Chief Executive Officers (CEOs) in the manufacturing sector have identified over-regulation by the government and multiple taxation as the major depressants of productivity in the sector in the second quarter of the year (Q2’24), a survey by the Manufacturers Association of Nigeria (MAN) has revealed.
The Q2’24 Manufacturers CEO Confidence Index (MCCI) survey conducted by MAN also noted that gridlocks at the ports negatively affect productivity in the sector, while lamenting the delay in the implementation of the Oronsaye Report and the National Single Window (NSW) to tackle the problems.
MCCI is an index constructed by MAN to measure changes in quarterly pulse of manufacturing activities in relation to movement in the macro economy and government policies, based on a survey of Chief Executive Officers (CEOs) of MAN member-companies across the six geo-political zones and Sectoral Groups of the association through its branch networks.
The report stated: “90 percent of the respondents confirmed that over-regulation by the government depresses manufacturing productivity, 90.3 percent attested that multiple taxation depresses productivity in the sector and 67.4 percent affirmed that port gridlocks negatively affect productivity in the sector.
“The country’s tax system is marred by over 190 multiple taxes while the Oronsaye Report and the National Single Window are yet to be implemented to respectively address over-regulation and port gridlocks.”
The Oronsaye report seeks to rationalise and reduce the numbers of departments and agencies of government, while the NSW project is a cross-government initiative offering a single digital platform that links ports, government agencies, and stakeholders, thus enabling a seamless and efficient trade ecosystem in the country.
On the other hand, the report noted that 55.6 percent of CEOs surveyed confirmed that local sourcing of raw materials has improved in the sector and only 45.9 percent agreed that the implementation of the Executive Order 003 has been beneficial to the sector.
“While the scarcity of foreign exchange (forex) continues to prompt the local sourcing of raw materials, investment in local sourcing is being frustrated by exorbitant cost of borrowing and high rate of insecurity in farming areas. Hence, only a minimal improvement of 3.8 percentage points was recorded for local sourcing of raw materials during the period of review.
“Compared to 56.4 percent in the preceding quarter, only 43.7percent of the CEOs surveyed agreed that the inventory of unsold manufactured goods had reduced in the last three months,” the report added.
