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Tag: businesses

Businesses paralysed as police launch manhunt for killers of DPO in Ibadan

Residents of Adekile, Orita Aperin in the heart of Ibadan, the Oyo State capital, now sleep with their eyes wide open––no thanks to the flooding of the community with policemen by the State Police Command in search of the killers of the Divisional Police Officer (DPO)attached to the area. He was shot dead by an unknown gunman last Wednesday. OSEHEYE OKWUOFU reports that businesses in the area have virtually grinded to a halt.

Oyo state Police Command was thrown into mourning Wednesday, last week when one of its finest officers, a Chief Superintendent of Police was shot dead by an unknown gunman at Adekile, Orita Aperin, in Ibadan North East Local Government Area of the state during a mass protest by residents over the activities of an alleged kidnapper believed to be operating from the area.

Since the incident which led to the death of the CSP (Ike Nworgu), who was the Divisional Police Officer attached to the Agugu Police Station (covering the area), residents of Adekile, especially the males, have been living in fear as the police intensify efforts to apprehend the killer(s). Security has been beefed up in and around the area as more policemen have been deployed there by the command. Business and other commercial activities have almost been grounded due to the presence of the policemen in the area.

Many residents have fled the area to other parts of the city, leaving the once bubbling community deserted. There was panic in the air, with the few people left behind consciously looking for places to hide away from the prying eyes of policemen.

Particularly hit hard by the presence of the policemen are male residents who are being targeted by the security men with the hope that they may hold the clue to where the culprits may be found. Only the females were allowed unfettered access but not without scrutiny. And for the male, he must possess valuable evidence to prove his innocence.

At a point toward Elekuro area, when The Nation visited the area, everybody was asked to put their hands up while passing through police check. Many suspects, including the principal suspect have been arrested, according to the Police Public Relations Officer (PPRO), Mr Adekunle Ajisebutu. He however, refused to disclose the identity of the principal suspect in order not to hamper ongoing investigation.

In what looks like a declaration of dusk to dawn curfew, the entire community was quiet and deserted when The Nation visited during the Easter holidays as there were little or no economic activities in the area.

Social life has also been affected as most of the residents stayed indoors during the Easter festivities as they could not afford to go out to celebrate as usual during such occasions due to the pervading insecurity in the area..

The incident that led to the killing of the DPO began last Wednesday evening when a group of miscreants, led by some armed members of a local vigilante group, inciting other members of the community, vandalised a house in the area on suspicion that kidnapped victims were kept there by the house owner.

Before the incident occurred, some law abiding residents, it was learnt had alerted the police when the rumoured kidnapper’s den became more pronounced in the community, especially after it was discovered that three wells were dug in the premises.

Tension however rose after the police, who stormed the house acting on the information, left with the owner without any substantial discovery. This infuriated the residents who believed the police did not carry out a thorough search of the house. They thereafter took the law into their hands.

According to one of the residents who simply gave his name as Baba Jamiu said, “The police were called to a property in Adekile area after residents alleged that the owner dug three wells in the premises which they found suspicious. However, the police did not find anything but they left with the owner. The residents then had the belief that the police were protecting the owner. They rained stones on the police and injured one of them. They also descended on the house damaging the property with rocks.”

The rampaging hoodlums, later went for the life of the house owner, but could not apprehend him.

The building, after a futile search for ‘kidnapped victims’ and other occupants, was vandalized and razed down along with two other houses.

Investigation revealed that the trigger happy miscreant who opened fire on the police officer belonged to a vigilante group in the area under the umbrella of Oodua People’s Congress (OPC) which claimed to be providing security in the area.

“That is the only problem we have been having in this area. They call themselves different names, but we know they are OPC members and the community most times engage them as vigilante. Instead of doing the work of a true vigilante, they will be moving from one place to the other causing trouble and smoking Indian hemp and drinking paraga (local herbal mixture prepared with hot drinks)). They are the ones that caused this trouble, first by peddling an unfounded rumour about kidnappers’ den, and then killing an innocent and gentle police officer . Now, they are not the only ones suffering but the entire community because since the incident happened, every activity has been paralysed. Many have abandoned their houses and fled to evade police arrest. We pray that all those responsible will pay dearly for their sins”, Mr Ayodele Gbadamosi, a retired civil servant who lives in the area told The Nation.

The state police Commissioner, Mr Katsina Mohammed, visibly disturbed by the incident has vowed to ensure that all those involved in the killing of the CSP would face the full wrath of the law.

Shortly after the disturbance, the Police commissioner together with the state governor Abiola Ajimobi visited the scene of the crime.

According to the police boss, the slain police officer had gone to Adekile in response to a distress call by one of the residents who alleged that her baby was kidnapped and kept inside a particular building in the area.

He said the DPO had visited the area and inspected the building in question but could not find anything related to the lodged complaint, but while he was explaining to the youths in the area to remain calm as further investigation would be carried out, the DPO was attacked and shot in the head.

Mr. Katsina explained that the DPO, being a gallant officer before he fell to the miscreants’ bullets, also managed to fire at his attacker who also died on the way to the hospital.

He thereafter reiterated the commitment of the police force to ensure that all culprits in the DPO attack were arrested to face the wrath of the Law.

The entire Adekile, Orita Aperin and Elekuro areas are still under a close watch of armed police men while no fewer than 21 suspects were said to have been arrested.

The state governor Abiola Ajimobi, while speaking on the incident harped on the need for peace and security for meaningful development to take place.

He also appealed to the people of the state to avoid violence in all its ramifications as no development can take place in an atmosphere of violence.

The governor pledged his support to the police force to ensure that the perpetrators of the devilish act are brought to book.

Effort to reach the wife of the slain DPO was not successful as she was yet to arrive the country from the United States of America where she resides with his children.

April 8, 2015
‘100 per cent hike in electricity tariff killing businesses’

As the Managing Director/Chief Executive Officer, Juhel Nigeria Limited and President, Enugu Chamber of Commerce, Industry, Mines and Agriculture (ECCIMA), Dr. Ifeanyi Eric Okoye understands the factors hindering the growth of the manufacturing sector and what must be done to make it globally competitive. In this interview with Assistant Editor Chikodi Okereocha, Okoye says if the sector must grow, the poor electricity supply across the country, particularly in the Southeast must improve. He speaks on other issues.

The devaluation of the naira because of the crash in oil prices is forcing companies to lay off workers. What is your take on this, and what is the situation in the pharmaceutical industry?

It’s a problem and we know where it came from. The nucleus of the problem actually is the fact that we have been operating as a mono economy, depending solely on oil. Because of that as the price of oil started coming down our naira started tumbling. This impacted the economy as people have to re-strategise. As far as the pharmaceutical sector is concerned, more than 98 per cent of raw materials used by the are imported. This has affected the prices of goods in the country. So, the prices of drugs will definitely go up a little bit. However, we believe it’s going to stabilise. Given the mono economy nature of Nigeria, the government’s effort to decentralise the economy will definitely take care of the problem. By the time this goes full circle the economy will become stronger. Nigeria, of course, has been trying to ensure that agriculture is not just about feeding ourselves but also exporting our products. The strategy of trying to make manufacturers stronger by making funds available at affordable cost is good; it is only that we have to encourage the government to go ahead with that and make it permanent, not bringing it as an intervention. It has to be a continuous process so that people can access funds at single digit interest not giving special funds at single digit and then going back to an expensive interest rate. So, we hope that when these things are taken care of, the economy will stabilise and every other sector, including pharmaceutical, will benefit.

How can the country contain the problem of raw materials import, which pushes up cost of production?

That is exactly what we are saying; Nigeria should remove its sole interest in oil so that people can go into agriculture and manufacturing. When they go into agriculture, it will affect some of the raw materials from our agricultural products. If they go more into manufacturing, importation will reduce because most manufacturers in Nigeria will start using raw materials that are locally available. This will definitely reduce importation.

The effects of importation appear to be felt more in the petroleum industry. What is NACCIMA’s position on the privatisation of refineries?

The government has no business in business. Every business must be privatised. The government can have a little share to protect its interest and not having sole ownership of the business. Any business the government has sole ownership of will, definitely, suffer because it’s nobody’s business. So, for us, privatisation of the refineries is very necessary. However, in the course of the privatisation, the process must be devoid of corruption in all ramifications. It has to be an open process because the right people who will operate the refineries profitably should be allowed to take them over.

Manufacturers still complain of poor electricity supply more than a year after the privatisation of the power sector. What is the situation in Enugu State and the Southeast?

The situation has not improved; it is even worse now than it has ever been. The worst part of it now is that the tariff has also changed, almost 100 per cent more than it was before January 2015. Before, we used to pay N23.97 kobo per unit of electricity, but from last January it changed to N46.66 kobo per unit and this is killing and really dangerous. The electricity availability has not improved; it is even getting worse and the cost is increasing. This is very dangerous, especially for businesses in the Southeast. The cost is not uniform. In Lagos they pay about N26 per unit of electricity, while in the Southeast we pay N46.66 kobo per unit. This is unacceptable; it is killing businesses.

How are your members surviving the electricity supply challenge?

We will dialogue with the federal and state governments; there is nothing we can do than dialogue.

With the way things are, do you still have confidence in the ability of the GENCOS and DISCOS to turn things around?

I don’t think the ones in the Southeast are going to achieve anything. However, we got information that they have been given some money; the Central Bank gave them over N200 billion recently. That might help them turn things around.

Are your members accessing the N220 billion CBN fund for Micro, Small and Medium Enterprises (MSMEs) and other similar funds domiciled in the Bank of Industry for the development of the industrial sector?

Very few have had access to the funds and we are talking to them and telling them to make the funds available to more people in the Southeast. So, we hope they will open up. We are also advising that they should educate the people more on how to access the funds, not just keeping the funds within themselves and asking people to come individually.

From the experience of your members, what are the issues hindering access to the fund?

I think it is information and collateral. If you want a company to grow, the company doesn’t have to invite its great, great grandfathers to sign for them to be able to access to fund. Collateral for the fund should be made easier.

But from the perspective of BoI, most operators seeking fund don’t have bankable business ideas to back their requests. What is your take on that?

It means that they would need to educate people more so that they will understand what bankable projects are. They don’t pass enough information to the people.

What is the chamber doing to assist members to address some of the challenges of accessing the funds?

What we have to do is to still press BoI and CBN to, if possible, send delegates to chambers when we are having functions to come and educate our members on how to access the fund and present their projects in a way that will be acceptable to them.

Where do you see the economy this year? What are your projections?

Except for the naira problem, which is because of falling oil price, there is hope. And I believe that other issues will be well managed. This year, I think there is hope for the economy. However, it has to be tight; people should really go for what they want; there is no room for unnecessary expenses. The economy will keep growing.

This Enugu International Trade Fair has been shifted to March 13-23, 2015. What should participants expect this year?

This year’s trade fair will be completely different from past editions because we have discussed with many foreign companies. We will have more foreign companies at the fair. Also, we want to introduce innovations. We are going to have a lottery, which means that any visitor to the fair may come with nothing and go home with something valuable and surprising just as in a lottery. We have also decided to establish a very big tent, about 1,000 square metres and fully air-conditioned for special organisations. We have also invited a strong business man, Chief Arthur Eze to chair the opening and he has accepted. We are expecting over 1.2 million people to visit the fair.

How many firms are expected at the fair?

We are expecting about 500 firms, 80 of which are foreign ones. We are visiting various embassies now. Asian, European, American and Chinese companies would exhibit at the fair.

Is the chamber collaborating with the Enugu State Government? What kind of support are you getting from the state government?

The Enugu State Government has been supportive as before. This year, at least, it had tried to make the venue of the fair more presentable. It has also before the fair resurfaced the road leading to the ground and the one in front of the fair which is completely tarred. The governor has made Enugu a different city. If you come into Enugu, there is nothing black out in the night. Generators power street lights, highly illuminating the town throughout the night. This has reduced crime within the city at night and allowed people to enjoy the city at night. Today, visitors are free to walk around without fear.

How has previous fairs impacted the economy of state and the Southeast?

If the fairs don’t impact the economy of the state and the nation in general, we will not continue what we are doing. Recently, from last year, Nigeria became the biggest economy in the whole of Africa. This is one of the results you are getting from fairs all over the country and Enugu Chamber of Commerce, Industry, Mines and Agriculture has assisted most of the South East, South-Southern states in terms of economic growth of the nation. So definitely we must have contributed to Nigeria’s being the biggest economy in Africa. If you look at some of the companies within the Southeast, you notice that some of them actually started business from the contacts the made during the fairs. We have a company like Innoson Group, which originated through its contacts from the fairs. The fair has been a fertile ground for business contacts and because it’s a regular thing people look forward to it to come and start new businesses. Entrepreneurs come every year to start new businesses and also grow existing ones. It contributes a lot to the growth of the nation’s economy.

Aside the state government, are you enlisting the support of organisations and private sector operators?

The support we expect from them, which we have got, is for them to be part of the fair. Many foreign companies are part of the fair already and indigenous companies are also part of the fair. So, they are coming and as they come, they have to make some payments for taking part in the fair; they also stand to do their businesses. After all, the trade fair complex belongs to the Federal Government, it’s not owned by the state, which means the Federal Government is really part of it. And it’s good to let you know that the President will declare the fair open.

The fair is holding this month. Did you factor in the coming general elections?

Actually, we changed the date because of the change in election dates. We were to have the fair from March 27 to April 7 but we had to change our dates to March 13 to 23.

What are the arrangements to ensure the security of lives and property of participants at the fair?

We have made necessary arrangements. Like I said earlier Enugu State is the safest state in the federation because of the way the governor had made it. Like I said there is nothing like darkness at night; crimes thrive where there is darkness. Crimes don’t thrive where you have light. The issue is that we have on our own provided some security around the fair. The Federal Government is involved, the Police are involved, and the state government is also involved so there is no problem at all with regards to security. We’ve never had problem of security since we started having fairs over 25 years ago and of course, we won’t have it this time.

March 9, 2015
LCCI: unfair competition killing businesses

THE Lagos Chamber of Commerce and Industry (LCCI) has raised the alarm over the problems facing the manufacturing sector.

Its President, Alhaji Remi Bello, said many sectors were faced with unfair competition caused by importation.

He said the situation has continued to hurt the sector, especially in areas, such as smuggling, faking and counterfeiting, influx of substandard products and evasion of import duty payment.

Others are under invoicing of imports and granting of underserved waivers.

Advising the government on the need to improve non-oil revenue in the light of dwindling fortunes in the global oil market, he cautioned that the idea of giving targets to revenue-generating agencies could backfire.

He said: “There is a risk that best practice principles would be compromised in the desperation to meet the set target. Already, this is beginning to manifest in the manner of import valuation by the Nigerian Customs Service. Reports reaching the Chamber indicate many instances of upward review of values of import in complete disregard to the values of invoices of such imports.”

He also alleged that importers had been made to pay exhorbitant import duty and charges, a practice which has affected investors, especially in the absence of an effective dispute resolution mechanism.

He suggested non-oil areas, especially taxes, by improving the environment for businesses.

Observing that the harsh environment would make it difficult for the government to realise the desired tax revenue, he noted that tax revenue could only be as good as the performance of businesses.

He urged the government to nurture the private sector to get robust revenue in form of tax, insisting that emphasis on tax should be more on consumption than on production.

He said: “There is too much emphasis on investors for purposes of taxation, especially in tax on their raw materials and other input; high tariffs on energy and business premises. We should focus more on taxing consumption.”

On the insecurity, LCCI lamented that the problem was disturbing investments.

He decried declining investors’ confidence in the economy. According to him, this is as a result of the negative impact of the country’s image and perception. Others are risks of doing business in some parts of the country, relocation of businesses away from the troubled spots and setbacks for the tourism sector.

According to him, there is the distraction of the government from other germane issues in the country, leading to the abandonement of many projects under construction in the north.

Acknowledging the efforts of the government in tackling the problem, he appealed that such efforts be further intensified. He said this is a time for all the citizens to rally round the administration to find an enduring solution to the challenge of insurgency.

On the declining score on ‘Ease of Doing Business’, he drew the attention of the Federal Government to the World Bank report on the ease of doing business for this year where it indicated a drop of nine points to 147th position from 138th the country scored last year among 189 economies in the world.

He explained that the areas scored are Starting a Business (-8), Dealing with Construction Permits (-5), Getting Electricity (-1), Registering Property (no change), Getting Credit (-2), Protecting Investors (-1), Paying Taxes (-3), Trading Across Borders (1), Enforcing Contracts (2) and Resolving Insolvency (no change).

He said the report was disheartening, noting that the nation’s scores dropped on six out of the 10 metrics used in the ranking.

He stressed that the declining ease of doing business as indicated in the report agreed with key findings of LCCI’s business environment survey and business confidence index over the last one year.

December 25, 2014
Policy issues affecting businesses, says LCCI

President, Lagos Chamber of Commerce and Industry (LCCI) Alhaji Remi Bello said prevailing macro-economic issues, triggered by the slump in global oil prices, have created challenges for the public and private sectors.

He observed that the pressure on production and operating costs and weak consumer demand were already taking their toll on many businesses with investors’ confidence affected.

Bello advised government and its agencies to avoid actions that would further complicate matters for investors.

The LCCI boss, in a statement, said chamber was compelled to draw attention to some policy and institutional actions that could negate the current efforts to stabilise the economy and preserve jobs.

Some of the challenges, he mentioned, were deliberate and arbitrary revision of the value of cargoes by the Nigeria Customs Service (NCS), driven by the quest to generate more revenue in line with new target.

He said: “We do not believe that this is the best way to improve revenue generation by the NCS. There should be a credible ground to dispute the value of invoice on imports. Most of the prices are global prices and are easily verifiable.

“But in many of the instances, the actions of the NCS have no bearing with these global prices. Regrettably, there is no dependable dispute resolution mechanism in place.

“Invoice values have been arbitrarily hiked by between 50 to 100 per cent. Many importers, including reputable companies, have suffered from this arbitrary revision in value.

“The result is that investors are compelled to pay higher duties and other charges without any justifiable reason.”

He called on the Federal Government to address the issue and to urgently set up an independent dispute resolution mechanism to resolve valuation disputes within three days because of demurrage implications.

He also called attention to the exclusion of certain transactions from the Retail Dutch Auction System (RDAS) window.

December 22, 2014
Our aim is to help new businesses grow

Mr Oluwasunmisola Francis is the President, Africa’s Young Entrepreneurs (AYE), a group committed to empowering young entrepreneurs in Africa . Recently, it made All Progressives’ Congress (APC) National Leader, Asiwaju Bola Tinubu its Grand Patron. Based in South Africa, Francis tells NNEKA NWANERI about AYE and its forthcoming empowerment event.

Why was AYE formed?

It was about my personal business frustration. I began AYE in 2010 to meet with other entrepreneurs with similar business frustrations striving to go into businesses. They may have adequate knowledge about the business but there are no funds available.

Since you began, how has it been?

It’s been great. We started with the grassroot and for two years, we have been building the foundation. In 2012, we implemented all the ideas and we have grown to millions of members. We are fast growing because Africa has a huge number of talents.

What is the aim of your empowerment programme?

We support good business ideas. We are giving them an opportunity to be funded and empowered towards completing their initiatives.

How do you reach intending participants?

We are getting participants through the social media, news and through the website on www.ayeonline.org, where they can apply. That day, we will be flying in experts from Canada, United States and Johannesburg, and we will identify young entrepreneurs doing business.

What is the criteria for selection?

It is just about the idea. No idea is too big or small. The applicants could either be a farmer or one who has built one of the biggest applications online. They might be limited by capital and no idea should be looked down as too small. It should be identified and we are giving aspiring entrepreneurs a good platform to berth that dream.

How do you source your funds?

Our honorary members support us. They are our major funders and they empower these entrepreneurs. Through the International Business Platform (IBP), the participants will be able to showcase their ideas to thousands of investors from across the globe.

What is the Web campaign about?

The WBC-Web Business Campaign is an avenue for entrepreneurs to have a five-minutes video where they can air their ideas on YouTube to others who can buy into their ideas. So, the site is one where investors can meet with entrepreneurs and entrepreneurs meet with investors.

When will the event hold?

The event will hold from November 27-29 at the Lagos Country Club, Ikeja. It’s called the Africa’s Young Entrepreneurs’ Empowerment Nigeria (AYEEN) 2014. Those who want to enrol should be those with businesses that need funding or mentorship. There is a twitter handle to this effect and there is a group they can join on facebook.

What other platforms do you have?

A social business platform, called AYE Connect will be launched in January. When anyone applies for the AYEEN 2014 programme, they will be given a J18 form and they will write the EAR- Estimated Amount Required. There, the prospectors will fill the amount they need to bring their ideas to limelight.

What will the process be?

From what is explained during the audition, the business will work with the said amount and could be reviewed and is subject to change by the organisers. If less, it is reduced and if they need more, more will be added with discretion. The investors will fund the business idea directly. AYE has been able to connect with a lot of business giants across the continent, and has good relationship and given a platform for them to get smart ideas. That is why we are assisting in funding brilliant initiatives.

Is the programme only for Nigerians?

AYE is open to everyone in all African states. This programme is happening in Nigeria for entrepreneurs between the ages of 14-45 years. Subsequent editions will hold in Ghana and Algeria.

How will it benefit Africa?

When we decide to empower entrepreneurs across Africa, we are one way or the other moving Africa forward. If you give a million dollar to people in Kogi State to eat and they are given food and grains, next year, they will call you because the food will finish.

But if such money is given to entrepreneurs in such state, they will not buy the grains, but grow their own grains and will even employ people to grow grains and they will not come to you again. When we empower these entrepreneurs financially or mentally, there is no way Africa is not moving into prosperity.

What is your advice for entrepreneurs?

I advise growing entrepreneurs to start somewhere and begin their initiative instead of waiting for someone to come and fund their businesses. No matter how small the idea is, start somewhere. Give your business a name; register it, identify the brand, use the brand power.

With time, they would have started their business with a few employers and they would have realised that they began without any capital or money in the bank accounts, and from there, maybe, it could be funded by investors.

November 12, 2014
Osunkeye: ‘Odds stacked against Nigerian businesses’

Chief Olusegun Oladipo Osunkeye, a one-time CEO of Nestle Plc is boardroom guru who sits on the board of several blue-chip companies. He is currently President and Chairman, Board of Society of Corporate Governance Nigeria. In this interview with Assistant Editor, Bola Olajuwon, he speaks on the loss of values and ethics as well as offers solutions to challenges facing businesses and how corporate governance, effectiveness and best practices will promote Nigerian businesses. Excerpts:

What do you think is lacking in management of public and private institutions?

Private institutions are big and small – the big multinational companies, the companies in the list of stock exchange and the small institutions. Those are the small and medium enterprises (SMEs). The SMEs should be the bedrock of a nation economically, because we should have thousands and thousands of them, starting with even what I call the corner shop to the artisans and the vocational people. But we don’t have enough of that. We have not enabled and empowered them. For the big institutions, there are hosts of corporate governance in place and they are trying in imbibing that code to put them in good steps. Big companies have facilities and the wherewithal – whether it’s finance or engaging the best hands and best brains. We should think also more of the small private institutions, which we call the SMEs and the one-man businesses that need to be helped. It has been said that we as a country should build institutions and not personalities. By so doing, institutions can then work on themselves irrespective of who happens to be at the head or an officer at that time. We need a lot of work to do there; to build regulatory authorities and other institutions, which regulate our affairs and which should also help and support other private institutions or even public institutions. We need a lot of capacity-building and that can only come from good education.

We need learning and development capacity for people to continue training themselves to improve themselves. Corporate governance, of course, is omnibus; whether it’s for public sector or private sector. I am happy to add, too, that a new code of corporate governance will come out hopefully before the end of the year. It will be for the private and the public sector, so that both in the economic and the socio-economic field, we will be talking from the same page. Corporate governance involves good corporate behaviour and good corporate behaviour stems from good private behaviour. In other words, the standard of performance of the individual makes up for the corporate governance of an institution or a company. So, that code will be able to help us move forward. For instance, the public sector is there to assist the private institutions and private sectors. If we also share from the same code of performance of behaviour, then it will help the private sector as well as the public sector and the nation at large.

How do you see corporate governance in public and private institutions?

Let me go back to education. We have seen deterioration in educational standards over the years; it’s getting worse and therefore you can only think from what you know, if you don’t know, you cannot think too far. Many companies are lamenting that many graduates they engage cannot even write correct English. We also find out that many graduates are even lazy. On ethos of the ethics, they cannot see why they should be punctual; they cannot see why they should work hard; they cannot see why they should take the job as their own and work loyally in a committed way. So, that is even before corporate governance and before you bring them to the mainstream. Now, let me ask: Who are we bringing to the mainstream? What is their character? What are their characteristics? Are they well-prepared? Have they been to school? Unfortunately, many of the schools have deteriorated.

Many companies now have to train graduates for about 18 months before they can be useful for their purpose of employment in the organisation, it wasn’t so before; 25 to 30 years ago, companies were going to universities to interview the students and when they take them from the institutions, they can be up and ready to go. Education should be the basis because that is the actual starting point. On artisans, we don’t have them these days – the bricklayers, the welders, the carpenters. The old ones we have are still surviving, but they are dying. Who will replace them? When you request for their service, the ones you see are not that competent; their work ethics is low. Instead of doing eight hours a day, he will end up doing four to five hours because he gets to work at 10am and wants to close at 3pm. So, we can go back to education and do something now for the future. The present generation has been lost virtually. But it can’t be like this forever. We need qualitative schools and qualitative education; all-round education. We should pay attention to vocational schools because it is from vocational schools and vocational trainings that we have self-employed persons that will establish ultimately the SMEs and some will even metamorphosis into very big organisations. But we have to get it right through qualitative education and qualitative training. About 30 to 40 years ago, there were many technical institutions which produced sound technicians. Are they still doing that today? Do they still have the right equipments? Are the teachers conscious? Are they being paid well, so they can be committed? Because teachers are the gateway, if they are competent and committed, the students will be competent for the future.

What is responsible for the collapse of organisations?

It is poor manpower. In the sense that there are no good hands to help, no work ethics, no loyalty and no commitment. Any of the workers will rather cheat their employers or engage in shady deals. Poor infrastructure is another cause and it’s not helping at all. The roads are bad and vehicles, which should last five years, probably last one year because of poor road network. On power and energy, virtually every business needs consistent and constant electricity to do their work. Electricity is key, even if it’s the work of the hairdresser, the welder or the vulcaniser. Many companies are battling with lack of electricity. They have to now generate their own power, buy a generating set, buy diesel and run their own electricity. Before they start the production of even the first package, the cost of doing business is very high and many companies cannot just survive. Some government policies are favourable while some are not and that is why we have advocacy groups like the Manufacturers Association of Nigeria (MAN), the Lagos Chamber of Commerce and Industry, Nigeria Employers Consultative Association to make government aware of their problems with a view to solve them.

A lot of odds are stacked against businesses and we must try to unravel and help businesses create the enabling environment. Good manpower, good infrastructure, good roads, water and electricity will bring the cost of doing business down. SMEs should be allowed to thrive. They are suffering right now and I hope that the policies that are put in place will be effective to enable them to grow. I have sympathy a lot for SMEs. The difficulties are so much. To surmount this, you need to have stamina and staying power. SMEs find it very difficult to get finance. And fortunately, the government is looking at that through the banks and other institutions. But the cost of accessing finance is also very high. SMEs maybe paying like 20, 22 or 24 per cent and the big companies can pay like 15 per cent. So then, you can see even between the big multinationals that have the class and the financial muscle versus the SMEs, the odds are not the same.

How do you think the government can diversify the economy from oil?

I fully subscribe to the notion that we should diversify our economy. At present, we are a mono-culture economy – we depend largely on oil. There are speculations that oil revenue is about 90 per cent. Oil is a wasting asset; it will not last forever. Even if new reserves and the likes are discovered, it is still a wasting asset. Like the Scandinavian countries, particularly Norway, do, we should have an active sovereign fund. I use the word active, where we are disciplined enough not to touch what we put into the sovereign fund for future generations.

Future generations start from even those who are already born now. They are under the age of 20. At the time that they are 30-45, who will they rely upon? For the past 30 to 40 years, we have been living on this oil; this present generation has been consuming the wasting asset without thinking of the future.

I think what we are spending now should be spent on income yielding assets and resources. For instance, are we putting enough of this oil money into agriculture? As a nation, we are about 170 million people today and maybe in 20 years time, we will be 200 million people. We must eat and food security will become an issue. If we can use oil money to diversify to ensure that we can feed ourselves now and in the future, it will be well spent. Oil money should give us good roads, good education, good hospitals with the equipments and personnel that are well-trained and competent that will take us farther into the future. So that 25 to 30 years from now, if we don’t have oil, we would have enough resources that are self-sustaining like agriculture as well as sovereign wealth fund, which should continually be replenished or augmented so that the future generations can fall back on that; even when you are spending something now for current living and expenditures. Our economy must be diversified away from oil. The oil money is by providence; we have not worked for it. It just came from the soil and we applied technology. But when it dries up, what do we have? So, it is a must that we diversify economy and we have been saying this for the past 20 years. Unfortunately, we don’t seem to have achieved much and that is lamentable.

Is that why the code of corporate governance is being extended into the public sector?

Yes, because corporate governance is at the end of the behaviour. We are talking of behaviour, transparency, honesty, accountability, integrity and if all these are imbibed, you are closer to corporate governance. And if all of us subscribe to that, our nation and companies will be better. If all of us – the private sector and the public sector – have a code of corporate governance, which we all subscribe to, it will be good for us, our economy, social co-existence, efficiency of people, business and investment. Because if I know you imbibe good governance and best practices, where you are coming from, I will trust you more and we can then become partners in business and investment. This is what we are looking at. Therefore, if the public sector has a code of corporate governance, for instance on standard of performance, it will be good for the economy, our cohesion, standards and we will be able to do business together among ourselves as domestic investors and investors abroad would want to come here and put their money. Because they trust that our code of corporate governance, which embodies both the private and public sectors, they can subscribe to it because it’s the same with what they have abroad.

Can you throw more light on the activities of the Corporate Governance Society of Nigeria?

The society was formed about nine years ago by a group of public-minded individuals, of which I’m among, and we invited others to share its vision and that is why it is on good standing today. It is a qualitative society and part of our functions is to have conferences, where we talk about good corporate governance, best practices, bring in best speakers and share experiences. Also, we publish qualitative journals on various aspects of corporate governance. The idea, of course, is to move us forward as a nation. Where more persons are sharing their views on good corporate governance and best practices, it is good for themselves, their businesses and the nation. And now that we are extending it to the public sector, I think it will assure foreign investors and private investors as well within the country that we are all talking from the same page and it will help the economy. So, we train, we do board enhancement programmes, if the society is invited by companies to come and demonstrate or make presentations on the practice of corporate governance, effective and best practices. We do that and we are trying to imbibe others, get companies to know why we are doing this and we have succeeded in the places we went, their performances are better and they are going forward.

November 9, 2014
Clear, present dangers for businesses ahead 2015

As the nation prepares for the next election come 2015, there are fears that the economy may be the worst for it judging by the unimpressive performance of businesses in different sectors thus far, reports Ibrahim Apekhade Yusuf

Less than three months to February 2015, when Nigeria is expected to elect new representatives to respective public offices including presidency national assembly and governorships, the fears out there is that in the runoff to the election proper the telltale signs on the economic landscape is terribly scary.

The timetable for the general elections as released by the Independent National Electoral Commission (INEC) indicates that both the Presidential and National Assembly elections are expected to hold on February 14, 2015, while that of the governorship and State Assembly elections holds February 28, 2015.

For economic pundits who have monitored the way things are going, their verdict outright is that the economy is currently on a tailspin.

Year of uncertainty

Ahead of 2015, some market jitters have now reappeared, with severe implications for the economy. Wale Amoo, an economic analyst captures the scenario perfectly while attempting a prognosis of the clear and present danger signs for the economy.

“As preparations for the 2015 elections reach fever pitch, the unfolding events have implications for Nigeria and businesses operating in the country. There is a threat to government revenue that is heavily reliant on oil, a revenue stream that is now under threat from declining oil prices (now below $90 per barrel), and an outlook suggesting even softer prices in 2015. The fiscal buffers are also currently low, with the 30-day moving average of the reserves at $39bn, and the actual liquid reserves at about $36bn. If we take account of the ‘rented’ funds portion of the reserves, then the figure is even lower,” Amoo said while offering plausible explanation.

Besides, he said, the Bank of International Settlements (BIS) estimates that about $1.4 trillion of the liquidity created during the highly accommodative monetary policy in major advanced economies are invested in emerging and frontier markets’ assets.

“There are, however, indications that global liquidity will be tighter in 2015, which suggests possible reallocation of resources by asset managers and likely repatriation of some of the foreign funds. The decision of foreign asset managers to buy or sell has an impact on small and illiquid markets like Nigeria, a country that has become dependent on the foreign capital flows as a major source of foreign exchange in recent years. All these suggest tough decisions will need to be made by both the fiscal and monetary authorities in the coming year in order to maintain a stable macroeconomic environment.

“Domestic businesses will face a number of risks triggered by the fallout from both the global and domestic environments, and there will be many dimensions to these risks, depending on the nature and level of each organisation’s exposure. One of the key emerging risks is the foreign exchange risk. With the outlook for 2015 suggesting a much weaker naira, corporates need to devise foreign exchange management strategies that mitigate their exposure. In recognition of the risk posed by foreign exchange fluctuations, and increasing foreign exchange exposure by Nigerian banks, the CBN just released a circular limiting banks’ foreign currency borrowings and deployment of such borrowings.”

Amoo further noted that the banking sector will be one of the hardest-hit if the exchange rate risk crystalises as many of them have already deployed tier-2 capital into foreign currency-denominated projects based on limited knowledge of the dynamics of the projects and assumptions that are no longer realistic.

Like Amoo, Mr. Stevenson Atama, a stockbroker has argued that as politicians continue to strategise ahead of the 2015 elections, the nation’s macroeconomic stability is becoming way too fragile.

Damning report

A report by CSL Stockbrokers Limited, a division of First City Monument Bank (FCMB), United Kingdom, tagged ‘Nigeria Year Ahead 2014’, has further indicated that the nation’s ecosystem is in turmoil.

The report expressed concern that as the election time inches close, businesses have continued to be at the receiving end.

According to the report, a year ago, it was clear to most investors that risk factors in Nigeria had fallen, that general macroeconomic stability was improving, and that the flagship reforms like power sector privatisation were gaining traction. In fact, it pointed out that the foundation for a good 2014 had been laid by last year.

“At the beginning of 2014, it is difficult to argue that the outlook is so bright. Macroeconomic stability feels more fragile; elections are coming, meaning that key reforms will likely be on hold; and the investment community that so willingly piled in at the beginning of 2013 can no longer be sold the idea that the market is ‘cheap”, the report said.

Commenting on the possibility of a boost in public spending before elections, the report argued that government resources are actually much more constrained than most observers perceive.

Having almost depleted the Excess Crude Account (ECA) in 2013, the report noted that the federal government and states would be faced with the option of a sharp increase in domestic and international borrowing (with a breach of the Fiscal Responsibility Act) or a reduction in spending.

“Ultimately, we think the latter will prove more palatable,” the report added.

But from a fundamental perspective, the report argued that that reported growth rates in the country were likely to remain strong this year, adding that but with each passing year, the proposed GDP re-basing becomes more important.

“Not only will this (GDP rebasing) give investors a better view of market’s size and composition, but it should lead to a deeper understanding of the drivers of GDP growth. “One continuing area of concern is the strength of consumer demand, which has not recovered to the levels seen in 2010 and 2011, and is unlikely to do so this year,” it added.

Furthermore, it stated that 2015 had the potential to deliver an oil price collapse, which would produce an unexpected global economic stimulus but also some unpleasant geopolitical consequences.

“Consensus estimates suggest a 1.1mbpd increase in global oil demand. However, non-OPEC oil supply is forecast to increase by 1.5mbpd in 2014.

“It is theoretically possible that higher production from Iran (relaxed sanctions), Iraq (steady improvements), Libya (recovery from very low levels) and Nigeria (less theft and vandalism) could add a further 2mmb/d to oil supply during second half 2015.

“A scenario of weak demand growth and excess supply is nothing new. In previous years the oil price had been supported by various supply disruptions both inside and outside OPEC and it may be that 2014 is no different to 2012 and 2013,” it added.

Foreign direct investment is also a problem as the outlook looks not very promising. Unlike South Africa, which has recorded more than $10.3 billion in FDI in the last few years, other African countries like Nigeria and Ghana have recorded steep decline in FDI.

Sub-Saharan Africa’s robust economic growth, which the IMF expects to increase to 6.1 per cent in 2014, from 5.1 per cent, last year, has made it an attractive destination for investors.

South Africa’s performance has lagged the rest of the region, however, with the IMF forecasting growth of 2.8 per cent in the continent’s biggest economy this year, an increase from 1.8 per cent in 2013.

In the area of electricity generation, available records from the National Control Centre and the Transmission Company of Nigeria showed that 2,993.7MW was the quantum of electricity that the system was losing due largely to gas shortage.

Since the handover of the Power Holding Company of Nigeria successor companies to new investors, the generation firms have been complaining of a drop in the supply of gas to fire their plants. The development has led to erratic electricity supply across the country with severe implications for the economy.

The outlook in the energy sub-sector is no less disturbing as major oil marketers had warned that the nation’s fuel stock was drying up with non-approval of 2014 first quarter import allocation and government’s N150 billion subsidy indebtedness to them. However, the northern part of the country has been receiving constant refined petroleum products supply from Soraz refinery, in Niger Republics, through the nation’s land border through trucks from the neigbouring country’s facility.

Still little to cheer about

Although the World Bank Group report released last Wednesday said it has become easier to do business in Nigeria; Nigerians, however, argued that it is nothing to cheer about still.

The report, Doing Business 2015: Going Beyond Efficiency noted that Nigeria and other economies across sub-Saharan Africa have focused on making the business environment on the region more conducive, adding that the region was responsible for the highest number of business regulatory reforms globally in 2013/14.

Nigeria put in place 10 reforms to ensure that the private sector is more involved in the country’s economy.

“Sub-Saharan African economies have come a long way in reducing burdensome business regulations,” said Melissa Johns, Advisor, Global Indicators Group, Development Economics, World Bank Group.

According to Johns, the Group’s data show that the region accounts for the largest number of regulatory reforms making it easier to do business in the past year. 75 of the 230 documented reforms worldwide came from sub-Saharan Africa.

Since 2005, all countries in the region, but one (South Sudan), have improved the business regulatory environment for small and medium-size businesses, with Rwanda implementing the most reforms, followed by Mauritius and Sierra Leone, the Group noted.

Nigeria, Africa’s largest economy ranked 38th among the African countries on the ease of doing business list, and 170th globally, moving up five places from last year’s 175th. The report however finds that Nigeria ranks among the top five economies in sub-Saharan Africa in two areas – the ease of getting credit and the strength of minority investor protections.

November 2, 2014
‘How entrepreneurs can grow their businesses’

All an entrepreneur requires to make a success of his business is the hunger for success. As simple as this statement sounds, the irony, however, is that not many people who venture into startups are motivated enough to make a success out of their business.

This is the major challenge for many startups in sub-Sahara Africa. But in the view of Vusi Thembekwayo, a South African entrepreneur and business speaker, a lot of businesses can record success stories once they are able to apply themselves well.

Thembekwayo popularly referred to as Vusi was in Nigeria recently as the lead resource person at the maiden edition of the annual Stanbic IBTC Business Leadership series. Judging by his antecedent, the packed audience looked forward to Vusi to provide insight and learning at the Stanbic IBTC Business Leadership Series.

Apparently no stranger to such gatherings and certainly not to Stanbic IBTC, his proficiency, oratory, and delivery style, laced with humour kept the audience captive.

Speaking at the Stanbic IBTC Business Leadership series, conceived to provide new and fresh insights, challenge the norm, and help build deeper connections among businesses and business leaders, Vusi shared useful suggestions among entrepreneurs interested in taking their businesses to the next level.

Few weeks ago, on his Instagram page, Vusi posted a signpost with the inscription: “If you’re the smartest person in the room, then you are in the wrong room.”

The wisecrack aptly embodies Vusi and speaks to his thirst for excellence, pursuit of knowledge, and constant self-improvement.

Little wonder at 17, he was considered Africa’s best motivational speaker when he won the Audience Favourite Speaker Prize at the Public Speaking World Championship organised by English Speaking Union. He speaks to over 250,000 people yearly in more than 13 countries.

Vusi who is few years shy away from 30, is rated “one of the best motivational and keynote speakers alive today” by the Who’s Who in Southern Africa, a website dedicated to the leading lights in that region of Africa.

The bubbly fellow is not only a business speaker but also empowers his audience with new knowledge, research findings and tools that they can immediately apply in their businesses or careers to achieve “step-change” results.

The choice of Vusi as a resource person for such a high calibre initiative by one of the respected financial institutions in the country is quite obvious, going by Vusi’s formidable credentials, which read like a page out of Lewis Carroll’s Alice in Wonderland.

Of importance is the fact that Vusi shares some of Stanbic IBTC’s underlying business virtues such as professionalism, hard work, intelligence, integrity, leadership, and confidence. Shell South Africa described him as exhuming “intelligence, trustworthiness, humaneness, courage and sternness.” And “he understands sales, management and leadership,” declared MTN Business.

Vusi studied at Witwatersrand University, South Africa, and has certifications from Wits Business School, where he graduated Cum Laude, Graduate Institute of Business Science (GIB), and INSEAD.

He has worked as a salesperson and later as a business unit executive in some of the well-known organizations in South Africa. As Director of New Markets & Structured Income at Metcash between 2007 and 2010, aged 22, he led the growth of New Markets business from R16 million (about $1.4m) to R298 million (about $26.6m), built the Structured Income business unit from nothing to R187 million (about $16.7m) and achieved the highest EBITDA (earnings before interest, taxation, depreciation and amortization) within the group for two years.

Before then, between 2004 and 2007, he co-founded Uciko Capital & Advisory Ltd where he co-managed the Advisory business unit. He developed a sales system that equipped the sales team with higher closure ratio skills and was able to deliver 82per cent growth in net operating profit less adjusted taxes in 18 months.

He is currently the managing director of MOTIV8, a specialist consulting and services business he set up. Premium business magazine named Vusi “an entrepreneur extraordinaire.”

Thembekwayo holds several board appointments and directorships and influences R4.32 billion (about $384.5m) through these appointments in deals. One of such appointments is as a director in a listed company on the Johannesburg Stock Exchange, the youngest such director in South Africa. He is a member of the National Speakers Association, New York.

Visu says he is “an ordinary guy, with a simple background.” Simple background, yes, but he is certainly not an ordinary guy. There are not very many under-30s who have achieved so much professional success.

He belongs to an exclusive class that boasts of Lucy Baldwin, the 29-year-old managing director of Goldman Sachs, Lucas Duplan, the 22-year-old founder of rave making Clinkle, a mobile payment start-up company, David Karp, 27-year-old founder of Tumblr, the microblogging platform and social networking website, and Uzoamaka Maduka (26) co-founder, The American Reader, a well received literary magazine.

On what drives him, Visu says, “As young people, we need to move beyond being successful; we need to be significant.” Indeed, the very energetic Vusi is constantly in motion in search of the next challenge. This ties in nicely with Stanbic IBTC’s pay-off line ‘Moving Forward.’

The financial institution, leveraging on the rich heritage of the Standard Bank Group, to which it belongs, is always willing to push the envelope in product and service innovation and delivery. CEO of Stanbic IBTC Holdings, Sola David-Borha, talks about an “unrelenting commitment to deliver innovative solutions and very credible performances across all business segments.”

“His humour is the glue that binds some of his most diverse audiences in the world. His motivational speaking style is rich with jokes,” wrote a columnist about his deliveries. In 2013, Vusi delivered 209 presentations across four continents.

Some of his clients include Standard Bank, World Bank, Shell, MTN, Ernst & Young, RBA Homes, Australian Houses of Parliament, British House of Commons, and many others.

A former Australian Prime Minister, John Howard, was so impressed by Vusi’s presentation that he described him as the ‘Rock Star of Public Speaking’, in reference to the huge, almost godlike, devotion to and followership commanded by Rock ‘n Roll stars. And like a Rock star, the speaker from Madiba country leaves his audiences swooning and asking for more.

Feedbacks from clients suggest Vusi is adroit at what he does, which is to motivate people to go beyond “success to significance”.

October 19, 2014
‘How African businesses can create new opportunities’

New opportunities await African businesses if they can align with global business development ideals,the Institute of Business Development (IBD), the leading global professional body for business development professionals, has said. And to underscore its resolve in helping African businesses position themselves to create new opportunities, the institute chose the theme; ‘Business Development in Africa: Emerging Issues for Strategic Actions’ for its ‘2014 Business Development Week’ slated to hold in Lagos, Nigeria, from November 12 to 14.

“The summit will demonstrate in real terms how companies can align their core business with the global business development initiative to bring about poverty alleviation at the Base of the Pyramid. By utilising their resource capabilities, companies can improve the lives of people in our continent through increasing investment, creating jobs, increasing skills, and developing and providing goods, technologies and innovations,” the Registrar/Chief Executive Officer (CEO), IBD, Paul Ikele, said, in a statement made available to The Nation.

Ikele said as companies do so, they will be able to penetrate the marketplace. He added that: “Above and beyond marketplace expansion, aligning your business with the initiative will contribute positively to your company in several ways such as improved supply chain, improved corporate culture, staff retention and morale, increased license to operate, improved investor attractiveness, global corporate reputation, as well as make you become an employer of choice, among others.”

The registrar noted that a commitment to do business with low-income communities provides the greatest contribution to regional prosperity and to the achievement of the Millennium Development Goals (MDGs). He said the Institute chose to engage in the summit becausethe overwhelming characteristic of emerging markets is that they exist in a large majority of low income communities that have come to be defined as the Base of the Pyramid (BoP), which is those living on less than $1500 annually.

“Four billion people make up the BoP and hold $5 trillion in purchasing power. Asia is home to the biggest BoP market with 2.86 billion people on an income of $3.47 trillion. That reflects 82 per cent of the region’s population and 42 per cent of the region’s purchasing power,” he explained.

According to him, “The BoP concept champions new thinking and new ways of doing business in the world’s poor markets. While this high-level aspiration is not necessarily new, the current concept, also known as B24B (business-to-4-billion), was coined by influential business academics.

“Africa is and conducts most of its international trade with emerging markets; this means that African companies should be well placed to broaden operations, supply and procurement to involve the Base of the Pyramid. To successfully engage with the BoP market place, new and innovative strategies will be required in order to respond to the unique obstacles and infrastructural development to position African business group to take a chunk from the global market considering our population.”

Ikele announced that the summit has been endorsed by top business moguls, key government officials and the leading royal fathers in the African sub region. He said it will begin with a keynote address, which will be followed by a series of thought-provoking and engaging sessions covering topical issues on the theme. Each session will be launched with an address by a recognised industry leader, and conclude with a highly stimulating open forum discussion.

He also disclosed that the summit is set to become an annual forum of knowledge sharing, showcasing, networking and initiating successful emerging market business ventures, which have a positive social impact and are aligned with the global business development ideals.

Attendance is open to interested persons in the public and private sectors including business development professionals in Research and Development (R&D), top executives, project managers and all stakeholders in the business sphere.

September 25, 2014
‘Multiple taxation hurting industrialists, businesses’

Industrialists are lamenting that the un-coordinated nature of Nigeria’s tax administration, which results to multiple taxation, is taking a toll on businesses and reducing the global competitiveness of the industrial sector. The industrialist, at a business luncheon organised by Manufacturers Association of Nigeria (MAN) for Chief Executive Officers/Managing Directors of member-companies, called for a more business-friendly tax regime, reports Assistant Editor Chikodi Okereocha.

It was a business luncheon organised by the Manufacturers Association of Nigeria (MAN) exclusively for chief executive officers/managing directors of its member-companies, but the razzmatazz and camaraderie barely covered the worries in the minds of the participants over the state of the industrial sector.

At the luncheon, which held last week at MAN Centre Complex, Ikeja, Lagos, the captains of industry could not hide their displeasure over what they described as Nigeria’s un-coordinated tax system, which, according to them, led leads to what is referred to as multiple taxation.

To the industrialists, multiple taxation, which is a direct result of the nation’s shoddy tax administration, now verges on overkill and is one of the greatest disincentives to business. Specifically, the industrialists consider the tax environment, particularly in Lagos State, as unfriendly and a major factor for the increasing cost of doing business in the country, which in turn reduces the industrial sector’s global competitiveness. For them therefore, the fear of multiple taxation is the beginning of wisdom. This was why the theme of the luncheon ‘Multiple Taxation: A Disincentive to Industrialists” was considered apt and timely.

Chairman, Ikeja branch of MAN, Prince Oba Okojie, set the ball rolling, lamenting that the incidence of multiple taxation and astronomical increase in taxes and levies has led to disruption of businesses in the state. He noted, for instance, that in addition to the taxes paid/payable to state government under Act CAP.T2 Laws of the Federation of Nigeria 2004, a total of 10 other taxes/levies are being collected by the Lagos State Government. Okojie listed some of the taxes that have been giving industrialists sleepless nights to include environmental development levy/charge, environment impact assessment levy/charge, and land use charge.

Others are Lagos State Environmental Protection Agency (LASEPA) levy (laboratory analysis), Ministry of Transport (MOT) road worthiness charge, LASEPA petroleum storage charge for tanks above 10,000 litres, solid waste charge, chemical storage permit, Lagos State Waste Management Authority (LAWMA) levy for waste disposal, and Lagos State fire service charge. Okojie said multiple taxation has added to the growing list of challenges facing industrialists such as insecurity, high lending and exchange rates, high handedness of some regulatory agencies, and multiple inspections/visitations from Ministries, Departments and Agencies (MDAs), amongst others.

The MAN Ikeja branch chairman pointed out that the application of multiple taxes/levies impact negatively on companies. Apart from restricting business expansion and reducing profit, he said the situation creates unemployment, retards economic development and growth, discourages both local and foreign investments, and breed corruption. Besides, multiple taxation, he said, does not allow local products to compete with imported ones. According to him, these factors are responsible for stunting the growth of the Nigerian economy.

He argued that in order to encourage investments within and outside the state,it must create new jobs and engender high economic growth; government must put in place an acceptable tax system, and outlaw the use of unorthodox means of collecting taxes and levies. Also, government, he insisted, must educate the public and facilitate compliance on the published list of approved or authorised taxes and levies in the state, local governments and its MDAs.

To the worries expressed by industrialists over multiple taxation, the Lagos State Government, through itsCommissioner for Economic Planning & Budget, Ben Akabueze,made a number of clarifications. Akabueze, who was guest speaker at the occasion,said because Nigeria is a federation made up of federal, state and local governments, each tier of government is saddled with the responsibility of providing certain services to the citizens and is also granted the funding source through the imposition and administration of assigned taxes and levies.

Akabueze however, said there is need to distinguish between taxes, levies, penalties and user charges. According to him, generally, a tax is a compulsory financial charge or levy imposed by governmental authority, and for which no direct benefit is derived by the taxpayer. On the other hand, payments required for services rendered by the government are basically user charges. “Strictly therefore, multiple taxation can only be said to exist where different tiers of governments are levying taxes on the same activity/income,” he clarified.

As the commissioner explained, modern governance is premised on a social contract that obligates the citizens to pay taxes to the government and in turn mandates government to provide certain goods and services for the well-being of the citizens. While noting that governance of Lagos State should not be on a different basis, he said MAN should assist in sensitising its members towards a tax compliance culture. He also said it is essential for MAN to censure and sanction members when they act in defiance of well established laws.

“Voluntary compliance with tax regulations is the way forward as it is a win-win situation for all parties concerned. To the government, it reduces cost of administration, increases tax revenue, and ensures good governance. On the part of the tax payer, it leads to certainty of tax obligation, prevents disruption of businesses with its attendant legal cost and bad publicity. It therefore, behoves members of MAN and other tax payers in general to ensure, among other things, that taxes deducted are remitted as and when due, and that necessary books of accounts and other documents/information are made available for inspection whenever the need arise,” he stated.

The commissioner added that taxpayers should refer grey areas to the tax authorities for clarification, and where they disagree they should utilise dispute resolution procedures available in the tax laws, as well as keep in focus that payment of tax is obligatory and not optional and that there are sanctions for non compliance with statutory provisions. He also harped on the need to maintain international best practice in tax compliance and build a reservoir of credibility.

Akabueze however, said the state government, on its part, will continue to operate a proactive, responsive, transparent, efficient and effective revenue service. “The Lagos State Government will continue to provide the enabling environment for economic growth and development by passing appropriate legislation, and implementation of citizen-focused policies and programmes,” he said.

While noting that the bulk of these projects/programmes are financed from Internally Generated Revenue (IGR), he promised that government will pursue further reforms of the tax administration system in the state with a view to further simplification of the assessment and payment process, transparency and elimination of power of discretion in the hand of revenue officers, harmonisation of taxes and levies collectible, reduction in the cost of compliance, voluntary compliance and increase in IGR.

The commissioner listed key aspects of the tax reforms in Lagos to include the Lagos revenue administration law, simplification of the tax assessment and payment procedure, tax education and enlightenment, expansion of the Lagos State Internal Revenue Service (LIRS), establishment of presence in all the major markets, and consultations with tax payer groups. Others are: enforcement of statutory provisions, harmonisation of local government levies and rate, consolidation of charges, and the setting up of revenue complaints unit.

President of MAN, Dr. Frank S.U Jacob, expressed confidence that the luncheon would further evolve additional road map germane to the effective implementation of the ongoing tax reform, strengthen the existing cordial public-private sector relationship, and further deepen government efforts geared towards transforming the manufacturing sector.

He said on its part, MAN under his leadership, has unfolded plans aimed at reducing the cost of manufacturing and improving the business environment for manufacturers in the country. “MAN will continue to work towards an environment that will enhance the sustenance of existing manufacturing outfits and attract new investments,” he promised.

The MAN President listed the new Council’s plan for the next four years to include greater interface with government at all levels to enhance MAN’s advocacy platform, creating a more robust data bank, strengthening the economics and research department, and improving the collaboration between MAN and research institutes and tertiary institutions, among others.

He said he has no doubt that the luncheon would promote a business friendly tax environment critical to the competitiveness of Made in Nigeria products and the continued survival of industrialists.

September 11, 2014