Tonya Lawani, the Managing Director and CEO of Seal Group, in this interview with Oreoluwa Oluga has argued that one way to easily do an assessment of the current administration is by looking at certain economic fundamentals such as the liberalisation of the nation’s oil and gas sector from the lens of Dangote Refinery. She addressed this and other sundry issues. Excerpts:
President Bola Tinubu‘s government is two years old. How will you assess his economic policies so far?
I will say it has been sweet and sour, but we can’t deny there has been some improvement in some sectors. Top among his eight-point agenda was economic recovery policy. If you look at them altogether you would see that the policies are well-intentioned, because they speak to the core issues affecting Nigerians. For instance, they are built around the long-term economic strength of the nation which is dependent on how we deploy idle men, material and machines into productive endeavors.
The deregulation of Naira is one, and we have seen the outcome, but when the exchange rate nosedived, the Central Bank of Nigeria (CBN) intervened to avoid a free-fall on the Naira. So, this has led to a measure of reduction in the cost of importation and doing business.
This administration promised to address the issue of food security; poverty eradication; growth, job creation; access to capital; inclusion; rule of law; and fighting corruption. We want to see this in action as the government enters its second year in office.
But we have seen some improvement in the diversification of the economy, and sectors like mining are now receiving attention, just as the deregulation of the oil sector has led to regular fuel supply. I must say the entry of Dangote Refinery to the oil and gas industry has been a game changer. The 600 million barrels of oil per day Dangote Refinery has crashed fuel price to N875 per litre. Besides, the refinery now employs thousands of workers, that is besides the increase of minimum wage to about N75, 000. This has been very remarkable.
Besides, the Federal Government and all states of the federation now have more money to execute developmental projects, as they share at least N1.6 trillion monthly. Look at the Marine and Blue economy as well as the mining sectors, they are receiving attention. I am aware that the mining sector generated about over ₦38 billion in revenue in 2024, and at least two lithium mining companies worth $600 million and $200 million are underway in Kaduna and Nasarawa. All these give some hope. But inflation and unemployment rate are still high.
How will you describe the role of SMEs in Nigeria and what are the challenges?
There is no denying the importance of small and medium scale industries in the Nigeria economy. These industries are everywhere and they serve as engines for job creation, production of goods and providing services and making significant contributions to the nation’s Gross Domestic Product (GDP). Figures from the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) indicate that SMEs contribute approximately 48 per cent to Nigeria’s GDP.
We in the sector absorb a considerable portion of the labor force, especially the youths. I can tell you the number of staff in our Lagos and Benin offices. These SMEs come with entrepreneurial skills, innovation, employment and take a lot of people off the labour market. SMEs utilize advanced local technology, diversify output, foster home-grown entrepreneurship, and integrate with large-scale industries.
We also stimulate competition for prices, products, design and efficiency and one fundamental effect is that in local communities, we foster economic resilience and stability while also contributing to reduction in crime rate.
At the global level, over 400 million small and medium businesses operate all over the world, providing employment for about 84 per cent of the global work population. The pulling factor is that they are easy to set up, according to the needs of the community, requiring minimal funds or capital.
What are the challenges of sustaining MSME in Nigeria?
The challenges range from limited access to finance, infrastructure deficit, poor power supply, cost of doing business and all manners of levies and taxes. For instance, it is extremely difficult for MSMEs to access loans for the traditional banks, because of the combined effects of the interest rate and collateral. Interest rate hovers between 11 and 29 per cent. The banks look at such things as credit worthiness, loan amount, feasibility of business and reliability of repayment plans.
Look at power supply, it is near zero, and irrespective of the bands that the DISCOs fix your company, the tariff is high. Note too, that the cost of diesel which we used to power our machines in the factories. It is hitting the ceiling, but for the entry of Dangote Refinery, and this has to be factored into cost of production, including labour cost, before you talk about interest.
To this end, the 30 per cent reduction in the cost of diesel is a significant reduction and we have been able to buy at N1,000 per litre, as announced by the Dangote group was a great relief. And the interesting thing is that the refinery has the product in substantial quantities and its products are being evacuated both by sea and road. Ships were said to be lining up one after another to load diesel and aviation jet fuel.
Also of interest are the local government taxes. They roll out up to nine and our delivery vehicles must obtain the cards. In most cases, the local governments even contract this to contractors and receive their money in advance, compelling the contractors to adopt all manners of strategies to recoup their money.
Isn’t that not why Nigerians should support the Tinubu’s Tax Reforms, which would consolidate all the taxes?
That is the point I am making. We are told that when passed into law, this multiplicity of taxes which inhibits small business will be eliminated. You need to see how local governments issue demand notices and lock up shops in some parts of the country. Some of the councils and their agents even hire thugs to force payment instead of resorting to law courts.
For instance, in our line of business, we operate various companies. Under The Quick Print Shop (QPS), Our GCEI Initiative will cut across Mindset-Attitudinal Training, Entrepreneurial Skills and Digital Skills Training. Some core modules will include Visual Identity Graphic Design, Marketing and Advertising, User Interface (UI) Design, Motion Graphic Design, Art and Illustration, Publication and Packaging Graphic Design, and Printing.
We will also have classes focused on – Email Marketing, Content Marketing, Social Media Marketing (Paid Advertising), Social Media Marketing (Organic Traffic), Introduction to Digital Marketing, Pay Per Click Search, Coding and lots more. But the challenge has been huge.
You are a member of the Institute of Directors. How do you see the investment climate in the country and what should be done to make the country investment-friendly?
Government should create and sustain an enabling environment. This is not about lip-service, but action. Security issues should be addressed, because it is the pivot around which other activities revolve. The capacity of our industries is not in doubt; besides, investors see Nigeria as a virile market, but we need to address the issue of security, infrastructures and a more reliable judicial system.
For instance, a recent report by the Manufacturers Association of Nigeria (MAN) stated that manufacturing production value lost about N720 billion in 2022, from N7.39 trillion in 2021 to N6.67 trillion in 2022. MAN blamed the harsh operating environment, record inflation, high interest rates, high energy costs, forex illiquidity, multiple taxation, and raw materials scarcity. This is very disturbing.
To what extent has the government been encouraging MSMEs?
SMEDAN (Small and Medium Enterprises Development Agency of Nigeria) provides support in various ways. It assists in the areas of skill development, capacity building, entrepreneurship training, policy advocacy, access to loan and business support partnership, ultimately fostering the growth and development of MSMEs across Nigeria.
Government also helps in through the Bank of Industry which examines business feasibility and provides capital for the growth of such businesses. Many of us have benefitted from its programmes, BOI facilitates the transformation of the Nigerian industrial sector by providing financial and advisory support to establish, expand, diversify, rehabilitate, and modernize enterprises, particularly SMEs.
When I mentioned financial support, I mean that BOI provides financial assistance to enterprises, including loans and other financing options, to help them establish, expand, diversify, rehabilitate, and modernise their operations. It provides business advisory services, targeting key sectors by supporting key sectors that are vital for Nigeria’s economic growth and development, including agriculture (agro-processing and food processing), solid minerals, creative industries, oil and gas, healthcare, technology, and renewable energy. Promoting Local Production and Value Creation, Driving Industrialisation and Economic Growth and assists in the area of business sustainability.
