 Welcome back and now to my interview segment where manufacturers are reacting to the recently released 2023 fiscal policy measures FPM by the Federal Ministry of Finance, Budget and National Planning, including the excessive increase in exercise on beverages and tobacco and the introduction of attacks on single-use plastics among others. Joining me now is the DG of the Manufacturers Association of Shegu Ajayikaru. Many thanks for joining me on Plus TV Business Insights. Thank you for having me. Alright, let's start this way. Now the manufacturing sector is in acute recession, but what's the impact directly on the 2023 PM? What is it really having on the manufacturing sector? Yes, thank you. You already indicated that the sector is faced with recession and this was actually confronted by the mayoral transition and the law in source that resulted from it. So on the back of this, we now have this installation of exercise duty as indicated in the 2023 fiscal policy measures of government. What this has done is to effectively put an end to any profit projection by any of those industries going forward. I will recall we had an agreement with the Ministry of Finance, Budget and National Planning way back in 2022 where we entered into a three-year roadmap that was going to end 2024. But not quite a year after it was entered into, there was an installation that was way out of the agreed roadmap and that was what we saw on the 2023 fiscal policy measures that gave us, gave rise to the concern that we expressed. Alright, I did to understand what is international best practice surrounded issues like this. Is it consistent with it? Because from what we hear the sector is being taxed about five times more than the average for exercise duty. What is the situation really? Yeah, you are right. You are taxed five times higher and that is partly inconsistent with international best practice. What is expected is for government to allow the policy environment to bring on government the policy environment that allows for planning and projections. That is the only way any company can decide to work some investment joint went. And this is what it has eroded. Many people who want to invest in Nigeria will be worried of such an investment because we cannot be certain that what government has said if we do, it will do. And then the projections that you have made for those three years, you will have to review them and it may be consistent with what you have shared with your shareholders and stakeholders. Now I'm trying to understand what the direct impact would really lead. In my opinion, I'm thinking that there might likely be low sales and it might impact on the structure of businesses in the sub-sector. Can you throw more light on that? Yes. You see, apart because there is a downward trend in the distribution income of an average Nigeria. This was compounded by the Naira transition and the effect we are still having. There is also inflation that has gone beyond 23, 24, 25 percent. There is also the issue of even some states not being able to pay the minimum wage. So when you see all across the country a reduction in disposable income, you are going to see low purchases. When there are no purchases, the manufacturer will reduce his installed capacity. But there is no point for you to produce what you cannot sell. So you are going to start to see a drop in job creation. You are also going to see some downsizing. Then it's going to affect those that are in the value chain who also are doing home sales and retail. And those who slightly will depend on the devices that they made from this product. You are also going to deny the average Nigeria the opportunity to enjoy these goods and products. And the side effect of all of this is that you see massive influx of illicit and agosome products. There is a general negative impact even on government revenues. Before we talk about the impact on government revenue, I want to look at the value chain in those subsectors. That's the alcoholic ambivalence and of course tobacco. In my opinion there is, it is really wide. We have the bought last, we have distributors, we have the farmers, and it is wide. So I'm trying to understand how it will really impact on them. Can you tell us more? Yes, for instance, those who are taking packaging, because there will be reduced sales and there will be reduced order from this manufacturing industry. We are going to have them not being able to sell as much as they would. So those that are involved in packaging, those that are producing the pots, those that are producing the wrapping sheets, and those who rely on, who rely on farmers to supply the, the farmers will not, those who are able to produce, will not be able to sell their products. So it's going to impact negatively on the agricultural sector. Also in the logistics value chain, we are going to see a reduction in the trips that they have to make. We are going to notice that the taxes that all these, all these players in the value chain are getting, there's going to be a reduction in the revenue that they make from it. So what we are likely to see is a chain downturn in the numbers of places that are engaged in those, in those things. Apart from the financial aspect, there's also the social aspect of the impact. All right. I want to quote something that you said, the Manufacturers Association that they said in its press release concerning that you said the total exercise derivable from the exerciseable sector is insignificant when compared to Nigeria's revenue needs. Can you explain more? Yes. So what we are noticing is that government assumes that we get about 150 billion Naira in addition when this exercise is increased. But if you look at the size of the budget deficit that government is trying to cure, it's 12-3 years. So is this significant addition in terms of trying to grow the volume? So we are saying that the social impact, the economic impact that this is going to have is not justifiable. How is it going to help you? How is 150 billion going to assuage or cure an element that is 12-3 that 12-3 is required? So that's what we are saying that this should not be too much for government to reverse. This need to not be too much for government to forego and repeat in terms of the likely expansion in capacity utilization that they are going to give if we maintain the roadmap that has been set for 2022. Because after the third quarter, my assumption is that we will start to see a downward trend. And even that 150 billion government is not even going to get. Okay, fine. I need to look at our national tax policy. And this is 2023 FPM. Is the implementation period provided for in the 2023 FPM looking at our national tax policy? Yes, it's inconsistent. And to that extent, we are asking that due process should be allowed to be followed. But we are hoping that government is looking for a way to cure this infraction, because it can even lead to litigation. And I hope that government will not allow it to get to that level. It can be self-administrated. All right. Now, so as it is with all of this bottlenecks and inconsistencies and the impact that you have talked about now, what is the way forward and what is the Manufacturers Association of Nigeria going to do in the next coming days and weeks? Okay, thank you. We have made it clear that we appeal to government to reverse the escalation in these fiscal policy measures, particularly as it affects the alcoholic beverages and tobacco. And the reason is very clear. We have stated that if you negate it may impact the industries immediately, and that on a sustainable basis, it's not good for government. So we are looking for a reversal. We will report the end of this administration, which is coming in another nine, ten days. And that if that fails, we are hoping that within the first month of the new administration, it should be reversed. Because if it allows to stay, it will make the food and beverage sector to follow in the tradition of the tire industry and also the textile industry. There is no risk for us to create crises in this sector that is making the most contribution to manufacturing GDP in Nigeria. So I mean, that is the immediate we are asking. And of course, as to what demand is being, we continue to agree with government, and we continue to hope that the message will be hard enough to reach to initiate the redacted. Well, thank you so much. I would do appreciate your time and the inputs that you have mentioned and talked to us about. And we just hope that the administration of President Mohammad Buhari, of course, the incoming one would actually do something to create the enabled environment for our manufacturing sector to thrive. We do appreciate your time. Thank you very much for having me. Our pleasure. I have been speaking with the DG of the Manufacturers Association of Nigeria, and he's talked extensively concerning this new exercise duty. But as we go on the show, I'll leave you with this feature on tackling employment. I am Justin Akademi. Many thanks for watching, and I'll see you again next time. Bye for now. The nation's higher educational institutions equip graduates with hard skills, while neglecting their development of employability skills, which are core for transitioning into the labor market, as well as for workplace productivity. The lack of these skills in graduates keeps them in the pool of the unemployed, no matter their degree of certification. Now, Executive Director Ego Foundation to Luwashi Olamio says this project aims to equip participants with the right skillset for employment and also prepare them for the world of entrepreneurship. A good number of young people are currently now unemployed. And this is because the lack of basic skills like critical thinking and problem solving, those skills that can help them perform in the labor market. So, employees are not getting what they want from them. Unfortunately, they're able to employ them. And after the flag of this project, we're setting up mentoring and coaching centers across different institutions where students are able to speak to coaches and are able to have continuous career development sessions so that it doesn't just end here. One of the unique aspects of this training is to provide access to jobs for selected participants and also expose them to the realities of the workplace. Employability is an important part of our economic growth because when the people of the nation or the society are employed, productivity is increased as a company, I mean as a country and the GDP of the country also tries on productivity. A way forward is for people to actually consider a lot of capacity-building trainings. The four walls of an academic institution is not going to provide all the kind of knowledge and skills you need. You have to self-develop, self-train yourself through different, taking part in trainings, capacity-building and the likes. There are several causes of graduate unemployment in Nigeria, including an inelastic labour market to absorb the turnover some of the participants share their thoughts. Steal by skill acquisition because most of the, like most companies now, I don't know good English, like they don't really want to employ more because technology is already taking over lots of jobs now. With the help of writing a good CV because majority of us, I think the reason why we are not seeing good jobs is because of not, like you can't write good CVs. So with this program now so they are teaching us how to write good CVs and how to get good jobs. Another way to address the challenge of employability skill-induced employment is to incorporate the learning of these skills in the curriculum of higher education.