The Manufacturers Association of Nigeria has called for the adoption of concessionary Forex allocation mechanism to enhance productivity in the nation’s manufacturing sector and be more competitive.
Dr. Frank Jacobs, the President of the association, made the call in an interview with the News Agency of Nigeria on Tuesday in Abuja.
He said that the Federal Government should encourage export of manufactured and other non-oil products to boost foreign exchange earnings and activate automatic stabilisers, especially for the manufacturing sector.
Jacobs said there was need to intensify efforts towards increasing non-oil revenue to enable the country’s economy get out of the recession.
The president said that the industrial sector, especially the manufacturing sub-sector, should be strengthened by removing all obstacles restraining its growth and competitiveness.
Indiscriminate changes in the Monetary Policy Rate in particular; he said was a restraining obstacle that should be removed.
Jacobs also called for the reduction of other rates, especially refinancing and bank lending rates.
According to him, the inflationary situation in the economy may not be purely a monetary phenomenon but can also be a result of output gap created in the real sector.
He said that government should create special funding windows for the manufacturing sector to enhance its productivity.
The president added that the exclusion of 41 items, mainly of essential raw materials, from the official Forex market had also affected the sector.
Jacobs said: “If the items have not been excluded, they would have enabled the sector to be optimally productive and generate employment.
“The sector would have also mobilised capital, create wealth and enhance technology acquisition.”
According to him, there is need for the intensification of the resource-based industrialisation programme.
He said: “This will save the country a lot of foreign exchange currently being used in importing raw materials.
“It will also free funds for government development projects.”
Jacobs explained that intensification and aggressive development of key mineral resources like iron ore, zinc-lead, bitumen, limestone and coal through backward integration would increase non-oil revenue.
The president called on government to intensify backward integration in the agricultural sector to catalyse more industrial input supply, adding that these would free more funds for the government.
Jacobs said solution to the current recession required strong government resolve and commitment to re-energise the economy for increased revenue.
Jacob also stated: “Any programme contemplated by the government can succeed only if there is adequate revenue to execute it.
“We should, therefore, take a cue from strategies adopted by other countries to come out of the recession.
“The major problem, which Nigeria has experienced and which has impacted negatively on the economy, is the over-dependence on crude oil revenue and weak industrial base of the economy.
“The drive by the current administration to diversify the economy is, therefore, a step in the right direction.
“This will insulate the economy from the present experience and future external shocks.”