Imposition of excise duties : Industrialists will lose market shares to countries in sub-region – Economist
Imposition of excise duties :
Industrialists will lose market shares to countries in sub-region – Economist
The Chief Executive Officer (CEO), Centre for Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, has warned that imposition of excise duties on a number of products, as proposed last year by the Finance Ministry will have adverse effects on local companies doing business in Nigeria.
Dr Yusuf, who is an Economist and former Director General, Lagos Chamber of Commerce and Industry (LCCI), stressed that local industrialists will lose market shares to countries in the West African sub- region under such
He informed that the manufacturers association and other business groups are pleading with the Federal Government to suspend imposition of excise duties on trade goods.
“Industrialists are currently contending with high energy cost. The cost of diesel has gone up by over 400 percent. Public power supply has become increasingly unreliable. There is a slump in consumer purchasing power which is affecting aggregate demand.
“Therefore, imposition of excise duty makes Nigerian products more expensive relative to products from the neighbouring countries in the same economic community with Nigeria.
“The implication is that Nigerian industrialists will lose market shares to countries in the West African sub- region under ECOWAS trade liberalisation scheme, because the cost of production in Nigeria is much higher and the imposition of excise duty will make domestically produced products even more expensive”.
He mentioned :
“There is also the welfare implication of citizens whose incomes have been highly bartered by high inflationary pressure.
“We therefore appeal once again that the timing of the imposition of excise duty on selected manufacturing firms is in auspicious and should therefore be suspended to demonstrate greater sensitivity to the plight of manufacturers in Nigerian economy”.
On the role of middlemen in international trade, he said :
“It is important to appreciate the role of traders and middlemen in international trade process, especially from an inclusion perspective. Not all Small and Medium Enterprises (SMEs) have the capacity to directly import their raw materials, machineries, equipment or other inputs on their own.
“It is the traders and middlemen who help to fill this gap in the economy.
It is therefore discriminatory and unfair to exclude middlemen and traders from importation of raw materials, equipment, spare parts or machineries, which may be required by some small-scale industrialists, who do not have the capacity to import these items on their own.
“This policy position should be reviewed for the sake of economic inclusion and without prejudice to regulatory measures to ensure standards and quality.
“Therefore, in the spirit of inclusiveness, traders and middlemen should be allowed to also import some of these items for onward sales in smaller quantities to small-scale industrialists”.