Government incentives are boosting the economy and creating jobs
As a key player in the Organized Private Sector (OPS), the Manufacturers Association of Nigeria (MAN) will want to draw the attention of the Nigerian public to the impact of the Federal Government’s policy on incentives on reviving the moribund manufacturing sector during the tenure of this administration.
The government’s incentive policy, which is designed to encourage industrialization, is working and is today benefiting a large segment of the economy as it is encouraging new investment and job creation.
The incentive policy has been in place through several administrations and the present government is not the first to grant waivers/incentives. Indeed the President and his Economic Management Team deserve credit for streamlining the policy to leverage it for attracting investment in the priority sectors.
An important reform in the incentive policy, as sought by MAN, was to broad base the incentives to a whole sector rather than issuing discretionary waivers for individual firms. This has brought transparency in the policy and created a level playing field for all players.
There is a clear evidence of the positive impact of the sector based incentives. Incentives and concessions given to the Cement industry have contributed to the phenomenal increase in national cement production from less than 2 MN tons in 2002 to over 20 MN tons in 2013. As a result, from being a net importer, Nigeria has become a net exporter of cement. This was achieved in less than a decade thanks to the enabling environment fostered by government policies.
Special intervention funds of the Central Bank of Nigeria (CBN) disbursed through the Bank of Industry (BOI) have also helped revive a good number of ailing industries and SMEs.
Incentives are also helping to boost trade and investment in the non-oil sector and generating employment in agro-allied industries.
Incentives are needed to generate investment in the productive sector – manufacturing and agriculture. Waiver of customs duty and VAT on import of plant and machinery is required to make our industries competitive.Duty and VAT exemption on equipment used in gas production have contributed to reduction in gas flaring and growth in gas-to-power initiative aimed at boosting power supply.
Cost of doing business in Nigeria remains high. Due to infrastructural disadvantages, companies have to generate captive power and build surrounding facilities. Therefore, incentives and waivers are required not only to attract investment but to also compensate for the public infrastructure-deficit.
Most developing companies give incentives to attract investment in priority sectors where they have a comparative advantage and Nigeria cannot be an exception.
We want to affirm our support for the implementation of the recently launched Nigerian Industrial Revolution Plan and well-meaning Nigerian should be prepared to make their own positive contributions to ensuring the success of this programme.