Excise Duty On Food, Beverages Will Crush Industries – FOBTOB

Joy Obakeye 

The Food, Beverage and Tobacco Senior Staff Association, (FOBTOB), has warned that industries in the sector are currently in a fragile state due to current economic headwinds and would crumble under the imposition of excise duties.

The president of the association, Comrade Jimoh Oyibo who disclosed this at a parley with members of the Labour Writers Association of Nigeria, (LAWAN) in Lagos, called on the government and stakeholders to urgently come to the rescue of the sector, and also put in place policies that will drive the progress of the industry so that companies that are creating jobs will not be vulnerable.

He narrated that the debate on the justification for the introduction of excise duty on the non-alcoholic carbonated drinks has been on the front burner of discussion between the National Assembly, the Custom, and the Finance Ministry.

“The justification is the fact that non-alcoholic drinks manufacturers are making fortunes and that there is a 30 percent excise levy on alcoholic drinks.”

He lamented that this is not enough justification to subject companies that are struggling to survive to another financial burden.

“We are using this medium to call on the Federal Government to engage all stakeholders constructively so as to arrive at a more beneficial conclusion to save the already struggling companies in our sector that are only surviving on a small profit margin.”

Among other challenges, Comrade Oyinbo stressed that it is an established fact that our currency has lost its value in the last one year to an unacceptable level.

He explained that the result of a weaker currency is nothing but a surge in imports.

“There is a strong nexus between the exchange rate pressure and the manufacturing sector as they rely heavily on dollar-driven importation. We are not only contending with weaker currency but an unfortunate situation of non-accessibility of FOREX and a spike in capital outflow for most companies. Our industry is full of players with genuine intention and would do well if the FOREX is made available to them to increase the importation of raw materials.”

Speaking on supply chain difficulty, he explained that during the lockdown, the laxity in the supply chain, which is critical to economic recovery in Nigeria, became evident, and from that time, several attempts made to put this in the right direction have not yielded desired result.

He noted that failure to address this may lead to crash of the economy.

“Unfortunately, the body language of government agencies saddled with the responsibility to contain this challenge has been extremely poor. Movement of finished products and raw materials is daily distressed and disrupted.”