By Yinka Kolawole
Manufacturers, under the aegis of Manufacturers Association of Nigeria (MAN), has appraised the 2022 proposed budget of the Federal Government, harping on the need for synergy between monetary and fiscal policies to guarantee better performance.
Director General, MAN, Segun Ajayi-Kadir, in a statement made available to Vanguard, said the positive points center around the proposed aggregate capital expenditure of N5.35 trillion which is 32.64 percent of the total expenditure as against the N4.37 trillion and 32.2 percent in the 2021 budget. This, according to him, means that “the sum allotted to capital expenditure will increase appreciably in 2022, particularly for the building materials and construction segment that has higher multiplier effects on the manufacturing sector.”
However, the group has spotted more low points in the budget, top on the list, according to Ajayi-Kadir are: the proposed excise duty on carbonated drinks meaning further strangulation of the manufacturing sector that is already burdened with multiplicity of taxes/levies and fees; increased drive for collection of taxes and levies, bordering on multiplicity of taxes and untoward means of collection; and preference for deficit financing to be funded by new borrowing, proceeds from privatizations and drawdowns on loans secured for specific projects.
He also mentioned the “highly ambitious assumption of 13% inflation rate, when the prevailing rate as at August 2021 stood at 17.01% and government is yet to address the incessant crises between the herdsmen and farmers and other insecurity conditions that contributes significantly to food scarcity that evidently fuel inflation in the country”.
The manufacturers said there is the need for the federal government to support the implementation of the proposed budget with a more production centric monetary policy that will crash interest rate to guarantee positive results.
The MAN DG said that the expectations of the manufacturers are: “Full and timeous implementation of the budget, when passed, to stimulate the much-needed growth; Deliberately stimulates production through improved government patronage of made in Nigeria products, being the largest spender in the economy; “Prioritizing the allocation of foreign exchange to the manufacturing sector for the importation of vital raw materials, machine and spares that are not available locally; and Prioritizing the utilization of locally produced construction materials in the current/ongoing upgrade of infrastructure across the country.”
Others are: “Initiating additional tax reforms and tax administration measures that will widen the tax net to compel the non-tax-paying individuals/firms operating to pay tax and thereby increase tax revenue;
“Reducing Government recurrent expenditures to cut fiscal deficit, borrowings and associated service charges; and Redouble efforts at addressing the insecurity situation in the country to improve food production and supply and ensure unfettered business activities. This will facilitate the attainment of the envisaged economic growth.”