NEWSPAPER REVIEW MARCH 28, 2019
Manufacturers’ rage over proposed VAT hike (New Telegraph pg. 23)
Nigerian manufacturers, under the aegis of Manufacturers Association of Nigeria (MAN), have warned the Federal Government that the proposed increase in Value Added Tax to 50 per cent will kill the country’s manufacturing sector and economy in general. Taiwo Hassan reports
As at today, it is generally believed that the Nigerian economy is still basking in uncertainty amid the just concluded general elections in the country.
In such uncertainty, it is also shocking that the Federal Ministry of Finance recently pronounced a likely increase in the country’s VAT rate by 50 per cent.
Precisely, it was reported that this recommendation was ventilated on the floor of the Senate by key officials of government while defending the Medium-Term Expenditure Framework (MTEF).
The proposed increase has, however, been denied in a signed statement by the Director, Communication and Servicom in the Federal Ministry of Finance, Wahab Gbadamosi, as well as the Federal Inland Revenue Service.
However, since the reported news on the increase and the likely effect on the country’s fragile manufacturing sector, MAN said the sector could not withstand such policy in all ramifications.
The Director-General, MAN, Segun Ajayi-Kadir, while reacting to the possible increase in the country’s VAT, in Lagos recently, said MAN would resist such move, which, according to him, is not manufacturing-friendly and also not in tandem with the Economic and Growth Recovery Plan (EGRP).
Ajayi-Kadir explained that the proposed VAT increase appeared not to have taken into cognisance the prevailing times and the on-going government efforts to reinvigorate the economy.
Source: New Telegraph
Evaluating CBN’s lifeline for oil palm, textile sectors (New Telegraph pg. 26)
In a space of three weeks, the Central Bank of Nigeria (CBN) rolled out two interventions in agriculture value chain, ostensibly to breathe life into them. Abdulwahab Isa reports
For exigency purposes, which Nigeria economy requires at this time, the Central Bank of Nigeria (CBN) has taken it upon itself to intervene in some areas that are exclusive of the fiscal authority.
The bank is assuming these roles with a view to delivering sustainable economic development, given that for an economy smarting from recession, the system must be liquid to get it on a strong footing.
Motivated by passion to get economy working again, CBN Governor, Mr. Godwin Emefiele, within a space of three weeks rolled out two interventions in the agriculture value chain.
Firstly, the bank proposed a rescue package for comatose textile and cotton industry. Again, at another intervention is a life line mechanism for the revival of palm oil production in the South-South palm oil production belt.
Source: New Telegraph
LCCI: AfCFTA is game-changer (The Nation pg. 11)
Signing the African Continental Free Trade Area (AfCFTA) agreement will be an economic game-changer for Nigeria, the Lagos Chamber of Commerce and Industry (LCCI) President Mr Babatunde Ruwase has said.
The AfCFTA, signed in Kigali, Rwanda on March 21, last year, is a trade agreement between 49 African Union (AU) member states (excluding Nigeria), with the goal of creating a single market followed by free movement and a single-currency union.
While some have expressed concerns over sustainability of investments should Nigeria sign it, Ruwase was of the view that the country stands to benefit from continental economic integration.
He spoke during the 2019 Founders Day Lecture of the Nigerian Institute of Advanced Legal Studies (NIALS), with the theme: Inclusivity and the transformational potentials of the AfCFTA for African countries.
Ruwase, who chaired the event, said: “The reality is that there is a great deal of value in economic integration, but as a country, we need to position ourselves well to take advantage of the opportunities it offers.
“The AfCFTA is an age-long dream of the continent with regards to the promotion of trade and investment among African countries.
“As a country, our decision on the AfCFTA could be a game-changer for Nigerian economy if we do the right thing at the right time.”
The guest lecturer, Adjunct Professor at the Centre of Comparative Law in Africa, University of Cape Town, South Africa, Prof Faizel Ismail, said AfCFTA has the prospect of catalysing the process of transformative industrial development, cross-border investment, democracy and governance in Africa.
Source: The Nation
Nigeria’s Manufacturing Index Expands Further (This day pg. 38)
The Manufacturing Purchasing Managers’ Index (PMI) sustained its upswing in March as it increased to 57.4 index points.
This current position of the PMI represented an expansion in the manufacturing sector for the 24th consecutive month.
The Central Bank of Nigeria (CBN) disclosed this in its PMI report for March that was posted on its website.
According to the report, the index grew at a faster rate when compared to the index in the previous month.
In all, 11 of the 14 sub-sectors surveyed reported growth in the review month in the following order: cement; food, beverage & tobacco products; fabricated metal products; furniture & related products; paper products; chemical & pharmaceutical products; plastics & rubber products; electrical equipment; printing & related support activities; transportation equipment and non-metallic mineral products.
But the textile, apparel, leather & footwear; petroleum & coal products and primary metal subsectors recorded decline in the review period.
On the other hand, at 58.3 points, the production level index for the manufacturing sector grew for the 25th consecutive month in March 2019.
The index indicated a faster growth in the current month, when compared to its level in the month of February 2019. Nine of the 14 manufacturing sub-sectors recorded increased production level, while five recorded decline.
Source: This day
Automotive council laments $8b yearly import of used vehicles (Guardian pg. 21)
The National Automotive Design and Development Council (NADDC) has vowed to put a stop to yearly importation of more than 400,000 used vehicles, estimated at $8 billion, as such practice negates efficiency, safety and provide economic backwardness for the nation.
It has therefore, signed a Memorandum of Understanding (MoU) with the Volkswagen conglomerate to begin the manufacturing of vehicles and cars in Nigeria
NADDC was established by Act 83 of 2014, as a parastatal of the Federal Ministry of Industry, Trade and Investment, with the sole aim of creating an enabling environment for the manufacturing of Nigeria made Vehicles of International Standards at competitive prices, using local human and material resources.
In an interactive session with journalists in Abuja, NADDC Managing Director, Jelani Aliyu, affirmed the council’s MoU with Volkswagen conglomerate for the manufacturing of vehicles in Nigeria.
He said the council has also put in place several programmes to discourage the importation of vehicles into the country.
‘’If you watch closely, you will find that the National Automotive Industrial Development Plan (NAIDP) is working closely with NADDC and has started to bring back all vehicle manufacturing companies into the country.
Small manufacturers capitalize on Value for Money opportunities to increase market share (Business day pg. 29)
Small manufacturers in the Fast-Moving Consumer Goods (FMCG) subsector are taking advantage of the high level of fragmentation as they capitalize on Value for Money Opportunities (VFM) to increase their share of the Nigerian market.
According to a recent Data by Diageo, one of the largest brewers in the world, the top 5 players in the manufacturing industry that control 22.30 percent of the market saw market share fall by 3.50 percent.
On the other hand, firms that rank between 6 and 10 that control 5.50 percent of the market saw share increase by 8.10 percent while those firms that fall within the range of 31-100 saw market share increase by 6.30 percent.
Source: Business day
FG Seeks Increased Private Sector Partnership (This day pg. 31)
The Minister for Finance, Mrs. Zainab Ahmed has expressed the desire of the federal government to increase its partnership with the private sector.
This, according to her, would translate to an increased flow of private capital into the economy and stimulate economic growth.
Ahmed, who disclosed this in Lagos on Tuesday, at the 125 years anniversary lecture of First Bank of Nigeria Plc, with theme: ‘Institutional Impact on Economic Growth and Improved Living Standard.’
She stated that the administration of President Muhammadu Buhari would ensure that it provide enough policy incentive that would attract capital both locally and international.
“The global interdependencies as catalyst for Africa’s Ascendancy are both an opportunity and a threat for us in Africa. There are a lot of risks; some of them are within our control. While others are not.
“We must as government ensure that we are able to build fiscal purpose, and also that we are providing enough policy incentive that will attract capital both locally and international,” she noted.
The minister explained that in the area of policy, the administration was making frantic efforts in addressing infrastructural deficit, which she described as too large for the present government or any government to tackle alone.
She assured Nigerians of the desire of the federal government to intensify efforts in terms of enabling the business environment and improving security, both physical security and security of capital.
Source: This day
No incentive to increase power generation, say Gencos (Punch pg. 28)
As households and businesses continue to lament the nation’s electricity woes, power generation companies in the country have said there is no incentive for them to increase output from their plants.
The Gencos said their total generation capacity rose to 7,383.04 megawatts in 2018 from 4,214.32MW in 2013, when the power sector was privatised by the Federal Government.
Total power generation, which plunged to 2,938.5MW last Wednesday, rose to 4,305.5MW as of 6am on Monday, according to data from the Nigeria Electricity System Operator, an arm of the Transmission Company of Nigeria.
The system operator put the installed generation capacity at 12,910.40MW; available capacity at 7,652.60MW; transmission wheeling capacity at 8,100MW; and the peak generation ever attained at 5,375MW.
The Executive Secretary, Association of Power Generation Companies, the umbrella body for the Gencos, Dr Joy Ogaji, in a telephone interview with our correspondent, said the limitations of the transmission and distribution networks as well as a lack of payments to Gencos were a drag on increased generation.
“Consistently, from January to December 2018, we had available generation capacity of 7,000MW and above, but the system was taking a maximum of 4,000MW. So, does that incentivise any investor to increase again? There is no incentive to increase generation or to expand capacity, because as we are increasing, they are not taking it,” she said.
Ogaji said the association did an analysis of how much generation capacity was available, how much was taken and how much was stranded from 2013 to 2018.
She said, “From 2013, the power taken did not change at all. It was just hovering around 3,000MW until it rose to 4,000MW in some days, out of over 7,000MW of available generation capacity. And who pays for the difference? No one. That is why the system can just continue to reject load because nobody is paying for it; if you are paying for it, you will be compelled to take more.