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The
manufacturing sector is fraught with many problems which has stifled
the sector from contributing to the growth of the economy.

According to the
director general of the Manufacturers Association of Nigeria (MAN),
Jide Mike, an enabling environment needs to be created for the
manufacturing sector to thrive.

Speaking yesterday
in Abuja at the investment forum of technology exposition ( Techno-Expo
2011), he said the dismal performance of the manufacturing sector was
due to the high cost of operating business, among other factors.

He identified the
cost of challenges faced by manufacturers to include high operational
costs in the area of alternative sources of power generation such as
gas, diesel, and LPFO, cost of fund as a result of high interest rate,
lack of long term loans, and inadequate operational fund for the Bank
of Industry.

Other challenges include high cost of infrastructure, such as energy, transportation, mobile telephones, and internet tariffs.

On taxation, Mr.
Mike said, “the case of multiplicity of taxes among the three tiers of
government is a great problem to the manufacturing sector, and indeed
to all other business concerns.”

Multiple taxation

According to him,
recent research carried out by MAN in conjunction with Centre for
International Private Enterprise, Washington, USA, shows that over 100
taxes and levies are currently being charged by the three tiers of
government in Lagos, Oyo, and Ogun States, as against the 38 legally
approved.

He noted that while
many nations operating tax business friendly environment are further
reducing the number and rates of taxes as part of the economic stimulus
package, the reverse is the case in Nigeria.

“Charges by
concessionaries and the high cost of administering the recently
introduced cargo track note by the Nigerian Port Authority and the
aggregate of all the above put the country’s manufacturing costing as
much as 45 per cent higher than world averages. The locally made
textile products are more prone to this phenomenon,” Mr. Mike said.

Other experts at the expo said developing industrial cluster will boost the manufacturing sector in Nigeria.

Olufemi Bamiro,
vice chancellor of the University of Ibadan, in his address, said there
are thousands of clusters around the world including the highly
celebrated Silicon Valley information technology cluster of the United
States of America, and in Nigeria, the Nnewi industrial cluster in
Anambra State and the Otigba ICT cluster in Lagos.

He said several
clusters have been identified in Nigeria, particularly by Raw Materials
Research and Development Council (RMRDC) in the areas of textile,
furniture, leather, agro raw materials processing, metal working,
mineral processing, among others, noting that clustering has become a
powerful weapon to face competition – local or global.

Cluster initiative

According to him, it is increasingly becoming one of the key drivers of economic growth in localities, cities, and regions.

“Consequently, most
nations are engaged in mapping and evolving appropriate cluster
initiatives aimed at transforming them into innovative clusters,” Mr.
Bamiro noted.

He said that in the
developed and some developing economies, the cluster initiative has
become a central feature of industrial planning aimed at improving
growth and competitiveness.

“The main thrust of
cluster initiatives/policy is not to create cluster from scratch but,
most importantly, how to help existing clusters to develop and
transform into innovative clusters. This is particularly important in
the Nigerian setting with several calls for the replication of the
Nnewi phenomenon in other places in the country,” he said.

He said increased
expertise provides sourcing companies with a greater depth to their
supply chain and allows for inter-firm learning and co-operation, which
offer a wide range of benefits to both business and the wider economy.

Despite the
decision by the National Assembly to cut the budget proposals by
government ministries, departments and agencies (MDAs) by 50 per cent,
the Finance Minister, Segun Aganga, insists the country is buoyant
enough to finance government business.

Many of the
ministries and agencies had their 2011 appropriation sliced in a manner
that members of the various committees say was indicative that the
country is broke and can ill-afford funding the budget.

“The 2010 budget,
in my opinion, is a failed budget,” lamented the chairman, Senate
Committee on Environment, Grace Bent, while appraising the 2010 budget
of the Environment ministry last Thursday.

Mrs Bent’s view was
re-echoed by most of her colleagues in other committees and she finds
it worrisome that the Environment ministry, like many others,
implemented only 47 percent of its capital budget for the year, about
six weeks before the expiration of the 2010 fiscal year, as against 100
per cent recorded in the recurrent expenditure and overhead budget.

Indications are
that out of the total allocation of N29.522 billion in the 2010 budget,
the Finance Ministry has only released N10.115 billion to the ministry
till date.

The Environment
minister, John Odeh, blamed the poor performance of the budget on the
Finance ministry’s failure to release the capital budget in full due to
complaints of shortfall in the country’s revenue.

Mr Odeh’s
counterpart in the interior ministry, Emmanuel Iheanacho, also
announced 100 per cent implementation in recurrent expenditure, while
the capital expenditure was about 43 per cent. Mr Iheanacho’s complaint
was that the Finance ministry released only 50 per cent of the
ministry’s 2010 capital budget, because of the shortfall in the
country’s revenue, though the recurrent and overhead budgets were
released and fully expended.

Prudent management

However, Mr Aganga,
explained that the decision to slice the ministries and agencies’
budget is part of the measures being pursued by government to ensure
discipline and prudence in the management of the country’s finances.

“The truth is that
Nigeria is not broke. The question that one needs to ask is: The ones
that they (ministries) got last year, have they used it? Or how well
did they use it? There is no doubt that the country is making more oil
revenue today because commodity prices are going up. But what one
should know is that we are running a deficit budget, which is the
highest ever budget in the history of the country.

“Besides, this is
an expansionary budget because of what government is doing. We must
learn to live within our means. What government is doing is trying to
reduce the huge cost of running business, by emphasising fiscal
discipline and prudence, without necessarily compromising quality in
the implementation of the budget.” Mr Aganga said. During the recent
presentation of the overview of the 2011 budget by President Goodluck
Jonathan, the finance minister pointed out that this year’s budget was
underpinned by the four pillars upon which the country’s economic
growth strategy and government’s reform agenda rests.

Apart from the
determination to make Nigerians feel the tangible benefits of the
country’s economic growth, the minister said government will optimise
necessary capital spending by rationalising recurrent expenditure,
while accelerating the reforms to enhance the quality and efficiency of
public expenditure as well as promote greater prudence in the
management of the nation’s financial resources.

The minister had
argued before the law makers that government was withholding funds from
those ministries that did not show sufficient capacity to utilise past
releases, with some of them accounting for as low as 23.3 percent
implementation of the budget.

“Government has
been very lousy with budget implementation. This is a failed budget of
a failing nation,” observed Bukar Abba Ibrahim, a senator, who claimed
that a cut in the capital budget of the ministries was suggestive that
the nation cannot afford it.

“Why would the
Finance ministry not be able to cash back the capital budget of the
2010 appropriation, despite the claim by the Finance minister that the
country is buoyant enough to fund government’s business and considering
that crude oil price has been stable above the budgeted benchmark?” Mr
Ibrahim noted.

When two people become a couple, they
confront a myriad of financial choices and decisions. Are you engaged?
How much do you know about your fiance’s financial situation? After the
excitement of the wedding ceremonies, it will be time to face your
financial future together. Research shows that money matters have some
part in most divorces yet, most couples go into marriage without ever
broaching this subject. It may not be romantic, but it is important.
Here are some of the money issues that you should discuss with your
fiancé or your spouse.

What is your attitude toward money?

You do not just develop good or bad
money habits by chance; attitudes to money are formed very early on in
life and usually develop over many years. You may not even realise the
full effect of your childhood experiences, circumstances, and your
parent’s attitude towards money. Indeed, many people simply assume the
savings and money management habits of their parents. Were they very
frugal, disciplined savers, or were they spendthrifts? Your attitude
toward money can have a significant impact on the financial decisions
you make.

What are your financial goals?

What are your short, medium, and
long-term goals? Where do you see yourselves five, 10, 20 years from
now? Financially, this can mean owning your own home, educating your
children and planning for your retirement.

In relationships, there may be
different goals and priorities. One may be averse to debt whilst for
the other debt is a way of life. He might want a flash car, whilst she
feels more secure with money in the bank. She might spend all the
housekeeping money on jewellery, shoes and bags whilst his priority is
to give the children a sound education. He may view the new home cinema
as their greatest new asset, whilst her priority is to make a down
payment on their own home. If the differences are fundamental, this
will be a source of conflict. At the same time, be conscious of the
fact that it shouldn’t be all about scrimping and saving towards the
future; treat yourselves as well.

Who will manage the family finances?

Women often enter marriage assuming
that their spouse will handle all money issues and thus delegate almost
total responsibility and sit on the sidelines without being involved.
Determine who is best able to manage the routine everyday financial
matters. Teamwork is essential and shared duties work well for some
families, but even if one party is more involved, both should have a
general overview of the total picture. Periodic meetings are important
so you know where you stand financially and can see whether you are
actually moving closer towards your family goals.

How do you feel about budgeting?

It is surprising how many married
couples get by without a budget. Through budgeting, you have a better
idea of what is coming in and how much can be spent. You should both
know how much you pay for your rent or mortgage, utility bills,
insurance, and so on. Budgeting responsibilities should be shared such
that neither partner should feel that they have to shoulder the entire
responsibility. Periodic meetings, say at least once a month are useful
to review bank balances, any outstanding debt, routine expenses as well
as any major expenses that need to be carefully planned for.

How much debt are you bringing to the marriage?

Many people do not discover the full
extent of their spouse’s financial obligations until they are married.
Debt brought into marriage can be a major source of strife if not well
handled. Each partner should know the debt load the other one carries,
as once you are married, that debt load is shared. Whilst you are not
legally responsible for the loans opened in your spouse’s name, it
could certainly affect your eligibility for joint loans such as a
mortgage. It should be a priority to try to deal with it together and
bring it under control.

Who pays for what?

Something as basic as the handling of
everyday household expenses is a source of friction in many families.
How will you handle routine household expenses? You both earn, but how
much should each person contribute? Are you both doing your “share”?
Should it be equal amounts no matter what each person earns, or a
certain percentage? If you earn significantly more or less than your
spouse, it seems only fair to contribute amounts in proportion to your
respective incomes to reflect this imbalance.

Some couples assign expenses – you pay
the rent and school fees, whilst I’ll pay for groceries, utility bills,
and so on. Other couples use one partner’s income for all expenses and
apply the other income to build up savings and investments.

Will you have separate or joint accounts or a combination of the two?

Will you open a joint account and pool
both incomes or have separate accounts? Having a joint account combined
with individual accounts for personal expenses is a good compromise as
each partner takes some responsibility for the household budget, yet is
still able to retain some autonomy. Partners contribute a certain
amount of their monthly salary into the joint account to cover routine
household expenses such as food, utility bills and so on. Some couples
decide to pay their salaries into the joint account and then pay
themselves a monthly allowance.

Remember that parties to a joint
account have a right to withdraw all the money in the account. It is
for this reason that the use of joint accounts is usually limited to
people who have built a solid level of trust. Look critically at the
options and try to come to a compromise that will suit your
relationship.

Will you set spending limits?

Do you have to account for everything
you spend to your spouse? If you show up with an expensive new TV or a
car, could this be a cause of tension? Everyone needs some personal
spending money that doesn’t have to be accounted for. The amount will
vary depending on the couples’ resources and lifestyle. Some couples
set spending limits on how much either can spend without consulting
each other.

Even though there may be the occasional
conflict about money, it is really about how best these conflicts can
be resolved. With careful planning, clear communication and compromise,
you can avoid many frustrating conversations. There is no one size fits
all when it comes to finances in relationships; even the best system
may not always be appropriate so be prepared to modify your system as
your relationship and financial situation evolve. Try to find the right
balance that works for your situation; if one option doesn’t work, try
another. The financial decisions that you make now can have a lasting
impact on your financial future as you go through life together.

Happy Valentine Day!