.”

Almona recalled that LCCI, representing the interests of the organised private sector, had continuously highlighted the challenges to the CBN and the government.

She said, “Our concerted efforts, including engaging in dialogue with key stakeholders and presenting data-driven evidence on the adverse effects of the PVS, have culminated in this favourable outcome.

“The high level of responsiveness of the present government to our advocacy on several issues affecting the private sector is, indeed, commendable.

“The chamber is also delighted with the similar stance on exempting Small and Medium Scale Enterprises (SMEs) from withholding tax, and the suspension of VAT and import duties on medical supplies.

“These non-cash interventions, which the chamber has recently been recommending to the government, have the capacity to gradually and consistently ease the inflationary pressures recorded in the economy in the past two years.

“These policy interventions by the government will enhance the ease of business in Nigeria. The LCCI appreciates the government’s responsiveness and commitment to addressing the concerns of the organised private sector.”