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MAN Advocates Real Sector Financing

By on April 26, 2011

The Manufacturers Association of Nigeria (MAN) has called on the apex bank to make funds available for manufacturing outfits that have performing loans with banks in the country.

The Chairman, MAN Apapa Branch, Mr. John Aluya, explained that there is a need to make funds available for other manufacturers that are not captured in the first trench of bail out.

The Chairman, who spoke through a communiqué at the end of the bi-monthly meeting of the branch council, however lauded the CBN for its programme on intervention of funding for the manufacturing sector, but opined that the funding was targeted at erasing bad loans from the book of banks.

He noted the positive development in the banking sector and commended the apex bank for its oversight function and for having banks with regional, national and international exposures.

He said these exposures should create adequate room for businesses with local drive to have access to funding according to their needs while businesses of international dimension should have relative advantage with such banks of international ranking.

On power, he said the rate of exposure of businesses to power their operations through self-generated means has continued to exert negative effects on the cost of production of member-companies.

“At the current stage, capacity utilisation occasioned by the failure of power hovers around 40 per cent in the past 6 months,” he said.

He pointed out that the non attainment of the promised 6,000MW continued to drain the lean resources of member-companies whose cost of production through self generated power has been eroding the much expected growth of the sector and gain from the CBN refinancing scheme for manufacturers.

He said diesel prices over the past few months have continually been on the increase,  saying that it is clearly distorting production plan of member-companies and eroding profits.

“The Association is not pleased with the failure of government to fulfil its promise of reducing the Automotive Gas Oil (AGO) (the main source of energy generation in the manufacturing sector).

He also reviewed the economy, which remained lull generally due to the electioneering campaign of government at the expense of the economy, and however hoped that events preceding the election will be a turning point in the annals of the nation’s history.

According to Aluya, a recent survey by MAN and a US based organisation revealed that the number of taxes and levies that companies are made to bear in the cause of doing their business are too burdensome, excruciating and strangulating for businesses to contend with at this pressing time.

“In most cases, the organised private sector becomes the target for myriad of taxes and levies that are inimical to its survival, more worrisome is the activities of the local government revenue agents who in spite of State government approval of collectable taxes and levies, have continued to flaunt this directive and gone ahead to continue intimidating our members for payment of illegal levies and taxes,” he added.

He said another worrisome dimension is the overlapping role of NESREA and LASEPA where members are compelled to do similar reports and analysis which obviously amounts to double payment.

Source : Thisday