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MAN Laments  Effects of N77trn Govt’s Debts On Manufacturing Sector 

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The Manufacturers Association of Nigeria (MAN) is worried that  the Federal Government’s debts which has ballooned to N77 trillion, is not doing good to the economy and the manufacturing industry.

Segun Ajayi-Kadir, the Director-General of  MAN, shares detail of how the debts are affecting companies in the sector, and also proferrs the solutions for implementation by the government.

In a position document, he notes that as of December 2022, the country’s total debt had escalated to N46.25 trillion. This represents about 17 percent surge from the record of December 2021.

The debt composition revealed that while domestic debt stock accounted for 59.6% of the total debt, external debt stock contributed 40.4%.

Unfortunately, the country’s debt profile has ballooned to over N77 trillion following the approval of the securitization of the Ways and Means advances.

A whooping debt service-to-revenue ratio of over 100 percent may spell doom for the new administration leaving it to continue the borrowing spree or incapacitated to provide critical infrastructure needed to boost the manufacturing sector and kick start the recovery of the economy.

The domino effects of escalating public debt on the manufacturing sector are endless.

  1. To start with, rising domestic debt is highly crowding out private investment in the manufacturing sector by reducing credit availability and forcing hike in lending rates. External debts are mostly serviced in foreign currencies, hence high demand for foreign currencies further depreciates the naira and makes importation of non-locally produced critical inputs highly expensive for manufacturers.  
  2. Moreover, higher debt servicing is consuming greater volume of forex and worsening the forex scarcity that has plagued the manufacturing sector for many years. Higher debt repayment requires increased revenue.
  3. The Nigerian government has continued to breed a harsh business environment by its indiscriminate imposition of high and multiple taxes on manufacturers all in a bid to generate revenue. A major point of reference is the recent exponential hike of the excise duties on beverage and tobacco goods.
  4. Huge public debt led to low foreign investment and foreign capital inflow which worsen the forex scarcity that has remained a bone in the throat of manufactures.
  5. As public debt continues to grow unsustainably, it becomes increasingly difficult to cover salary payments and other recurrent expenditure in the civil service.

The implication is more borrowing for government consumption or recurrent expenditure and less on infrastructure and other capital projects meant to boost manufacturing sector performance. 
Contrary to the popular parlance in the government quarters that Nigeria has revenue problem, the country’s debt crisis is not a result of inadequate revenue and it is anti-growth to view manufacturing taxes as the last resort for curbing the debt problem.

The manufacturing sector which has always been at the receiving end has not felt any significant impact of the debt finance on the numerous challenges that have bedeviled its performance in many years.

  1. Infrastructure decadence, forex scarcity, credit crunch and naira depreciation have become bones in the throats of MAN members despite the humongous increase of over 410% in the country’s debt profile in the last eight years.
    Amidst multiple taxes, Nigeria’s real problem is not revenue generation or collection but the siphonage of collected revenue so that they do not reflect in the records.
  2. Contrary to popular believe, exorbitant taxes are also collected in the informal sector of the economy without adequate remittance into state coffers. MAN is of the view that debt worth of N77 trillion is an enormous burden to inherit and will most likely limit the achievements of the new administration unless the following recommendations are implemented:
    •Increase the revenue base by widening the tax net through an enhanced data capture of business operators in the informal sector
    •Strictly implement the Voluntary Assets and Income Declaration Scheme (VAIDS) through the Federal Inland Revenue Service (FIRS).
    •Further identify and amend the loopholes in the tax laws in order to reduce the leakage of tax revenues
    •Promote fiscal discipline by reducing the cost of governance and strictly complying with section 41 of the Fiscal Responsibility Act and section 38 (sub-section 2) of the CBN Act.
    •Ensure proactive judicial investigation into allegations of oil theft and stamp duty fraud.
    •Embark on mechanisms that promote coordination and confidence among creditors in order to be granted opportunity for debt restructuring.
    •Prioritize debt management and transparency to control risks and reduce the need for restructuring, which stands to benefit both debtors and creditors
    •Ensure proper management of capital and recurrent expenditure by determining the appropriate spending priorities that reflect the yearnings and aspirations of households and businesses within the limits of available resources.
    •Establish incorruptible monitoring teams tasked to ensure effective budget implementation and detailed evaluation of budget performances.

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PENGASSAN – Dangote Rift: A needless attack on private enterprise

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The Director-General, Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, has described the rift between Dangote Refinery and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) as unfortunate, and a needless attack on private enterprise.

He noted that the strike had far-reaching implications on residents and businesses, as factories suffered cuts in production schedules, with a hike in transportation fare.

Fielding questions from reporters at MAN House, yesterday, while announcing the association’s coming Annual General Meeting (AGM), he revealed that imported products, which were not suffering disruption, were likely to fill the gap and if the rift rears its head again, it would affect daily workers and people in the logistics value chain that rely on the products made in those factories.

Meanwhile, PENGASSAN has said it decided to suspend its two-day strike to protect the jobs of its members in Dangote Refinery.The President, Festus Osifo, explained that the union was unsatisfied with the posting of about 800 sacked staff to Dangote’s subsidiaries to prevent job loss.

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FG Spends $2.86bn on External Debts Servicing – CBN

By August 2025, debt service climbed to $302.3m, which was $22.35m or 8 per cent higher than the $279.95m of August 2024.

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The Federal Government spent a total of $2.86 billion to service external debt in the first eight months of 2025.

This was disclosed in the international payment data from the Central Bank of Nigeria.

The figure shows that external debts accounted for 69.1 percent of the country’s total foreign payments of $4.14 billion in the period.

In the same eight-month stretch of 2024, debt service stood at $3.06 billion, representing 70.7 percent of total foreign payments of $4.33 billion.

The figures show that while the absolute value of debt service fell by $198m between 2024 and 2025.

The share of debt in overall foreign payments has remained persistently high, with about seven out of every ten dollars leaving the country used to meet debt obligations.

The monthly breakdown highlights the volatility of Nigeria’s repayment schedule:

In January 2025, $540.67m was spent compared with $560.52m in January 2024, a fall of $19.85m or 3.5 per cent.

February 2025 recorded $276.73m, slightly below the $283.22m in February 2024, down by $6.49m or 2.3 per cent.March 2025 surged to $632.36m against $276.17m in March 2024, an increase of $356.19m or 129 per cent.

In April 2025, payments reached $557.79m, which was $342.59m or 159 per cent higher than the $215.20m of April 2024.

May 2025 stood at $230.92m, sharply lower than the $854.37m in May 2024, a drop of $623.45m or 73 per cent.

June 2025 rose to $143.39m compared with $50.82m in June 2024, a rise of $92.57m or 182 per cent.

July 2025 fell to $179.95m, down by $362.55m or 66.8 per cent from $542.5m in July 2024.

By August 2025, debt service climbed to $302.3m, which was $22.35m or 8 per cent higher than the $279.95m of August 2024.

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ECOWAS Bank okays $308.63m for Nigeria, Guinea

The bank gave the approval during its 93rd Ordinary Session convened at the it’s headquarters in Lomé, the Togolese capital.

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ECOWAS Bank for Investment and Development (EBID), has approved $308.631 million for the implementation of various projects in Taraba State, Nigeria, and a $40 million credit line for Vista Bank, Guinea, to bolster trade-related activities, including import-export operations and commercial value chains.

The bank gave the approval during its 93rd Ordinary Session convened at the it’s headquarters in Lomé, the Togolese capital.

President and Chairman of Board of Directors of the bank, Dr. George Agyekum Donkor, said the newly approved financing would advance strategic public and private sector initiatives, aligned with EBID’s mandate to promote sustainable development throughout the Economic Community of West African States by strengthening regional integration and fostering economic diversification.

The approved facilities include the $98.18 for a 50 MW Solar Photovoltaic Power Plant in Taraba State, Nigeria, , which will augment the supply of reliable, clean electricity to spur inclusive economic development, alleviate energy poverty, and improve environmental sustainability.

Anticipated benefits include direct electricity access for roughly 390,000 individuals, enhanced power reliability for at least 200 public institutions, the creation of 400 direct jobs during construction, and approximately 50 permanent operational roles.

The bank noted that an estimated 1,200–1,500 indirect jobs were expected to emerge across supply chains, maintenance services,and small businesses.

Another facility is the $79.219 million modern rice processing complex and 10,000-hectare irrigated rice production unit also in Taraba State.

Also included is the $91.232 million facility for Taraba State Industrial Park, an initiative conceived to accelerate local industrialisation and economic diversification through the establishment of a modern, integrated industrial ecosystem.

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