Stakeholders harp on infrastructure for value-chain development
Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, noted that government has been targeting increased production output in the agric sector without recourse to the value-chain, which is heavily dependent on infrastructure.
According to him, the value-chain is critical to diversification and if infrastructure is not addressed, the cost of locally produced goods will be high and many consumers may not be able to afford such.
“This further leaves room for smuggling. Lagos alone has a large market for many commodities but the cost of logistics is another concern. The cost of power, credit and transportation cannot be ignored in the value-chain”, he added.
Yusuf explained that it is desirable to accelerate the budget implementation process to stimulate spending and deal with the structural issues of infrastructure.
“The report from the finance minister is to the effect that disbursements have commenced. But the fiscal operations of the states and local governments are critical as well. Most often, very little or no reference is made to the fiscal operations at the other two tiers of government.
“Also, an aggressive tax regime is not consistent with the objective to salvage an economy from recession. This is a time to look at tax incentives as a tool to incentivise private investment and boost private consumption. An appropriate framework to make this happen needs to be worked out.
“In terms of trade policy, current trade policy regime is a significant driver of cost in the economy. An exchange depreciation of about hundred percent over the last two years meant a corresponding increase in import duty payments and other charges on imports. This has profound implications for costs across all sectors in the economy. The economic recovery strategy should take this into account, especially for critical inputs in production processes and the service sector operations”, he added.
On his part, MAN President, Dr. Frank Jacobs stated that the industrial sector, especially the manufacturing sub-sector, should be strengthened by removing all obstacles restraining the growth and competitiveness of the sector.
On infrastructure, Jacobs said: “Development of support infrastructure is needed so as to facilitate the country’s industrialisation efforts. With the current situation, however, it may not be advisable to use borrowed funds only to finance infrastructure development. The private sector should be actively involved in infrastructure development. Government should, therefore, resuscitate the Public Private Partnership (PPP) programme through the establishment of Concession Agreements under Build-Operate-Transfer (BOT) in road construction and maintenance, rail construction and maintenance among others.
“Adjusting taxes downward as the country has gone into recession with growth of the productive sector being significantly negative and consumption has whittled down as a result of inflation. It is not advisable to increase CIT, VAT and PAYE as the productive sector is already hit with dwindling investment. Any further tax increase will crowd out more investments in the sector. Taxes on luxurious goods and property may also be raised”.
Professor of Animal Science, Wageningen University, Netherlands, Imke De Boer, while speaking on Dairy Development Programme in Nigeria emphasised the need for investment in infrastructure, noting that infrastructure in scaling up dairy development in the country.
She said the investments are aimed at improving the social status of the population, urging indigenous companies to increase their investments in local production rather than importing most of what can be locally produced.
“Nigeria should invest in local production rather than importing and I think the investment is a very good start. We believe we can share our knowledge with the local farmers because they know the local situations. We want to identify the areas where we can share our knowledge,” she added.