The interest rate review is to enable manufacturers to scale up production while also salvaging manufacturing companies from collapse.
In its first-quarter report (Q1 2020), MAN CEOs Confidence Index (MCCI), the association believed that the review would help manufacturers to improve liquidity and ramp up productivity post-COVID-19.
“Manufacturers that are investing in order to scale up production should be granted loans at a five-percent interest rate for a period of five to seven years. This measure will no doubt improve liquidity and ramp up productivity in the manufacturing sector in a manner that will cover for the obvious losses due to COVID-19,” said the report.
The body also called on the Federal Government to prevail on the Central Bank of Nigeria to “extend its COVID-19 Stimulus packages to manufacturers not covered by existing CBN initiatives” while also requesting the apex bank to grant manufacturers increased access to forex at the pre-COVID-19 rate as it will help with needed raw materials, machines and spares not locally produced.
On taxes, MAN asked for extended “timelines for filing and paying taxes (including excise duty with a proviso that it should be based on sales and not production) by six months after the economy returns to normalcy. It also urged the government to reverse the Value Added Tax (VAT) to five percent and reduce the Personal Income Tax (PIT) to a flat rate of 10 percent saying that it will “improve the disposable income of Nigerian workers, stimulate consumption, promote an upsurge in demand and increase production output.”
MAN also called on the government to pay 60 percent of employees’ salaries of companies forced to shut down due to the pandemic for atbleast three months in order to prevent mass sack.