The Manufacturers Association of Nigeria (MAN) has warned that the country’s rising debt burden is having a negative impact on the manufacturing sector.
In its first quarter Manufacturers CEO Confidence Index, MAN said that the sector is facing a number of challenges, including high taxes, rising input costs, and a shortage of foreign exchange.
The association said that the government’s indiscriminate imposition of high and multiple taxes on manufacturers is making it difficult for them to compete with foreign rivals.
MAN also warned that the country’s debt burden is not sustainable and that it is putting a strain on the economy.
The association called on the government to take steps to reduce the debt burden, such as widening the tax net and reducing the cost of governance.
MAN also recommended that the government should invest in infrastructure and create a more conducive business environment for the manufacturing sector.
Nigeria’s debt burden has been rising in recent years. The country’s total debt stock stood at N39.6 trillion ($105 billion) as of December 2022. This is equivalent to 35.4% of the country’s GDP.
The government has been borrowing heavily to finance its budget deficit. The deficit is expected to widen to N7.3 trillion ($19 billion) in 2023.
The rising debt burden is putting a strain on the economy. It is also making it difficult for the government to invest in infrastructure and other development projects.
MAN has made a number of recommendations to the government to address the challenges facing the manufacturing sector. These include:
- Widening the tax net to bring more businesses into the tax system.
- Reducing the cost of governance by cutting down on waste and corruption.
- Investing in infrastructure, such as roads, power, and water.
- Creating a more conducive business environment for the manufacturing sector.
The government has said that it is committed to addressing the challenges facing the manufacturing sector. However, it remains to be seen whether the government will be able to implement the necessary reforms.