Frank Udemba Jacobs, the President, Manufacturers Association Of Nigeria (MAN) has said that it is important for the Government to have a better budget spread by re-considering the budgeted amount for Education and Health infrastructure since Health and Education are most critical to long term development and growth of any economy.
Jacobs stated this while addressing the journalist at the manufacturers association of Nigeria’s annual media luncheon held at MAN House, Ikeja.
Jacobs said the proposed capital expenditure budget in 2018 is N555.88 billion for power, works and Housing infrastructure. The increase in budgetary allocation for this vote head is commendable. Poor power supply remains a huge challenge in the country especially for manufacturers who are heavy users of electricity.
He also stated that significant attention should, therefore, be given to improve the current state of electricity generation and distribution in the country. The proposed N9.8 billion Mambila hydro power project and the N12 billion transmission lines and substations are welcome developments, if implemented. This will support productivity in the industrial sector.
Road: “The state of the road network across the country also demands better attention. While there is need to continue to rehabilitate the existing ones, it is imperative to construct new ones. The N10 billion 2nd Niger Bridge; and N300 billion constructions and rehabilitation of strategic roads as proposed in the 2018 budget are commendable. The expected economic benefits of the Second Niger Bridge, a critical arterial infrastructure that links the rest of the country with States in the South-East and South-South of Nigeria, the industrial hub and the oil producing region of the country, would be enormous. Certainly, if this project is properly executed and accomplished, will significantly support and increase the volume of economic activities in the coming years, the president said.
He also noted that the issue of housing deficit also remains critical in the country, with over 18 million deficits. It is, therefore, important that attention should be given to the development of low-cost housing scheme and that Federal Government’s unused property should be converted into housing units. The N35.41 billion National Housing Programme should be further up-scaled and utilized for the construction of affordable houses for Nigerians.
For the industrial sector, construction of more industrial clusters with requisite infrastructure will support productivity and increase the growth of the economy.
“The 2018 capital allocation to transportation is N263.10 billion. This proposed budget is encouraging especially if properly and religiously implemented. Evidence has shown that well developed rail systems aid the process of industrialisation. Therefore, priority attention should be given to the development of critical rail infrastructure in the coming year. There is also the need for the development of inland waterways and the various ports across the country. Dredging of the various ports outside Apaa and Tincan Wharf in Lagos State would diffuse the over-flowing activities at these ports and lower the cost of moving goods from ports to the factories outside Lagos.
“The 2018 budget for Agriculture and Rural Development is N118.98 billion. This allocation appears not significant enough, considering the importance of agriculture to food security and provision of raw materials for the industrial sector. In this era that national discourse centres on backward integration especially in agric sector, it is important to make higher budgetary allocation to the sector. It will be difficult to achieve the growth target of 3.5% and inflation rate of 12.4% in the coming year without encouraging more activities in the agricultural sector. Allocation to the sector should strongly support more crop production, animal husbandry, construction of more silos for agricultural produce storage; and of course encouraging significant activities in the agriculture processing value-chain.
Solid Minerals Development:
“The 2018 proposed budget for Mines and Steel Development is N12.90 Billion. This figure appears to be small compared with the huge need for development of solid minerals to support the resource-based industrialization policy in the country.
“The 2018 budget for education is N61.73 billion. This amount also appears small considering the poor state of education in the country. It falls short of the global benchmark of at least 30% of the national budget. Tertiary institutions are ill-equipped to produce the needed skills that will support industrial production in the economy. Therefore, a well-funded educational system is critical to the long term growth of the economy.
“The 2018 proposed budget for health development is N71.22 billion. This allocation appears insignificant considering the poor state of health infrastructure in the country. Getting proper Medicare has become almost an illusion in the country as many individuals embark on medical tours abroad. It is important to note that no country can experience long-term growth without ensuring that its workforce is healthy enough. Longevity is, therefore, critical to national development. Life expectancy stands at less than 50 years in Nigeria which is abysmally low. Therefore, the budget for health infrastructure needs to be up-scaled so as to match the medical needs of the country.
He also said that it is important for the Government to have a better budget spread by re-considering the budgeted amount for Education and Health infrastructure. Health and Education are most critical to long term development and growth of any economy.
He also suggested that specific Enablers like the following:
- The need for the nation to be extra cautious of its rising debt profile in view of the associated service charges and the future economic burden that this will exert on the nation
- Review the Company Income Tax (CIT) downward from the current 30% to about 20% with targets for employment of Nigerians to technically reflect the prevailing operating environment and economic situation of the country.
iii. The current government recurrent expenditure is on the high side and should be reduced. This will help reduce the huge fiscal deficit which will in turn reduce both domestic and external borrowings and the associated service charges;
- Deliberately shed the current borrowing size of the Government in the domestic financial market so as not to completely crowd-out the private sector;
- Budget implementation which is usually the bane of our budgetary process should henceforth not be tardy but effectively executed;
- A) Foreign Exchange while we appreciate the current policy on forex management- especially to SMEs, we solicit that forex allocation to the manufacturing sector should be increased, in view of the current rising costs globally;
- B) Borrowable credit specially the recapitalize Bank of Industry (BOI) and operationalize the Development Bank of Nigeria (DBN) as earlier contained in 2017 budget;
- C) Development of local raw-materials that accelerate action on the resource-based industrialization programme adopted by the Federal Government through deliberate funding and creation of the enabling environment to do so; Fast-track the development of key selected mineral resources through backward integration, especially those with high inter-industry linkages;
- D) Development of infrastructure like resuscitate domestic refining of crude oil in the country;
Support the efficiency of the Generation, Transmission and Distribution companies;
Encourage energy mix in the country – solar, wind and bio-gas energies should be explored.
Others rehabilitate existing key road network across the country; Accelerate further commitment to the development of the rail system; and Engage in Public Private Partnership (PPP) programme through the establishment of Concession Agreements under Build-Operate-Transfer (BOT) in road construction and maintenance, rail construction and maintenance with credible organizations;
- E) Export Incentives, if properly implement the revised Export Expansion Grant (EEG) and defray outstanding debts;
- F) Tax Issues to fast-track the review of taxes and levies which we understand that government has referred to PEBEC and further expand the tax net to increase Government IGR and do not to increase the tax burden on the already tax compliant businesses;
- G) Address trade malpractices such as smuggling and fake/counterfeit Products by thoroughly enforcing extant laws on smuggling, importation of counterfeit and adulterated products by appropriate agencies; Engage/train more Customs personnel to tackle the challenge;
- H) Patronage of ‘Made In Nigeria’ Products that effectively enforce the Executive Order 003 of the Federal Government on patronage of made-in-Nigerian goods by Ministries, Department and Agencies (MDAs) of the Government; Strengthen sustainable platform through which Nigerians will be conscientized on the need to jettison the current penchant for foreign goods and patronize locally manufactured products
i)Research and Development that can further support the various research institutes in the country and ensure the commercialization of their research results. A more focused research efforts and a broader approach to the commercialization of research results would pay-off.
- J) Petrochemical Development has strong support for the development and establishment of petrochemical industries in the country. The industry is a critical raw-material source for manufacturing, agriculture and other sectors.