President Muhammadu Buhari, through the Minister of Finance, Kemi Adeosun, has on Wednesday, November 23, pledged to ease the burden of the current economic recession on Nigerians, most especially the manufacturing sector, as the government is planning some form of tax relief.
Recall, that the Central Bank of Nigeria, CBN, had on Tuesday, November 22, agreed to retain the Monetary Policy Rate, MPR, at 14 percent; Cash Reserve Ratio, CRR, at 22.5 percent; Liquidity Ratio at 30.00 percent; and the asymmetric window at +200 and -500 basis points around the MPR, capable of crippling the manufacturing sector across the country.
However, in a bid to cushion the effect of the decision, the Minister of Finance, who has been opposed to the CBN’s decision on Wednesday, during the Federation Account Allocation Committee, FAAC, meeting, hinted of plans to give manufacturers across the country, some sort of tax relief.
According to her, the tax relief was part of measures by the Federal Government, to reduce the negative impact of the foreign exchange crisis on the sector.
Recall, that report released by the National Bureau of Statistics, NBS, for the third quarter of 2016, indicated that the manufacturing sector’s growth rate, was at -2.93 percent year-on-year, lower by 1.02 percentage points, than what was recorded in the second quarter of the year.
The report, had blamed the huge decline, to the continued drop in the naira to dollar exchange rate, which has made industrial inputs more expensive.
Adeosun, noted that since the sector was one of those badly hit by the economic crisis, the Federal Government would support it with some form of incentives next year.
She also added, that massive investments in infrastructure, would be made to reduce the operating costs of the manufacturing sector.
”It is clear from the figures, that the manufacturing sector is the one that is really challenged, and the challenge in the sector, is clearly that of foreign exchange availability.“I think that the sector will benefit from more consistency of the foreign exchange policy.“On the fiscal side, we are rolling out a number of measures to support the manufacturing sector, in terms of tax reliefs, and other measures that will allow the balance sheet of the sector to be repaired.“They (manufacturers) have taken quite a hit, and we will continue to try and support them through it.“We have a fiscal road map that we will be rolling out, and it includes a number of measures around revenue mobilisation, tax reliefs, and the fiscal instrument, which will be issued in 2017, to get the economy back to recovery,” Adeosun said.
On the position of the CBN, that the Federal Government should quickly settle its indebtedness to economic agents, the Minister, said the issue was also affecting the fiscal stimulus objective of the government.
She lamented that the huge debts owed Local Contractors, have made money released so far, not to be felt by ordinary Nigerians.
On the continued decrease in government revenue, Adeosun, attributed the shortfalls to the challenges in the oil sector, caused by the activities of the Niger Delta militants, whose activities has dropped oil production to about 950,000 barrels of crude per day, since August.
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