…Calls for diligent monitoring of loans’ delivery
By Merit Ibe
The Manufacturers Association of Nigeria (MAN) has commended President Bola Ahmed Tinubu on the promise to spend N75billion to boost the manufacturing sector and N125billion to energise the small and medium scale enterprises(MSMEs).
The Director General of the association, Segun Ajayi-Kadir, who made the remark following the president’s speech yesterday, noted that it was a good start to begin to address the dearth of loanable funds in the face of rising lending rate occasioned by the continued increase in the MPR by the CBN.
“Quite interestingly, the President promised that N75billion will be spent within the next eight months to fund productivity, enhance sustainable growth and accelerate transformation in the manufacturing sector. The promise that 75 manufacturing enterprises will access N1billion credit at 9% interest rate per annum and working capital is commendable.”
Lamenting that access to credit was a major challenge for SMEs, he posited that the allocation of N125billion to energise the segment will give fillip to their businesses and help overcome the paucity of funds occasioned by low capacity utilisation and unprecedented low sales in recent times.
The MAN boss, however, noted that it was very important and critical that the vehicles for the delivery of these loans should be carefully selected and the implementation diligently monitored, pointing out that the Bank of Industry (BOI) has shown excellent performance as an appropriate transaction structure for such facilities.
He emphasised that was equally important to ensure that the promised 3000 units of 20-seater buses be procured from indigenous automobile industries.
“This is a golden opportunity for the federal government to demonstrate unfailing commitment to the implementation of the subsisting Executive Order 003, which prioritizes the patronage of made in Nigeria products.
“Additionally, we expect that other attendant challenges, including the calculation of the import duty for production inputs at the floated rate and the continued denomination of the gas price in dollars should be discontinued. “This will help to bring down rising costs of production and ameliorate the lackluster performance of the manufacturing sector. It will help avert an unprecedented upward swing in the price of domestic products and an escalation of the pervading low consumer apathy.”
He said: “The speech of Mr. President has demonstrated an appreciation of the downside of the recent economic policy measures taken by the new administration.
“Good he has stated the obvious, the fuel subsidy was unsustainable and the prevailing multiple exchange rate was inimical to the growth of the economy.
So, as it should be with policy reforms, the attendant hardship should be assuaged with pragmatic, quick and effective remedies, in order to sustain the understanding and support of the populace.
“So the assurances contained in the speech of the President represents part of the the follow-up measures we asked for.
“We had indicated that the best palliative is to remove the binding constraints that have bedeviled the productive sector so that jobs can be created and guaranteed, salaries can be paid and production capacity boosted, with the attendant lower prices and improved availability.
“This is far more beneficial than palliatives that would only give nominal relief.
“So it is a welcome development to note that the Federal Government is working in a coordinated manner with the local and state governments to deliver the interventions that will cushion the effect of the hardship across the socio-economic brackets.
“This will ensure that the benefits are wide spread and far reaching.
“To set the context and in specific terms, the four executive orders signed by the President recently has set the stage for the much sought-after relief for the manufacturing sector in particular. It became possible for us to return to our business projections and to look toward a possible profitable production in the affected sectors.”