The Manufacturers Association of Nigeria, (MAN), the Nigeria Employers’ Consultative Association, (NECA), and the Nigerian Association of Chambers of Commerce Industry Mines and Agriculture, (NACCIMA), have blamed hastily implemented government policy shifts without corresponding plans to mitigate the negative effects of the inception of the present government for the socio-economic crises confronting the country currently.
The trio spoke separately on the issue yesterday, with NECA saying major policy shifts undertaken by the government in 2023 and the adverse impacts they had across various sectors, are having terrible effects on businesses and the national economy.
President and Chairman of Council, NECA, Taiwo Adeniyi, at the 67th Annual General Meeting, (AGM), of the association in Lagos, lamented that the combination of fuel subsidy removal, and exchange rate liberalisation have significantly created market distortions and increased the cost-of-doing business, leading to a contraction in business activities since mid-2023.
He said: “It is no longer a secret that private businesses in the economy are beset with innumerable challenges, pushing many to the realm of mere subsistence. A good number of these private businesses continue to exist due to sheer determination and doggedness of the owners and investors, who are committed to supporting the economy.
Notwithstanding the ongoing support by the government, Adeniyi listed six key concerns of businesses including the high cost of doing business due to depreciation in the value of the naira, increased Customs forex rate for clearing of cargoes, business-antagonistic regulations, proliferation of provocative taxes/levies and oversight functions of the National Assembly.
Also reacting, the Manufacturers Association of Nigeria, (MAN), identified foreign exchange (FX) volatility, inadequate power supply and high inflation as some of the topmost challenges they encountered in their operations in the first quarter of 2024 (Q1’24). This, according to it, led to a further surge in production and distribution costs by 20.7% within the period.
MAN based its position on the response of chief executive officers in the manufacturing sector on a survey it carried out.
Similarly, the Director-General, Nigerian Association of Chambers of Commerce Industry Mines and Agriculture, (NACCIMA), Sola Obadimu, said: “The cost of doing business continues to rise almost on a daily basis.
‘’That’s neither healthy for business operations nor planning. Due to rising interest rates, MSMEs may not have the financial capacity to borrow. Large businesses may also prefer to downsize rather than borrow at current rates.
“With decreasing production due to high cost of funds, unemployment may worsen with the possibility of an increase in crime rates. Unfortunately, in the midst of all these, there seems to be a deliberate effort to aggressively pursue tax drive policies”.
“Certainly, there is a need for an improvement in public finance management to ameliorate the harsh economic environment”, he counseled.
