The Manufacturers Association of Nigeria (MAN) has said that while the economic reforms under President Bola Tinubu’s administration have brought hardship to businesses and citizens alike, they remain a necessary step toward national recovery and long-term industrial growth.
This position was made known by Chairman of MAN in Cross River and Akwa Ibom States, Adoga Inalegwu, during a familiarisation tour of member companies in Calabar over the weekend.
According to Inalegwu, although manufacturers are grappling with the harsh economic environment, the Tinubu administration’s decisions particularly on taxation and exchange rate management reflect bold and much-needed reforms.
“I think President Bola Tinubu’s policies are necessary and tough decisions that Nigeria needs presently. If we keep deceiving ourselves that everything is okay, we will never solve our problems,” he stated.
Tax Reform Brings Mixed Outcomes
Speaking on the government’s ongoing tax reforms, the MAN regional chairman acknowledged that while the changes are controversial, they bring notable benefits to the manufacturing sector especially in the reduction of multiple taxation.
“People complain about the tax reform, but it has pros and cons. One of the major advantages is the shrinking of multiple tax burdens that we are faced with as manufacturers. That’s very important,” he explained.
He also noted that efforts to boost the population’s disposable income are commendable, even if the results are not yet fully visible.
Forex Availability, Not Affordability
On foreign exchange, Inalegwu said manufacturers are unhappy with the high exchange rate, which remains above ₦1,500 to the dollar, but welcome the recent stability and availability of forex in the market.
“We’re not satisfied with the exchange rate, but we’re happy it has stabilised. More importantly, the dollar is now available,” he said.
“In 2023, I personally went through a lot just to source forex. It was a nightmare. That’s no longer the case today.”
Despite the improved access to forex, he pointed out that input costs have doubled, as many manufacturers still rely on imported raw materials.
“The good news is that Forex has had some bit of stability, but the cost of importation has still gone up significantly,” he added.
Manufacturers Adjusting to Survive
While the reforms are welcomed in principle, Inalegwu acknowledged that many firms are struggling to cope and have had to adapt in order to stay afloat.
“This doesn’t mean all our members are unaffected. Times are tough. But difficult times require companies to evolve not just to survive, but to thrive,” he said.
“Nigerian manufacturers must remain resilient, ambitious, and forward-thinking even when things are not rosy.”
VAT Hike Still a Concern
On the recent 2.5% increase in Value Added Tax (VAT), the MAN boss expressed dissatisfaction, citing its significant impact on firms with large turnovers.
“I’m not happy with the VAT increase. For companies that spend billions, the 2.5% hike is quite substantial. One way or another, it will eat into revenue,” he noted.
Outlook
Despite the challenges, Inalegwu maintained a cautiously optimistic view, suggesting that the current policies though imperfect may gradually lay the groundwork for economic recovery and industrial growth.
“The policies may not be perfect, but things are looking up even if it’s not a perfect story yet,” he concluded.
