The Manufacturers Association of Nigeria (MAN) has warned that the newly released 2023 fiscal policy measures (FPM) will lead to industry recession, capacity underutilisation, and layoffs of workers.

Director General, MAN, Segun Ajayi-Kadir, said this yesterday in reaction to the new FPM recently released by the Federal Ministry of Finance, Budget and National Planning, following the approval by President Muhammadu Buhari.

He stated: “The increases in excise tax for 2023 and 2024 as provisioned in the said 2023 fiscal policy came as a surprise to us because, as a major stakeholder, MAN had actively participated in the deliberations on the proposal and presented various positions from its members across all sectors, especially those directly impacted by the proposed measures.”

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Ajayi-Kadir recalled that at a meeting held with the Minister of Finance, Budget and National Planning on 29th March, 2023, MAN representatives were informed that the 2023 proposals on additional excise tax increases were being stepped down until further consultations on the 2023 Finance Bill.

According to him, based on the decision reached at the meeting, “MAN members had finalized their annual strategies and projections while exporting members had concluded pricing negotiations for orders to the end of fiscal period, on the strength of the agreed excise roadmap and recent assurance from the fiscal authority”.

He further stated: “It is worrisome that the current situation is indicative of inconsistency in government policy, given that industries that are affected by excise tax administration, already made 3-year strategic plans based on the agreed calendar as scheduled in the roadmap including domestic and export sales prices, revenue and volume projections, tax burden calculations, etc.

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“This in our opinion may create credibility issues for the country with existing and potential investors, impacting Foreign Direct Investments (FDI) and the country’s Ease of Doing Business index among other implications.

“We are again emphasising the fact that the proposed increase in the recently released 2023 guidelines i.e., on Beer, Wines and Spirits, Tobacco, has the potential to trigger unprecedented distortions in the affected industries as well as the entire manufacturing sector.

“The policy is capable of producing a negative effect on investments with a huge consequence on job retention in these industries.

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“We therefore strongly recommend that the government should maintain the status quo regarding the already government-approved excise duty increases on these items in the 3-year Roadmap as contained in the 2022 FPM.”