The President of Manufac
turers Association of Nigeria (MAN), Dr. Frank Jacobs, says diversification of the economy cannot be truly achieved if the manufacturing sector is neglected.
Jacobs said this in an interview with newsmen on Tuesday in Abuja.
He said that the country needed to accelerate activities geared towards backward integration in the agriculture sector to catalyse more industrial input supply for the manufacturing sector as well as provide food for Nigerians.
Jacobs said that the country required an effective deregulation of the downstream petroleum sector to encourage private investment in domestic refining and petrochemical industry.
“At this period that the economy has gone into full recession, government’s response must address the real issues that led to the inflation and adopt economic policies that will mitigate the situation.
“Short term funds can be made available to the manufacturing sector at five per cent interest rate. Also the 41 items of raw-materials that were excluded from the Forex market by the CBN should be reviewed.
He said the review was necessary “especially as the country now operates a flexible foreign exchange regime”.
“Therefore, government needs to pay more attention to the repositioning of the manufacturing sector as it is better placed to quickly address issues of unemployment, wealth creation and revenue to government,’’ Jacobs said.
Jacobs said that adequate infrastructure development would encourage more domestic production in terms of volume of output and cost effectiveness in the country.
He said that it would be necessary for government to domicile gas price in Naira for manufacturing industries as against the current dollars to boost electricity self-generation by industries.
According to him, strong Public Private Partnership (PPP) in rail transportation will help enhance current economic challenges.
He called on the Federal Government to rehabilitate the existing roads and construction of new ones, to open up the country in the movement of goods.
“If the issues identified are sufficiently addressed, domestic commodity production will be boosted and this will lead to increased foreign commodity substitution.
“The result will be a gradual receding of inflation rate from the current 17.1 percent to a desired level where the economy would be stable.
According to him, inflation is not totally bad for an economy, depending on the degree and rate it assumes.
He said that a creeping inflation of about two to four per cent was healthy for an economy as it helped to stimulate aggregate production without dampening consumption, thereby leading to economic accentuation.