The Manufacturers Association of Nigeria (MAN) has said that if Nigeria is seriously desirous of growing industrially, it must peg the interest rate at not more than five per cent for manufacturers.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday retained the benchmark lending rate at 14 per cent, the level it has remained since July 2016.
President of MAN, Dr. Frank Udemba Jacobs, who stated this at a press parley in Lagos on MAN campaign on buy made in Nigeria products, said that manufacturers are not comfortable that the Central Bank of Nigeria retained the interest rate at 14 per cent.
He said: “If we truly want to develop industrially, we must operate an interest rate regime that is not more than five per cent for the manufacturing sector, if we are not doing that our plan to be industrialized will continue to be a mirage and our competitiveness globally will be a tall dream.”
He said while he understands the CBN’s position in the sense that they are following the classical economics theory that says that the interest rate has to be at par with the inflation rate, “I have a different view though radical,” he said. “I ask, will heaven fall if the CBN approves five per cent interest rate for manufacturers? I believe that if we do that, the economy will grow, we will create more employment, there will be more money in the system and the taxes we pay will offset all the economic imbalances that will come with the move initially.”
On the buy made in Nigeria campaign, MAN president said the advocacy campaign was aimed at improving the patronage of locally manufactured products by Nigerians, the Government and its Ministries, Departments and Agencies (MDAs), through an effective and inward looking Public Procurement process. “Undoubtedly, the Government remains the largest single spender in the economy and could drive industrial development and economic growth by increasing its patronage of locally made products,” he said
While expressing happiness that the campaign which started last year is already yielding positive result with the recent Executive Order by the Federal Government directing the MDAs to increase their local content in their procurement processes, Jacobs said: “We thank the Federal Government for supporting the Made-In-Nigeria campaign and for introducing the Executive Order. However, MAN believes that the quest of the Federal Government to promote Made-in-Nigeria goods can be best achieved if the Executive Order on patronage of local products is based on Sector-Specific Margins of Preferences (MOP). The beauty of adopting MOP is the fact that it recognizes the peculiarities within each sector and defines the prosperity or otherwise of operators in these sectors.
“In the first phase of the advocacy campaign, the following five MAN sectors were selected: Textiles, wearing apparel, carpet, leather/leather footwear; Chemical and Pharmaceuticals; Pulp, Paper & Paper products, Printing & Publishing; Basic metal, Iron and steel and fabricated metal products and Wood & Wood Products Industry.
“The selection was based on the outcome of studies commissioned by MAN and the computed sectoral MOPs with special consideration for small and medium enterprises (SMEs), based on the perceived impacts the implementation of sector-specific MOPs will have on the growth of manufacturing output, additional investments, income, employment as well as government tax revenue. This would be replicated in other sectors as the advocacy campaign progresses.”
MAN also recommends that the Federal Government should encourage state and local governments to enshrine patronage of made-in-Nigeria products in their procurement policies and processes; sustain, monitor, enforce and ensure that the 40 per cent participation rate for MSMEs provided in the Executive order is strictly adhered to; create a sustainable platform through which the general public will be continuously educated on the need to jettison the current penchant for foreign goods and patronize locally manufactured products and review the laws against dumping, smuggling, adulteration and counterfeiting activities in the country to impose stricter penalty on culprits.