- Declining Turnover, Profit Margin Impacting Jobs — AFBTE
The Association of Food, Beverage and Tobacco Employers has attributed the increasing job losses in the food and beverage industry to declining turnover and profit margin caused by the poor economy.
The organised employer’s group noted that the state of the economy had not been friendly to manufacturers during its 38th Annual General Meeting held in Lagos.
In his address, the President, AFBTE, Mr. Paul Gbededo, said the food and beverage sector was one of the most badly hit by the economic recession in the country.
He stated, “We recorded a drop in turnover and profit margins as well as decline in capacity utilisation, which has resulted to massive loss of jobs, while those companies that didn’t retrench workers reviewed downward their staff salaries and allowances.
“Trouble started for the manufacturers when the Central Bank of Nigeria removed 41 items from the list of utilisers of foreign exchange.”
He added that the continued drop in the value of the naira against the United States dollar and the high cost of sourcing for dollars had made it difficult for the manufacturers to import their raw materials.
According to him, those who were able to pay got delayed for about four months before accessing dollars.
Gbededo urged the government to reduce Company Income Tax for manufacturers in order to attract investments that would pull the economy out of recession, saying that this had been done successfully in other countries.
“Government should also adjust the Value Added Tax and Personal Income Tax downward as the country has gone into recession with the growth of the productive sector being significantly negative and consumption has whittled down as a result of inflation,” the AFBTE president said.
He appealed to members companies to be innovative, bold and creative in the marketing of their products and services.
“Manufacturers must embrace technological advances to improve efficiency and productivity, import substitution through backward integration and local raw materials aggregation may hold the key to the future of AFBTE companies,” Gbededo added.
A professor of legal, social and political environment for business from the Lagos Business School, Olawale Ajai, urged the government to enhance the business environment for manufacturers to survive the tough economy by not favouring one sector over the other.