…Demands Prioritisation Of Local Content, Made-In-Nigeria Goods

…Approves Withholding Tax Exemption For Small Businesses

…Dangote Says Nobody Can Create Jobs With Interest Rate At 30%

ABUJA  – The Federal Government has asked the Manufacturers As­sociation of Nigeria (MAN) to come up with an actionable road map and policy frame­work that would refurbish the nation’s manufacturing sector.

This is just as Vice Presi­dent Kashim Shettima has assured that if presented, the road map and policy frame­work would be speedily im­plemented to effect the needed changes that will revamp the sector.

Shettima, who disclosed this on Tuesday while declar­ing open a three-day National Manufacturing Policy Sum­mit at the Banquet Hall of the Presidential Villa, Abuja, re­gretted that the sector, which has a crucial role to play in building a nation driven by production and abundance, had endured a series of set­backs over the past decades.

“Distinguished ladies and gentlemen, I implore us all to leverage this summit to devel­op an actionable road map and policy framework, ready for immediate implementation, to create the changes we want in the manufacturing sector. I assure you that we shall al­ways maintain an open-door policy to accommodate your needs and expectations,” Sen­ator Shettima stated.

The vice president also called for the prioritisation of local content and promotion of made-in-Nigeria products, noting that Executive Order 003 which makes the patron­age of locally manufactured products mandatory is still in effect.

“Let us be reminded that we cannot achieve signifi­cant progress in our drive for industrialisation unless we deliberately promote the pro­duction of capital goods. We must be focused on expanding our production base, prioritis­ing local content, and promot­ing made-in-Nigeria products.

“I want to assure you that Executive Order No 003 – Support for Local Content in Public Procurement by the Federal Government, which mandates the patronage of locally manufactured prod­ucts is still in effect. The rele­vant government Ministries, Departments, and Agencies (MDAs) are mandated to ful­ly comply with the order,” he said.

Shettima observed that as a country in Africa, “a conti­nent that has languished at the bottom of the global value chain, with its share of glob­al manufacturing at less than two percent,” Nigeria has no better option than to support its indigenous firms to pro­duce locally and increase their capabilities.

The summit, according to him, offers the opportunity to re-evaluate the challenges confronting the sector and proffer solutions that would resolve them, even as he noted that a competitive manufac­turing sector would reduce the inequities in the nation’s economy as well as over de­pendence on imports.

“Our proposal to mini­mise the economic imbalanc­es in the nation is based on strengthening the production base of our economy, particu­larly in manufacturing.

“Most of our setbacks as a nation, as each of you knows, are due to over-dependence on imports for even our ba­sic necessities. That is why we need you to address the various challenges facing the sector and ensure we have a competitive manufacturing sector.”

VP Shettima expressed satisfaction with what he saw during a tour of the exhibi­tion, saying he is convinced more than ever of Nigeria’s industrial capabilities, cre­ativity, and innovation.

Stressing the role of man­ufacturing in driving the nation’s wealth, job creation, living standards, and revenue generation, the vice president said it explains why President Bola Ahmed Tinubu is focused on accelerating infrastructure projects, including roads, ports and energy supply.

“It is essential to expedite the delivery of infrastruc­ture projects that will enable the sector to leap forward and thrive. This is why His Excel­lency President Bola Ahmed Tinubu’s focus on roads, ports, and energy supply is strategic,” he added.

The VP identified five pil­lars of the summit, which he said are a clear road map for stimulating the manufactur­ing sector, pointing out that it is imperative to enact mean­ingful change and develop industries by addressing critical issues under each of these pillars.

He listed them to include upscaling productivity and competitiveness, energy se­curity and infrastructure development, improving the macroeconomic environment and ease of doing business, promoting Made-in-Nigeria products and local content development, and leverag­ing regional and continental trade for export development.

Earlier, President of MAN, Otunba Francis Meshioye, thanked participants for honouring the invitation af­ter several postponements, just as he also expressed grat­itude to President Tinubu for the unique opportunity and his magnanimity to host the summit in the State House.

He said since the associa­tion opened communication with the Office of the Vice President, they have been re­ceiving tremendous support and collaboration from the presidency.

He said the summit was or­ganised to interrogate the evi­dence behind the constraints demeaning the performances of the industrial sector and to think and agree with the government on what to do to address them.

“The ultimate goal of the meeting is to reposition the sector on the path of accel­erated growth, enhance its competitiveness and reap its multiplier effect on the econ­omy and the well being of the citizenry.”

Highlighting the problems diminishing growth in the sector, he stated that “the pre­vailing microeconomic envi­ronment places severe strains on the manufacturing sector,” adding that “this is adverse­ly affecting jobs and people’s livelihoods of the citizens.”

Also, Chairman of the Dangote Group, Aliko Dan­gote, stressed the importance of reducing import depen­dence, stating that “import dependence is equivalent to importing poverty and ex­porting jobs.”

Delivering a keynote speech, he highlighted the ne­cessity of reliable power sup­ply and affordable financing for industrial growth. Notably, Dangote called for protective measures for local indus­tries, asserting that “there is no industrialisation without protection.”

He criticised the hike of interest rate to almost 30 per­cent by the Central Bank of Nigeria (CBN), noting that with the present interest rate regime, it will be difficult to create jobs.

He added that it would also be tough for the manufactur­ing industry to grow and com­pete favourably.

Dangote, who also called for new policies that will pro­tect domestic industries, said, “Nobody can create jobs with an interest rate of 30%. No growth will happen.”

Also, former Minister of Finance, Olusegun Aganga, urged the government to de­clare manufacturing a nation­al priority sector.

He pointed out that the mere possession of natural resources does not guarantee national wealth.

“What makes a country rich is what it does with its re­sources,” Aganga said, calling for a shift from peasant farm­ing to commercial agriculture and from artisanal mining to attracting major miners.

FG Approves Withholding Tax Ex­emption For Small Businesses

Meanwhile, the Federal Government has approved the exemption of withhold­ing tax for small businesses, manufacturers, and farmers.

The Chairman of the Pres­idential Committee on Fiscal Policy and Tax Reforms, Tai­wo Oyedele, disclosed this on his official X-handle on Tuesday.

He said the approved regu­lation was expected to be pub­lished in the country’s official gazette in the coming days.

According to Oyedele, a simplified and busi­ness-friendly withholding tax regime has been approved as part of the ongoing fiscal pol­icy and tax reforms.

He said the committee in­troduced some critical chang­es to address the identified challenges in the withholding tax system.

The key changes, he said, include the exemption of small businesses from with­holding tax compliance; re­duction of tax rates for busi­nesses with low margins; exemption of manufacturers and producers such as farm­ers, and measures to curb evasion and minimise tax avoidance.

Other changes made are ease of obtaining credit and utilisation of tax deducted at source; changes to reflect emerging issues and adopt global best practices; and clar­ity on the timing of deduction and definition of key terms.

Giving a background to the withholding tax regime, Oyedele said, “Withholding tax was introduced into the Nigeria tax system in 1977 to serve as an advance payment of income tax on specified transactions.

“It was designed to provide the government with regular revenue flow and to serve as a means of curbing tax eva­sion.”

He explained that the chal­lenge with the tax regime has been its expansion over time to cover more transactions, as such, various ambiguities and complications crept in.

“This resulted in many businesses, especially SMEs, being exposed to excessive burden of compliance and a strain on the working capital of low-margin businesses,” the tax expert maintained.

He highlighted other unin­tended consequences includ­ing ambiguities regarding persons required to comply, eligible transactions, appli­cable rates, and timing of the obligation for remittance, among others.

It also includes challenges regarding obtaining refunds for excess withholding tax, and treatment of the deduction as a separate tax, thereby adding to the list of multiple taxes and cost of doing business.