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Nigerian Manufacturers Raise Alarm Over Insecurity’s Toll on Operations

Nigerian manufacturers say they’re spending more money addressing security challenges than on taxes to government.

The Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, has raised the alarm that insecurity has forced many of their members to shut down their operations.

 Ajayi-Kadir who revealed this in a recent television interview, added that manufacturers are spending more to address security challenges than on taxes to government.

He also included multiple taxations and high energy cost among the major challenges manufacturers are facing in Nigeria.

 Ajayi-Kadir urged the federal government to provide solutions to the unintended consequences of its reform policies in order to enhance the competitiveness of the country’s manufacturing sector.  

He said: “Insecurity is a major challenge. I can tell you that we lost between 56 to 60 per cent of our members in the North-east to insecurity. They just stopped production.

“I can tell you that what some of us pay for security is more than the taxes that we pay to the government because it (security expense) has to be a continuous basis.

“Insecurity is a very serious challenge that we face. Insecurity is a disincentive to manufacturing just like any other business and so government needs to step up activities.

“There’s no doubt that this current administration is doing a lot. Some of us are aware of what is being done but we need to do more and there’s a sense of urgency in this because we need all that we can muster to be able to get out of this process.”

Ajayi-Kadir stated that the Nigerian business environment is tough, adding that the reforms introduced by President Bola Ahmed Tinubu’s administration have thrown up issues that should be dealt with quickly to be able to get the economy back on track and ensure that these reforms would lead to gains that they were intended.

He said: “That is what is very important. There is no doubt that we needed to float the forex rate and remove subsidy. But how do we deal with the negative fallout? How do we ensure that businesses survive?

“That can only happen if you engage effectively, adequately and truthfully with those who operate in that sector for you to get the necessary feedback.

“You’ll achieve your objective faster with lesser pain and with less adjustment period because everybody needs an adjustment period, both government and the private sector.

“So, I think these are tough times. We need our thinking caps on and for all hands to be on deck, particularly government cooperating with the stakeholders so that we are able to go through the period that is obviously tough, not only for businesses but for individuals in the country,” he explained.

“Governance has to do with the private sector and the public sector cooperating and working together. We operate in an economy where the private sector has a lot of stakes and the federal government or the public sector has a duty to provide for the overall wellbeing of the people. So, there has to be this synergy for us to make progress.

“So, government needs to see that everything is in place including adequate security policies and measures,” he added.

The director general of MAN revealed that the manufacturing sector in Nigeria has continued to underperform, not because of absence of competent entrepreneurs, but because of the binding constraints that the environment has continued to throw.

He identified electricity tariff as one of the issues the government and the private sector should resolve.

“We recognise that cost cannot stay the same. We are not necessarily against increase in tariff. Let us face it; all prices have gone up and those who supply power are business people, so their costs must be going up as well.

“It is not charity; power is not charity but then there are processes and there should be value for money.

“We need to follow these processes; we need to get value for money and there has to be engagement as indicated in the law and in the guidelines and in the regulations.

“You need to follow these processes. If you follow the processes, the DISCOs will be able to do business, the manufacturer will be able to do business, the ordinary Nigerian will be able to have power and live a good life.

“So, it is not possible for the DISCOs alone to be the ones that are happy. I must be able to buy power. I must be able to produce. I must be able to be competitive. I must be able to be profitable and I must be able to operate,” Ajayi-Kadir said.

Dike Onwuamaeze

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