Forex, poor infrastructure, bane of economic growth – AFBTE

… Tasks CBN on high lending rate, FX restrictions
The Association of Food, Beverage and Tobacco Employers (AFBTE) has identified exclusion of 41 items in accessing foreign exchange, most regarded to be essential raw materials to the industrial sector, as well as poor infrastructural development, among many others as bane of Nigerian economy growth.

The outgoing president of the association, Mr Paul Gbedebo, believed the Central Bank of Nigerian (CBN) could strengthen the industrial sector by removing all obstacles restraining the growth and competitiveness of the sector.

Speaking at the 38th annual general meeting (AGM) of the association, last weekend in Lagos, Gbadebo noted that such obstacles include the indiscriminate changes in the Monetary Policy Rate (MPR) which changed as many as four times between 2014 and June 2016 with its distorting effects on the economy.

For instance, he said that the official forex market as well as the failure to synchronize monetary and fiscal policy actions is also a major obstacle to the development of industry.

He, therefore, explained that the impact of recession in the manufacturing sector during the year was aggravated by recurring challenges of multiple taxation, inadequate power supply, high cost of gas, double digit interest rate, unabated smuggling among others

He said that the official forex market as well as the failure to synchronize monetary and fiscal policy actions is also a major obstacle to the development of industry.

Gbededo therefore, mentioned that the impact of recession in the manufacturing sector during the year was aggravated by recurring challenges of multiple taxation, inadequate power supply, high cost of gas, double digit interest rate, unabated smuggling among others.

Noting that, this eventually resulted into loss of jobs, while those companies who didn’t retrench workers, reviewed downward their staff salaries and allowances.

The outgoing AFBTE president noted that if these obstacles are carefully handled that this will enable the sector to be optimally productive to play its expected role of employment generation, capital mobilization, wealth creation and technology acquisition.

According to him, ‘ we expect government to reduce company income tax (CIT) for manufacturer, as a way of attracting further investment aimed at pulling the economy out of recession has been done in other countries with success”

Paul Gbededo, who is also the Group managing director, Flour Mills of Nigeria Plc. however, said that the on- going intervention of the Central Bank of Nigeria (CBN) is commendable and should be sustained. He advised that it would be desirable to have convergence of the various foreign exchange markets to asset investors and manufacturers in their planning a projection.

But mentioned that the association wants the government to adjust Value Added tax, and personal Income tax downward as the country has gone into recession with growth of the productive sector being significantly negative and consumption has whittled down as a result of inflation.