Government’s policies such as the removal of the pioneer status tax incentive, the forex policy and customs duties are discouraging local and foreign investment, the Group Executive Director, Dangote Industries Limited, Mr. Devakumar Edwin, has said.
He lamented that government’s policies were rendering manufacturing companies inoperative and making the economy stagnant.
Edwin spoke in Lagos at the 37th Annual General meeting of the Chemical and Non-Metallic Products Employers’ Federation.
He noted that floating the naira and allowing its exchange rate with dollars to be driven by market forces would not solve the major problem, which was reduced dollar inflow.
Edwin, who is the President of CANMPEF, complained that the government was not taking to the recommendations of stakeholders, saying that the manufacturing sector needed real encouragement and incentives to prevent the problem from worsening.
“So, instead of giving advice that will not be listened to, we are on our knees praying to God to open the eyes of our leaders to see the pains the ordinary citizens are passing through,” the GED added.
According to him, dollar scarcity challenge will not be addressed when other policies are not attractive to local and foreign investors.
Specifically, he said that five-year pioneer status tax incentives given to new companies, which was reviewed in 2015, was not encouraging, noting that the company enjoyed up to 10 years tax holiday in other African countries where the it had factories.
The pioneer status incentive grants companies carrying out certain approved activities a tax holiday from the Companies Income Tax of up to five years.
He said, “If we remove investment-friendly policies, we will not get investment and existing factories will shut down, existing tax revenues will come down and no new investment will come in. The government has to really look at comprehensive policies and take a decision.”
Edwin also spoke on non-availability of raw materials, saying, “For the last one year, our members have not been getting foreign exchange, many of them need raw materials. For Dangote cement, the raw materials is coming from the ground, which is limestone, but paint manufacturers have to bring in a lot of chemicals and they have not been able to get the dollars to bring in the raw materials.
“Although Dangote cement can get the limestone from the ground, we need to bring in spare parts and mining machinery to keep the operations running. But we are not getting the dollars.
“The purchasing power of the people has been eroded, which has been compounded by the recent devaluation of the naira. The manufacturing sector needs real encouragement, real incentive to continue in business. If this does not come, the problem will worsen.”