MAN identifies improved infrastructure as key to realising benefits of AfCFTA
……As AfCFTA will commence on 1 July 2020
By Charles Nwaoguji
The Manufacturers Association of Nigeria (MAN) has advised the federal government to get its policies right by making them industry- friendly, as the operational phase of the AfCFTA will commence on 1 July 2020.
MAN explained that a clement environment can only attract needed investment as this is the only guarantee for a competitive intra-African trade.
Its President, Mr Mansur Ahmed, while speaking at the 2020 edition of the MAN reporter of the year award on Thursday in Lagos urged the government to show readiness in addressing the supply side constraints of lack of infrastructure, to enjoy the gains of the Africa Continental Free Trade Area (AfCFTA).
Mansur, said policies and regulations should be lenient for businesses and seen as a way of assisting them to grow, to enhance competitiveness and boost the economy.
He said that competitiveness, without the provision of infrastructure such as good road networks and electricity, not only within African countries but also across the borders cannot be achieved.
“As the association remains at the forefront for setting the pace for engagement with other African manufacturers, the Nigerian government must also lead by example in ensuring that policies are industry-friendly, as this is the only guarantee for a competitive intra-African trade.
“Modern industry competitiveness depends to a great extent on provision of adequate and efficient infrastructure.
“There is also the aspect of provision of soft infrastructure – like visa, tariffs, and foreign exchange – that will help ease up the process of carrying out business transactions between countries,’’ he said.
According to him, transportation is vital to enhancing competitiveness in trade.
“For instance, due to poor infrastructure, it will cost a business owner in Nigeria more to transport goods from Lagos to Kano than it will cost a Chinese business owner to transport the same goods from China to Lagos.
“We must address all these issues since the AfCFTA is not just about trade in goods, but also trade in services,” he said.
The MAN President said that electricity was a vital input for any manufacturing process, as it constitutes up to 40 per cent of the cost of production.
He explained that increasing the tariff of this core input would have drastic negative effect on the Gross National Product (GNP), Gross Domestic Product (GDP), disposable income, consumption, employment, among other economic factors.
According to him, the uneven pricing of this commodity across distribution companies (DisCos), if not corrected, will lead to uneven development in certain parts of the country as the percentage increase in tariff differs.
“A reduction in electricity tariff for industrial purpose is more ideal, but even if it cannot be reduced, it should be not be increased.
“Any increase on the tariff will reinforce the already high- cost manufacturing environment and further depress productivity in the sector.
“Our appeal is that government, being a major stakeholder in the electricity industry, should concentrate on developing processes and polices to attract significant investment.
“This will encourage large scale generation and significant improvement in transmission and distribution.
“It is also important for government to ensure adequate and appropriate consultations with stakeholders in the private sector on such decisions with far-reaching implications,” he said.
The MAN President also disclosed that he had been confirmed substantive Chairman of the Pan African Manufacturers Association (PAMA).
The PAMA is the umbrella body of manufacturers in Africa.
It is aimed at bringing African manufacturers together to jointly engage governments of the African continent to create a conducive and enabling environment for local businesses to thrive.