According to the Manufacturers Association of Nigeria, the recent rise in excise duty on beverage and tobacco goods will cause firms to scale back operations, resulting in plant closures, job losses, and a drop in exports, among other things.
Francis Meshioye, President of MAN, revealed this, Noting that the excise duty increase is a blatant breach of a promise made to the association by the Federal Government through the Ministry of Finance, Budget, and National Planning on March 23, 2023.
He stated that the exponential increase in excise duty in the 2023 Fiscal Policy Measures came as a surprise to the industry and was, in effect, a betrayal. Meshioye said the increase was coming at a time when the manufacturing sector was immersed in unprecedented crisis and an acute recession, due to extraordinary challenges, namely sustained scarcity of naira, limited access to foreign exchange, high inflation and a struggling economy.
According to Meshioye, the brewing sector, which would bear the brunt of the excise duty hike suffered a massive decline of -169 per cent in profit before tax in Q1 2023.He added that the industry turnover for non-alcoholic beverages and tobacco declined by -15 per cent, while gross profit and profit before tax declined by -31 per cent and -96 per cent within the same period.
Meshioye said, “The manufacturing sector has been struggling with crashing sales, mainly attributable to the sustained naira scarcity.