The Manufacturers Association of Nigeria (MAN) has expressed displeasure over the 2019 Appropriation Bill, describing it as an extension of 2018 and that no new grounds were explored.
It stressed the need to properly align the assumptions of the budget with economic realities.
It, however, urged its members to expect a tough operating environment in the new year, saying the needed policies and infrastructure have not been given sufficient priority by the federal government.
The group stated this in a report made available to THISDAY.
MAN was however optimistic that the capital expenditure component of the budget would be conscientiously implemented.
“The proposed 2019 budget appears to be an extension of 2018 as no new grounds were explored. There is the need to properly align the assumptions of the budget with economic realities. “No doubt, some of the provisions of the budget would be very important in supporting economic activities in the coming year.
“The huge emphasis on infrastructure development, especially power, road and rail is encouraging. However, as more development on the budget unfolds, it will be easier to understand why the budget fell short of 2018 figures, notwithstanding the improvements in the global and Nigerian economy,” it stated.
Continuing, the group noted: “As the budget stands, MAN opines that a lot of works still need to be done while hoping that it will be passed with dispatch.
“In broad terms, the manufacturing sector could be in for a tough operating environment in 2019, seeing that the needed supporting policies and infrastructure have not been given sufficient priority.”
However, MAN advised that in order to achieve the set budgetary objectives, it was important that the federal government should be extra cautious of its rising debt profile in view of the associated services charges and the future economic burden that this will exert on the country.
It also urged the federal government to revisit the assumptions of the budget particularly crude oil production and price as well as upward review of education and health allocations before appropriation.
MAN was also of the view that the implementation of the harmonised taxes and levies should commence immediately, just as it suggested the need for a Joint Tax Board (JTB) to monitor and enforce compliance by states and local governments.
Other steps it urged the federal government to adopt include – cutting-down on government recurrent expenditures to reduce fiscal deficit, borrowing and service charges; shedding the current borrowing size of the government in the domestic financial market so as not to completely crowd-out the private sector; resuscitate domestic refining of crude oil in the country and ensure the operability of Independent Power Producers (IPP) for On/Off grid power generation and the Micro Grid Initiative; re-classify the manufacturing sector into strategic gas users from the current commercial gas user’s classification and an entrenchment of a better exchange rate management which will allow forex allocation tilt more to the industrial sector including the SMEs.
Also, it further stated that for the budget to be effective there was need to sustain expansionary policy stance while ensuring a sufficient synthesis of monetary and fiscal policies.