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Tag: Ease of Doing Business

  • Chamber seeks laws on Ease of Doing Business

    The Onitsha Chambers of Commerce, Industry Mines and Agriculture (ONCIMMA) has called on the Ninth Senate to make laws that would enhance the Ease of Doing Business (EoDB) in Nigeria for fast economic growth.

    The Chairman of ONCIMMA, Mr. Don Ebubeogu, made the call on Tuesday in Awka, the Anambra State capital.

    The Ninth Senate was inaugurated on Tuesday with Senators Ahmed Lawan and Ovie Omo-Agege as President and Deputy President.

    Ebubeogu said though the Federal Government, through the Vice-President, Prof. Yemi Osinbajo, has been working to evolve better business environment, there was need to make pieces of legislation for its sustainability.

    The chamber’s chairman identified poor maritime, multiple tax, internal custom checks and inefficient transport system as some of the challenges.

    “Vice-President Yemi Osinbajo has been championing the EoDB mantra, but it lacks sustainability and bite, so, I call on the Senate to look at those proposals and make laws to back them up,” he said.

    He called for the development of the nation’s ports across the country to reduce congestion in Lagos Ports and boost the import/exports sector.

    The industrialist said rather than develop more ports in Lagos, the Federal Government should work on Onne, Calabar and Warri ports to ease movement of goods in and out of the country as well as circulation within the country.

    Ebubeogu said the high landing cost of goods in Lagos ports and demurrage occasioned by delay in clearing and evacuation was contributing hugely to inflation.

    According to him, the situation in Lagos ports has become unattractive that importers now prefer Republic of Benin and other neighbouring countries’ ports because of their cost effectiveness.

    The ONCIMMA chief said Customs officials should be restricted at the borders as their internal operations impede the flow and of transportation of goods.

    “Building another port in Lagos is just postponing the evil day. The concentration of ports in Lagos is simply killing our nation’s economy. The government should just make sincere efforts to develop the ports in Onne, Uyo, Calabar, Warri and others to decentralise economic activities.

    “The implication is that the cost of these inconvenience is transferred to end users and that is higher cost of goods,” he said.

    The ONCIMMA chairman said there must be a legal template for trade and commerce and economic transformation of the country.

     

  • Priming Apapa ports for ease of doing business

    THE economy relies heavily on trade and over 70 per cent of external trade is routed through the Apapa harbour. The poor state of access roads to the harbour, home to the two biggest seaports in the country, seems to have defied solution. It has paralysed socio-economic life in Apapa and made the evacuation of cargoes from the Lagos and Tin Can Island a nightmare.

    Every open space within and around the port has turned into a trailer park, frustrating operations at the two Lagos ports and its environs. Freight business is suffering because of huge evacuation costs, as trucks spend weeks while waiting to gain access into the port terminal.

     Stakeholders’ frustration

    To demonstrate their anger and frustration, some residents of Apapa last November gave the Federal and Lagos State governments, “a 21-day ultimatum to clear the armada of trucks that have, for years, made life a living hell for them and the Nigerian economy at large.”

    The Nation had reported last Friday about the peaceful protest staged by frustrated residents of Apapa. The peaceful protesters, led by their chairman, Brig-Gen Sola Vaughan, had handed over their protest letter to the Divisional Police Officer of Area B Command of the Nigeria Police for onward delivery to President Muhammadu Buhari. The residents had threatened to sue the NPA and all the shipping companies operating in the area if steps were not taken to ameliorate their situation.

    In  a similar vein, the Ladipo Market Traders Association raised concerns “at the over 200 percent hike in haulage cost, resulting from the persistent gridlock experienced on the Apapa-Oshodi Expressway and other access routes linking the Lagos ports”. The traders lamented that the increase in haulage cost was also responsible for the hike in price of goods in the market.

     New initiatives

    To arrest the impending port congestion, the Managing Director of Nigerian Ports Authority (NPA), Hadiza Bala-Usman, met with the key stakeholders last month. The meeting, which looked beyond the previous interventions that usually focused mainly on off dock situational challenges, resolved to address the connectivity challenges associated with doing business at the port.

    The NPA, it was gathered, subsequently rolled out a regime of palliatives to reduce the financial burden of shippers transacting business in the port, facilitate quick evacuation of cargoes and encourage faster return of empty containers to the port, among other benefits. For instance, effective December 18, 2018, over the next four months, the rent-free period for cargoes stowed at the terminals which used to be three free days was increased to 21 free days. The demurrage free period on return of empty containers was increased from the current five days to 15 days as well.

    Yet, to further ameliorate the hardship faced by cargo owners, shipping companies were directed to immediately deploy barges to evacuate empty containers from the port and take steps to clear the backlog of empty containers under their purview. To create more free space for cargoes arriving the country, the authority called on the Nigeria Customs Service (NCS) to immediately commence the process of auctioning overtime cargoes littering the port. These auctions should be carried out on the spot at port locations and every buyer would be given a stipulated short period to evacuate the cargoes out of the ports after which such cargoes will be re-auctioned. In addition, terminal operators were advised to negotiate and grant waivers to consignees to facilitate the evacuation of these cargoes, and mitigate against huge financial loss for the terminal operator as well as the consignee.

     Holding Bays

    The NPA, The Nation learnt, discovered that many shipping companies do not operate holding bays, contrary to the terms of their licence. Therefore, early in the year, the authority began to enforce the delivery of all empty containers at designated shipping companies holding bays, to manage the traffic in and around the Lagos ports, with a promise to come hard on truck drivers who failed to comply with the February 2018 Notice issued against bringing of empty containers directly to the ports.

    Under this arrangement, the shipping companies must stop   using their terminals in the port for storing empty containers and no truck driver or owner must be allowed by any official of NPA and terminal operators to bring empty containers into the port after delivering goods to importers. The terminal operators are also to declare the number of empty containers in their terminals periodically. Over 40 per cent of the space at the Lagos Port Complex (LPC) and the Tin-Can Island Port is occupied by empty containers.

    End time for gridlock?

    While the new regime of palliatives are set for a review by the end of March 2019,  Bala-Usman has assured that other measures to put an end to the hardship at the Lagos ports would be intensified.

    “These long term solutions include the reconstruction of the roads leading to the Apapa and Tin Can Island ports, the completion of the trailer park near Tin Can Island Port, and the roll-out of the truck call up system that would sanitise the flow of traffic within Apapa.

    The NPA’s goal is to establish a seamless intermodal system that allows cargoes to be evacuated from the nation’s port by road, rail and inland waterways, which would ultimately eliminate delays and make Nigerian ports globally competitive,” she explained.

  • Ease of doing business: More hurdles to cross

    Nigeria moved from 169 to 145 in the World Bank’s 2018 Ease of Doing Business ranking. This is a shot in the arm for the Federal Government’s reform of the business environment to attract investments and diversify the economy. But, the country’s drop from third to 14 the in Forbes 2019 Ease of Doing Business ranking is seen by real sector operators as a setback. They, however, argue that this could be mitigated by sound, result-oriented business regulations, innovative implementation of reforms and supportive infrastructure in 2019. Assistant Editor CHIKODI OKEREOCHA reports.

    The report was unsettling, both for the Federal Government and private sector operators. The 2019 Forbes Ease of Doing Business (EoDB) ranking, which graded 161 countries, dropped Nigeria from third to 14th position, was seen by analysts as a major setback for Nigeria’s push to create and sustain an enabling business environment for private sector operators.

    Nigeria, had on the strength of the reforms by the Presidential Enabling Business Environment Council (PEBEC) and the various Executive Orders, made some gains, rising by 24 places from 169 to 145 in the World Bank’s 2018 Ease of Doing Business Index. It was Nigeria’s highest leap in the history of the rankings, which provide a global snapshot of a country’s business environment in comparison to its peers.

    The PEBEC, the administration’s flagship initiative to reform the business environment, attract investment and diversify the economy, was inaugurated in July 2016 and chaired by Vice President Yomi Osibanjo. The Council’s reforms as well as the signing of the Executive Order on ease of doing business in 2017 are believed to have earned Nigeria the rise by 24 places on the ease of doing business ladder.

    Expectedly, the feat gladdened the hearts of private sector operators. Many of them believe that Nigeria’s lack of an investment-friendly business environment is largely responsible for the failure to leverage her enormous human and natural resources to boost productivity and global competitiveness. This was why they supported the Federal Government’s ambitious target of moving 45 steps upwards in the next two years.

    In fact, Nigeria’s ultimate goal was to hit the top 100 by next year. However, while the government and the private sector were still savouring the gains of the ease of doing business reforms and strategising on how to make them sustainable, the country’s drop in the 2019 Forbes ease of doing business ranking was a major setback.

    The report was an indication that government still has more hurdles to cross in improving the business environment and enhancing the productivity of businesses in 2019. Forbes previous ranking listed Nigeria as the 115th best country to do business in the world and third in Africa out of 153 countries that were surveyed globally in September 2018.

    But the business magazine’s latest 2019 listing, which was released on December 19, 2018, revealed that while Nigeria’s ranking improved on the global space, it dropped 11 spots in Africa on “hospitable to capital investment.”

    Sadly, South Africa claimed the number one spot in the listing, while Nigeria was rated 14th in Africa. This is despite Nigeria’s 203 million population, 0.8 per cent Gross Domestic Product (GDP) growth and GDP per capital of $2,000.

    Botswana came 83rd on the list globally; Rwanda, 90th; Kenya, 93rd; Ghana, 94th; Egypt, 95th; Namibia, 96th. While Senegal was rated 100th, Zambia was 103rd and Cape Verde, 104th before Nigeria was rated 110th globally.

    Outside the continent, United Kingdom was rated first; Swede, second; Hong Kong, third, and The Netherlands was rated fourth. While New Zealand took the fifth position, Canada was 6th. The United States was rated 17th on the Forbes list.

    Explaining how it arrived at the rating, Forbes said: “We gauged the best countries for business by rating nations on 15 factors, including property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape and investor protection.

    “Other matrixes included were workforce, infrastructure, market size, quality of life and risk. Each category was weighted. The data is based on published reports from Freedom House, Heritage Foundation, Property Rights Alliance, United Nations, Transparency International, World Bank Group, Marsh and McLennan and World Economic Forum.”

    Incidentally, most of the criteria Forbes used in its latest assessment, particularly as the relate to Nigeria, such as infrastructure, taxes, corruption, red tape and investor protection were the same issues that form the basis of the private sector’s consistent agitation for an improved business environment.

    For instance, the Lagos Chamber of Commerce and Industry (LCCI) re-echoed this sentiment when it said in its review of the economy in 2018 that business environment issues are as critical to the progress of the economy as the macro-economic conditions. It listed the issues as infrastructure, tax, regulatory environment, institutional issues, security situation, policy consistency etc.

    LCCI Director-General, Mr. Muda Yusuf, said some of the  major business environment issues that impacted on businesses in 2018 included but not limited to  the 2018 World Bank Ease of Doing Business report that ranked Nigeria 146 out of 190 countries.  He said this showed that the country took a step backwards from the 145th position it ranked in 2017.

    Yusuf, who noted that the ranking took into account trading regulations, property rights, contract enforcement, investment laws and availability of credit, said the government still has the enormous task of ensuring much better performance to enhance the productivity of businesses in the year.

    While acknowledging the present administration’s efforts through the PEBEC and series of Presidential Executive Orders targeted at improving the business environment, the LCCI chief said: “The setback calls for sound and result-oriented business regulations and innovative implementation in 2019.”

     

    Power supply is pain in the neck

    While noting the government’s efforts in addressing the perennial power supply shortage and the deeper commitment to alternative sources of power, including off-grid initiatives, Yusuf was emphatic that the provision of power remained at the heart of the ease of doing business in Nigeria.

    Hear him: The power situation continues to pose severe challenges to private sector operators, impacting adversely on productivity. Throughout the outgoing year, we received complaints across sectors about high energy costs, especially high expenditure on diesel, higher cost of and scarcity of gas, and payment demand by electricity distribution companies (Discos) for power not supplied.”

    Yusuf further stated that these continued to take their toll on the bottom line of investors and Small and Medium Enterprises (SMEs). He said some real sector companies reported that they spend as much as 20-25 per cent of their total operating cost on provision of alternative power supply and payment to Discos.

    Nigeria’s installed power generation capacity is put at 12,000Megawatts (MW). But as at December 26, 2018, the actual output stood at over 5,207.57MW, according to the Executive Secretary, Association of Power Generation Companies (APGC), Dr. Joy Ogaji. This means that the power supply still falls short of the megawatts required to power the economy.

    This, according to the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), is worrisome. Its National President, IyalodeAlaba Lawson, therefore, said the Federal Government must redouble its efforts in improving infrastructure, such as power, roads and rails, as well as its efforts at improving the ease of doing business.

    Lawson, who spoke at NACCIMA’s end of year briefing, in Lagos, said these are necessary to bring about the much-needed positive change in the manufacturing sector, as Nigeria was still a net importer in manufactured goods. She insisted that power supply was crucial to the sustained growth of the manufacturing sector.

    The NACCIMA chief, who noted that a lot of work was required to improve infrastructure, particularly power supply, however, commended government’s efforts to improve power supply by expanding the energy mix in Nigeria beyond hydro and thermal sources and the expansion of renewable energy including solar and off-grid sources.

    Lawson also commended the activities of the PEBEC and initiatives such as the Economic Recovery and Growth Plan (ERGP) Focus Labs, SME Clinics and the various Executive Orders. She pledged NACCIMA’s continued support of the government and all stakeholders working to create and sustain an enabling business environment for the real sector against the background of the ERGP.

    The ERGP (2017-2020) is a medium-term structural reform to diversify the economy, including expanding power sector infrastructure. It was drawn based on the assumption that electricity supply would continue to grow, hitting 10,000MW by 2020.

    However, barely a year to the set target, the power output still stands at about 5,207.57MW. This means that the realisation of the Federal Government’s plans hangs in the balance. It also authenticates Forbes unflattering ranking of Nigeria in its latest ease of doing business.

    More importantly, the situation, by extension, means that hopes of a bigger and more productive private sector powered by an improved business environment may take longer time to realise, unless government and all stakeholders put their hands in the plough particularly in the area of implementation of policies on ease of doing business.

    The fact that lack of steady and reliable electricity is not the only factor responsible for Nigeria’s drop on the ease of doing business ladder makes the need for effective policy implementation and collaboration more compelling.

    For instance, the unpredictability or lack of continuity of government policies, freeze in the lending activities of banks, lack of maintenance culture and macro-economic instability, among others, are said to be making the business environment unfriendly for local and foreign businesses.

    Many private sector operators have been agonizing over the high inflation, interest and exchange rates. Many of them are unable to sustain or expand production at the prevailing interest rate of between 20 -27 per cent, depending on the borrower’s perceived risk level.

    According to experts, the major source of capital for businesses in Nigeria still remains bank loans, which come at high interest rates. Inflation and exchange rate have also been trending upwards to the chagrin of real sector operators, especially the Medium, Small and Micro Enterprises (MSMEs).

     

    Multiple taxation also

    To usher in a business-friendly tax regime, MAN has called for the commencement of the implementation of the harmonised taxes and levies and to allow the Joint Tax Board (JTB) monitor and enforce compliance by states and local governments.

    The association also counselled the government to be more interested in result-oriented spending with frugality, be more transparent and accountable to assuage the psychology of taxpayers for improved tax compliance.

    MAN urged the government to expand the tax net to capture the non-tax-paying firms, particularly those operating in the informal sector and not increase the tax burden on the already tax compliant businesses.

    It also urged the government to re-classify the manufacturing sector into strategic gas users from the current commercial gas user’s classification.

    The association urged the Federal Government to continue to entrench better foreign exchange rate management while allocation should tilt more to the industrial sector, including the Small and Medium Enterprises (SMEs).

    It also urged the government to fast-track the development of key selected mineral resources through backward integration, especially those with high inter-industry linkages.

    “The government should continue to support the resource-based industrialisation and backward integration in the country through appropriate incentives and funding support to investors,” it said.

  • 2019: Between ease of doing business and ease of doing fraud

    ELECTION campaign begins tomorrow, November 18, ninety days to the vote, and something of great interest to citizens and international observers alike is what kind of contest to expect. There is no gainsaying that this is an immensely important election. Apart from the fact of the stark choice of either going forward or backwards; choice between light and darkness, a large percentage of the country’s traditional and political elite is up in arms against the sitting Buhari administration, which they accuse of disrupting their lifestyle, itself characterised by licentiousness especially when it comes to dealing with the commonwealth. This opposition, it must be said, has liquidity of the type that government itself does not have.

    The US Dollar rain by a major opposition party at their convention in Port Harcourt is a dire warning in this direction. This contrasts sharply with the high level of discipline put in place through the Treasury Single Account, TSA being implemented by the Buhari government. It is a matter for great concern that the leading opposition parties have resolved to undertake a campaign clearly aimed at aggravating differences between Nigerians on the basis of especially religion, region and tribe. A document in circulation, from the resolutions of a retreat in a foreign country by one of the parties makes no pretences about their plan to cause tension between various communities.

    They have dramatically begun actions to destroy the integrity of the election process. Even before the gates open for the race to begin, this country is already witness to a unique type of campaign based on unverified allegation or distortion propagated in the two chambers of the National Assembly which are strangely led by opposition candidates in a minority party in the coming election. They have lately launched scathing attacks on government concerning payment for fuel subsidy and the emergency feeding program of the displaced communities in the Northeast. There are vivid reports of unscrupulous opposition politicians who have finished the lives of our youths by handing guns to them, turning them into rag-tag guerrillas confronting our security agencies in Abuja and states in the north central zone.

    For the All Progressives Congress, APC administration at the center, initial moves towards 2019 have been about the effort to publicise the administration’s achievements while at the same time dispelling negative propaganda by the opposition. While it is clear that the opposition is unprepared for a contest based on policies programs, and past records of work, they are bent on distracting the attention of voters by appealing to sectional feelings and throwing voters into confusion. Churches and Mosques and other places of worship are being recruited for election propaganda. For us in the APC, the task before us as we embark on the campaign is to make plain and clear how the country progressed over the last three years and I dare say that there is so much to talk about. We are proud of our achievements.

    But we must first of all make the voter to illustrate where we are coming from because without doing that, it is hard for many to appreciate the enormous strides the nation has made under the present dispensation. For instance, the Minister of Power, Works and Housing, Babatunde Raji Fashola, at a press conference early this week announced that this administration has achieved the remarkable feat of doubting the available electric power in the county, from less than 4,000 megawatts to now 8,000 mw. This wattage is the available power that is generated and transmitted. Distribution, which is now in private hands, has improved but at 5,000 mw, it still has a lot of catching up to do.

    If we had continued with the pace, corruption and ineptitude that characterized the war against Boko Haram by 2015, it would have taken us decades to eliminate the terrorists’ hold on Nigerian territory and have them confined to a little corner in the country, by the banks of the Lake Chad. Agriculture was abandoned in that region and only a few could grow their own food in years. The Boko Haram had a state within the Nigerian State with a defined territory, a flag, a system of administration complete with taxation and a court system. There was a time that in the northeast, two million people were displaced. Now, the communities are returning as government, with local and international support put back damaged infrastructure.

    The Buhari administration has shown the ability to take hard decisions, in the nation’s interest as has been seen in dealing with the economy. This administration is doing something that no government had done since independence in 1960, which is moving the economy in a completely new direction. Government has done so much, especially in agriculture, solid minerals and manufacturing, preparing the country for the greatness that we all desire.

    It would amount to a major reversal, if not self-immolation for the voters to take steps that return us to the discredited past. Take another example, the reform of the trade and investment sector by which the administration has been streamlining systems, ensuring transparency and fewer rules. That’s what the ease of doing business is all about, measures that have brought a lot of international compliment to Nigeria and for which there is a Presidential Enabling Business Council. As a result of this work, Nigeria moved 24 places on the World Bank ease of doing business rankings, and earned a place on the list of 10 most improved economies in 2017.

    A prospective investor denied visa to come by a corrupt consular office in a Nigerian mission can today hop into a plane and obtain his/her visa on arrival. New businesses which took years upon years to register now have a maximum of a 48-hour waiting period to be certified. In the words of President Muhammadu Buhari, “Nigeria is taking steps towards creating a more business friendly environment for foreign investors and visiting business people. Our Visa on Arrival policy as one of the components of our ease of doing business in Nigeria policy is working.

    “Corruption has been identified as an impediment to sound business practices. The fight against corruption, the ongoing exercise to rid the country of the remnants of the insurgency, the continuing importance we attach to transparency in Governance. These are just some of the major policy initiatives, all of which need to be analysed and reported on to the global audience by the media both at home and internationally.” For decades, demand for fertilizer had never been sufficiently met until this administration came. The foreign exchange part of it, USD 200 million is eliminated; subsidies that run up to N60 billion annually have been stopped and on top of that, prices per bag have crashed from N14,000, to government approved price of N5,500. From farmers to pundits and experts in the agric sectors, (SECTOR) no one ever imagined that Nigeria could stop rice imports and achieve near selfsufficiency in three years, but here we are: 90-95 percent of rice imports have ceased.

    The President is carrying out difficult reforms for the future growth of the country, such as the implementation of the ease of doing business, the Treasury Single Account, TSA, the whistleblower process, and hundreds of others, including the massive investment in rail, roads, power and airports. If such reforms had happened in 16 years of the PDP, this country would not have been lowly ranked among nations. In the middle of the process of changing the country from its unwanted standing to a more desirable one, that’s not the time to change a president.

    In Nigeria as in many other democracies, campaign and elections are addictions. They come with attitudes and responses, those that wanted and those that are unwanted. There are worrying excesses that attend our campaigns, and these are already on display. These, if not managed using voluntary agreement or a code of conduct on rules of behaviour for the political parties and their supporters, can turn things in the wrong direction. When they enter into those agreements voluntarily, parties are more likely to feel bound by commitments into which they have freely entered. For a conducive atmosphere to prevail in making wise and informed choices, parties have a duty to sit around the table to decide. More than all the others, the governing APC has a national call to lead this coalition before the revisionists stampede the unsuspecting citizens into substituting the ease of doing business with the ease of doing fraud. •Garba Shehu is SSAP Media and Publicity to the President

  • One year of Executive Orders: So far, so…

    It is exactly one year after the signing of the Executive Orders on Ease of Doing Business by the then Acting President Yemi Osinbajo. Ibrahim Apekhade Yusuf in this report attempts a review of the high and low points of the much hyped initiative.

    One major activity of the then Acting President Yemi Osinbajo which he performed with aplomb and which naturally became an instant hit, especially with the media was the signing of three executive orders with the potential to significantly change some of the ways government business and operations are conducted in the country.  That was May last year.  However, the received wisdom out there is that one year down the line; the chickens may have literally come to roost.

    A recap of the Executive Orders

    The three orders signed by Mr. Osinbajo provide specific instructions on a number of policy issues affecting the ease of doing business in the country, support for local content in public procurement by the federal government, and timely submission of annual budgetary estimates by all government agencies, including companies owned by the federal government.

    Specifically, on the ease of doing business, the federal government mandated all ministries, agencies and departments to henceforth publish a complete list of all requirements or conditions for obtaining products and services within their scope of their responsibility.

    These, it explained, will include permits, licenses, waivers, tax-related processes, filings and approvals.

    “The list shall include all fees and timelines required for the processing of applications for the products and services; and be conspicuously pasted on the premises of the relevant MDA and published on its website within 21 days from the date of issuance of this order,” the statement said.

    It put the responsibility of verification of the list on the heads of the ministries and departments.

    Tourist and business entry visas to Nigeria, the federal government directed will also, henceforth, be issued or rejected with reason by the Consular Office of Nigerian Embassies and High Commissions within 48 hours of receipt of valid application.

    The federal government also ordered that all ministries, departments and agencies at airports must, within 30 days, merge their respective departure and arrival interfaces into a single customer interface, while all agencies physically present at the ports must, within 60 days, merge their operations into one single interface station in one location in the port. The directive gave specifics of the roles to be performed by the interface station.

    It also ordered the resumption of 24-hour operations at the Apapa Port within 30 days just as the federal government directed the Registrar-General of the Corporate Affairs Commission (CAC) to, within 14 days, ensure that all registration processes at the CAC are fully automated through the CAC website from the start of an application process to completion, including ensuring the availability of an online payment platform.

    Reality check

    However when our correspondent felt the pulse of stakeholders operating within the different business spectrum to give their scorecard thus far using the policy matrixes of government, their answers which rang loud and clear was that the federal government was yet to achieve the desired ideal.

    Speaking with a cross-section of experts, they expressed mixed feelings over the numerous policy pronouncement of the federal government in the last 12 months, especially as it concerns ease of doing business.

    In the view of Chief Cyprian Arinze, a haulage contractor, the Executive Order if anything amount to putting the horse before the cart. “If the government takes care of the roads, we can achieve over 95% Ease of Doing Business. Without this, we will just be going round and round the circles.”

    Echoing similar sentiments, Chief Remi Ogungbemi, Chairman, Association of Maritime Truck Owners (AMATO) argued matter-of-factly that the Executive Order is far from a reality as basic infrastructure aimed at turning things around at the ports are still missing.

    To achieve the much hyped executive orders mandate, he would rather a deliberate measure to build truck terminals. “I want to use this avenue to appeal to the concerned authorities to see what they can do because things are in terribly bad shape right now.”

    In his assertion, Austin Okere, the Founder and Entrepreneur-in-Residence at the Ausso Leadership Academy, an ideas incubation company express worry that the Economic Recovery Growth Plan laudable as it is already suffering from inertia associated with government policies.

    “I think the problem we have is that we run election economics. Great men think about the next generation but politicians think about the next election. And insofar as the economy is about amassing enough money  to manoeuvre or win the elections by all means, then another four years, we go back to the same square, then if a new government comes in, it starts exposing saying oh, look at the money that was amassed and they say it was for election and say, ok. The point is insofar as we continue to run election economics; we’ll be where we are. In an election year, a lot of time and resources are wasted. So we only have two productive years and if you’re not lucky, the new government comes and rollback everything that has been achieved, it becomes a problem.”

    Government defence

    Expectedly, the government on its part seems to be convinced that it has performed commendably well thus far.

    Uche Ejesieme Public Relations Officer, Tincan Island Customs Command, Lagos, in an interview with our correspondent recently while speaking on the level of compliance with the Executive Orders at the Tincan Customs Command, said, “Customs has been operating for 24 hours and this is because we believe that at any point in time we need to ensure that officers are on ground to attend to officials issues. So even before this Executive Order came to force, the Nigerian customs service has been operating 24 hours. So what we’re trying to do now is just to ensure a kind of a renewed approach based on the concept, letters and spirit of the Executive Order. And as a way of complementing the Executive Order, the Controller Tincan Island Ports, Yusuf Bashar, has also built a training facility that has 30 connected workstations where we conduct trainings for customs officers across the ranks and for stakeholders like maritime operators and even the media.”

    Expatiating, the Customs image-maker said the Command has complied very religiously with the spirit and letter of the Executive Order on Ease of Doing Business. “If you look at the signage on my door you’ll see Help Desk and the same thing has been syndicated in all the places round the port. This is just to create the necessary awareness that at any point of your clearing process, if you anticipate any challenge or you face any problem, once you come to the Help Desk, we’ll call the appropriate officer and make sure that they do the needful particularly when we see that you’ve a very clear case. But if it’s a case of noncompliance with the fiscal policies in terms of trade, it means that we’ve a responsibility to take a second look at that because Ease of Doing Business does not means that we’ll just close our eyes and everything will just go because it takes two to tango. If the operatives are compliant with the fiscal policies, making honest declaration, it’ll be very easy for Ease of Doing Business to thrive.”

    In a response to enquiries from our correspondent, Dr. Jumoke Oduwole, Senior Special Assistant to President on Trade and Investment as well as the Secretary of the Presidential Enabling Business Environment Council /Enabling Business Environment, said the federal government has since developed a national action plan which details the deliverables as well as template to tract development in key sectors of the economy. The report, she said is to be formally released to the public by the end of the month.

    However, David Uzosike, the Reform Lead, Presidential Enabling Business Environment Council/Enabling Business Environment Secretariat with the mandate to lead, coordinate, research and identify the constraints to ease of doing business in Nigeria, in an interview said a lot have been achieved.

    “If you’ve been following our communication, especially looking at our website, you’ll see all the reforms and impacts we have achieved from the Ease of Doing Business perspective. And when you talk about the Executive Orders specifically, we can say there has also been some traction in that area.”

    While acknowledging that infrastructure gaps exists, Uzosike said, a lot has also been done to make documentation process at the port seamless.

    “Truth be told, a lot has changed. For instance, where you used to have 14 documents for inspection, it’s now eight and where you used to have all the agencies inside the ports, with each of them coming one after the other to inspect containers; it has changed. Now all the agents operate with one single window. There are no more multiple points of inspection. So these are things that are really in practice.”

    Pressed further, he said, “Our aspiration is to get Nigeria into the top 50 economies in the World Bank Ease of Doing Business in 10 years while delivering direct impact of the reforms to Nigerians, especially, the MSMEs.”

     

  • Ease of Doing Business: No respite yet for real sector

    The real sector is facing a lot of challenges.To address these challenges, the Federal Government last year issued an Executive Order to facilitate the ease of doing business, promote transparency and efficiency, among others. But the im- plementation of government policies and regulations, some experts say, is hurting efforts at creating a conducive business environment, Assistant Editor CHIKODI OKEREOCHA reports.

    When then Acting President Yemi Osinbajo signed the Executive Order on the Ease of Doing Business, last year, real sector operators heaved a sigh of relief. To them, the order, which broadly sought to facilitate the ease of doing business to save time and cost, promote transparency and efficiency in the business environment, was a strategic response to the challenges of the business environment.

    With its promises of making the business environment conducive, and eliminating the hurdles in the way of a bigger and more productive private sector and, ultimately, forcing a rebound of the economy, the ease of doing business initiative enjoyed the overwhelming support and buy-in of the private sector. They also expected that the initiative would help fast-track the transition to a non-oil economy.

    Other objectives of the Executive Order, which put private sector operators in a joyous and expectant mood, include the promise of boosting domestic and foreign investments, promoting made-in-Nigeria products and services by supporting local contents in public procurement by the Federal Government, as well as creating jobs. However, the achievement of the laudable objectives through the order has come under serious threat. The Nation learnt that various regulations and policies being implemented by the government are impeding the ease of doing business initiative and, inadvertently, stifling the productive sector’s growth.

    One of the regulatory complexities undermining the ease of doing business initiative is multiple taxes and levies by the government. The barrage of taxes and levies, which have been hitting hard on real sector operators, it was learnt, came in the wake of the high revenue drive by the three tiers of government. Although the economy technically exited recession with Gross Domestic Product (GDP) growing by 0.55 per cent in the second quarter (Q2) of last year, the various tiers of government are yet to recover fully from reduced revenue from oil following the crash in oil prices at the international market.

    To make up for the shortfall in the monthly allocation from the Federation Account, government resorted to expanding their list of taxes, levies and fees payable to them by businesses. Now, real sector operators, particularly manufacturers, are feeling the heat and accusing the government of inadvertently stifling the productive sector’s growth through such multiple taxes and levies.

    The Manufacturers Association of Nigeria (MAN), Ikeja Branch Chairman, Otunba Francis Meshioye, did not mince words when he said the cost of the heavy tax regime propelled by the revenue drive by the three tiers of government was being borne principally by businesses. This, he said, was threatening the manufacturing sector’s survival. Explaining further, he said the uncertainty arising from regulatory burden and complexities in government’s tax drive were undermining the manufacturing sector’s ability to successfully launch new businesses, expand existing ones, and create jobs. These, according to him, negate the objectives of the ease of doing business initiative and other reactionary interventions by the federal and state governments.

    Meshioye, who spoke at the 10th edition MAN Breakfast Meeting for CEOs and Managing Directors of member-companies, in Lagos, also lamented that the confidence of local and foreign investors in the manufacturing sector on the ease of doing business was being threatened.

    The MAN breakfast meeting for MDs/CEOs is a yearly event that provides a veritable platform for effective interactions by over 300 CEOs on economic challenges that threaten the survival of the manufacturing sector and also helps proffer ways to mitigate the threats.

    The theme of this year’s breakfast meeting was “The Nigerian Manufacturing Sector: Current Issues and Strategic Options.” Its special emphasis was on “The Impact of Legislation, Regulations and Policies on the Ease of Doing Business in Nigeria,” with Meshioye maintaining that “Regulatory policies should not be seen to impede industrial growth.”

    The MAN chief expressed regrets that despite being the engine of economic growth, the manufacturing sector was under siege. He, therefore, urged government to put in place progressive legislations specifically focused on improving existing policies that will boost the profitability of businesses and ease entry barriers for entrepreneurs.

    Meshioye said though the economy technically exited recession in Q2 of 2017, the exit remains volatile, with the manufacturing sector still battling to survive the myriad of challenges facing it.

    Citing Lagos State as an example, he said manufacturers are contending with the expansion of the list of taxes, levies and fees payable to the state government’s Ministries, Departments and Agencies (MDAs) without consulting stakeholders.

    He listed other challenges to include difficulties created by the bottlenecks in the implementation of the harmonised inspection of workshops, and traffic gridlock at the ports.

    “These are the resultant effects of legislation, regulations and policies being implemented by the government, which together increase the cost of doing business and the misery index of the citizenry,” Meshioye said.

    Also speaking at the  meeting, MAN President Dr. Frank Udemba Jacobs lamented that the introduction of some tax heads and increment in taxes/levies by the state government were done without consultation with stakeholders who are expected to pay the fees. He also said despite the state government’s agreement to harmonise the inspection of factories and work places, complaints received from MAN members showed that MDAs in the state are yet to implement the agreement.

    The over 150 per cent increment in environmental development levy and petroleum storage permit payable to the Lagos State Environmental Protection Agency (LASEPA) has also not gone down well with the MAN chief and his members. He, therefore, called for a downward review.

    Jacobs also pointed out that the biennial review of the Environmental Audit Report by LASEPA as against three yearly review of the same document by the National Environmental Standards and Regulatory Agency (NESREA) was imposing a huge cost on manufacturers.

    He also drew the state government’s attention to the upward review of the land use charge, saying this has compounded the woes of manufacturers who are already at the verge of collapse on the weight of high operating cost.

    As if these were not bad enough, Jacobs accused the state government of not being enthusiastic about patronising made in Nigeria products.

    “The state government has exhibited high level of reluctance. We appeal that the administration directs a reversal of this trend by ensuring that patronage of made-in-Nigeria products is enshrined in the procurement policy of the Lagos State government,” he said.

    However, the aforementioned identified challenges in the business environment now threatening the ease of doing business initiative are not peculiar to Lagos State alone. The Nation learnt that manufacturers and other real sector operators in virtually all the 36 states are grappling with similar challenges.

    For Founder and Senior Partner of Paul Usoro & Co, Mr. Paul Usoro (SAN), lack of synergy, among various government agencies, is partly responsible. Other issues militating against the ease of doing business policy, he said, include inefficient power supply, insecurity, freeze in the lending activities of banks and lack of maintenance culture.

    Usoro, who was guest speaker at the MAN breakfast meeting, said, for instance, that power supply in Nigeria still falls short of the megawatts required to power the economy. He said while the country reportedly generates about 7, 000 megawatts (Mw), this falls short of the required 10, 000 as envisioned in the Economic Reforms and Governance Project.

    The expert in Communication Law, in his paper titled: “The Impact of Legislation, Regulations and Policies on the Ease of Doing Business in Nigeria,” said apart from the problem of distribution of power to consumers, macro-economic instability caused by high interest, inflation and exchange rates also conspired to hurt the ease of doing business initiative.

    Indeed, manufacturers are agonising over high inflation, interest and exchange rates. For instance, many of them are unable to sustain or expand production at the prevailing interest rate of between 20 -27 per cent, depending on the borrower’s perceived risk level.

    As Usoro said: “The major source of capital for businesses in Nigeria still remains bank loans, which come with high interest rates.”

    The exchange rate, which stands at about N306/$1 and N360/$1 at the official and parallel market, respectively, is also not less disturbing.

    He listed other factors militating against the policy to include the unpredictability or lack of continuity of government policies, freeze in banks’ lending activities, multiple taxation and lack of synergy and cooperation among MDAs etc.

    The Ease of Doing Business policy, which has become a subject of scrutiny by experts and real sector operators, came into being as a result of public perception that Nigeria failed to translate her huge population and abundant natural resources to a better economic fortune largely because of challenges to the ease of doing bunnies in the country.

    This position is not without justification. For instance, Nigeria has fared poorly in the global ranking of countries based on Ease of Doing Business and Economic Competitiveness. The World Bank in its ‘2017 Doing Business Report’ ranked Nigeria 169 out of 190 countries on the ease of doing business index. It also ranked 127 out of 138 economies covered in the ‘Global Competitiveness Report 2016-2017’ by the World Economic Forum.

    Usoro said as part of efforts to make smooth some of the observed gray areas in the implementation of the ease of doing business policy aimed at reversing these trends, the three tiers of government should harmonise their taxes.

    He added that the government should see manufacturers as strategic partners, while the executive order should be streamlined and harmonised with existing laws.

  • ‘Mining reforms behind improved World Bank’s ease-of-doing-business ranking’

    ‘Mining reforms behind improved World Bank’s ease-of-doing-business ranking’

    The remarkable improvement in Nigeria’s ranking in the World Bank’s Ease of Doing Business rating, has been attributed to the various reforms by the present administration, including reforms in the mineral and mining sector.

    Minister of Mines and Steel Development Dr. Kayode Fayemi, who disclosed this in Abuja yesterday, said the reforms in the mining sector has helped to reposition the sector as a major revenue earner and improved the country’s rating as a mining destination of choice.

    Dr Fayemi spoke at the opening session of a policy and capacity building workshop for senior officials of the ministry, professionals and stakeholders in the mining industry, organised in partnership with the Australian government.

    The Australian delegation, which comprised of mining experts,  was led by the Deputy  High  Commissioner, Cleo Wilson.

    The minister stated that the mining sector was being positioned to contribute optimally to diversifying the Nigeria economy’s revenue base and creating jobs and economic opportunity for the nation as captured in the Roadmap for the growth and development of the mining industry.

    He said the workshop would provide officials of the ministry, and other stakeholders essential  knowledgeas well a great opportunity to share experiences on both technical and regulatory issues.

    Dr.Fayemi said   the ministry’s aspirations is to build a World Class Mineral and Mining ecosystem designed to serve a targeted domestic and export market for the mineral sector, adding that the Federal Government has demonstrated commitment by collaborating  with different  stakeholders including government of advanced mining jurisdiction.

    He said the workshop with the theme:  “Policy and Capacity Building Workshop for a Successful and Sustainable Mining Sector 2018”, was a follow   up to the first edition that took place in 2016, which focused on the significance of transparency, legislation, and regulatory framework as well as  geoscience and resource information.

    Represented at the workshop by the Permanent Secretary in the Ministry, Dr MuazuAbdulkadir, the Minister noted mining’s contribution to the country’s economic growth that grew by 0.55% as at 2017.

    “The  miningsector also grew by 2.24% and achieved a 300% increase in revenue (royalty and fees) between 2015 and 2016, and a steady progress and as at  November 2017, the sector had already surpassed the entire revenue of about N2billion generated for the whole of 2016, with over N3.5billion contributed to the federation account. “

    “We also excitedly welcomed the news that Nigeria moved up an unprecedented 24 steps in the World Bank’s Ease-of-Doing-Business ranking, and was adjudged one of the 10 top reforming economies. Reforms in the sector and efforts to make the Nigerian jurisdiction more attractive to investors impacted on Nigeria’s ranking in perception indices in the ‘World Risk Report’, published by the Mining Journal, which indicates that Nigeria has made remarkable improvements in both hard risk and perceived risk factors.

    “The Nigerian Mining Jurisdiction is now considered to have a better investment risk profile than several other leading jurisdictions, and among the best in Africa”.

    Speaking further, the Minister said that Nigeria and Australia have a long standing history of commercial, cultural and diplomatic build  up link built up over the years. That both countries had in 2012 signed an MoU covering political economic, commercial, Scientific, technical  and cultural cooperation.

    According to the Minister, “We recognize that the imperative of cooperation has never been more urgent as we pursue maximal growth for the sector. The economic fortunes and aspirations of sovereign countries of the world over are now so interconnected and inseparable.

    “In Nigeria, we consider it imperative to go beyond our borders to engage ever more intensely with the matrix of knowledge, experience and global support. In an interconnected world, no nation can pursue its economic interests as an island.

    “Essentially, the significance of this workshop is to provide information on leading practice from Australia on building a sustainable mining sector for Nigeria. There is no better time to have this workshop than now, diversification is ongoing and at the heart of the government’s agenda.”

     

     

  • FG hails World Bank’s business ranking report

    FG hails World Bank’s business ranking report

    The Federal Government on Wednesday said that it is excited by Tuesday’s Ease of Doing Business Report of the World Bank which ranked Nigeria 169 out of 189 countries of the world.

    Vice President Yemi Osinbajo said the ranking was a confirmation that policies and programmers being implemented by the administration were yielding positive results.

    In a statement by his media office, Osinbajo said “the Buhari administration is gratified that the various reform initiatives put in place towards instituting a positive business environment is slowly but gradually yielding some dividends as Nigeria’s ranking in the World Bank’s Ease of Doing Business remains static, halting a falling trend in the past several years.

    “The latest World Bank’s Doing Business 2017 ranking report released on Tuesday, October 25th which ranked Nigeria 169 out of 189 countries in the overall Ease of Doing Business rank is a positive indication that the focus and tenacity of President Muhammadu Buhari to reposition the nation’s business and economic environment is working and on course.

    He said “while Nigeria country’s position remain the same as last year on the index ranking, it is encouraging that Nigeria has recorded some positive outlooks in 4 critical areas of the ranking-namely:

    “The areas captured in the rating include Starting a Business,
    Dealing with Construction Permits, Registering Property and. Access to Credit.

    “The objectivity and reliability of this report coming from an international development institution lends weight to the milestone recorded in particular on the distance to frontier (DTF) metric, where the country’s score improved slightly from 44.02 in Doing Business 2016 to 44.63 in Doing Business 2017.” He added

    He said that the World Bank report’s improvements mean Nigeria’s last year business regulatory environment as captured by the Doing Business indicators improved slightly in absolute terms and the country is decreasing the gap with the global regulatory frontier.

    This, he said, is a morale booster for stakeholders involved in the efforts aimed at removing existing bottlenecks in the business environment.

    “This observation by the World Bank is indeed a recognition of the bold initiatives and untiring work of President Muhammadu Buhari-led administration, particularly through the Presidential Enabling Business Environment Council, PEBEC, chaired by the Vice President.

    “The President in August had set-up PEBEC, which has an active collaboration with the private sector, including a Secretariat led by Mr. Seyi Bickersteth of KPMG, “to remove the bottlenecks that stifle businesses and create the right enabling environment and investment climate.” He added

    PEBEC comprises 9 ministers, the Head of the Service and the CBN Governor as members and is mandated to give progress reports to the Federal Executive Council on a monthly basis. The Council’s secretariat with a team comprising staff from both public and private sector, is supported by knowledge experts, and collaborates across ministries, departments & agencies as well as with other private sector stakeholders to achieve reform objectives.

    “President Muhammadu Buhari is absolutely committed to scaling up its reform activities so as to continue to arrest the past decline where the country fell from No 94 in 2006 to 169 in 2016, and positively project the business climate to an enviable position in the international business community.

    “With the reform efforts being put in place now, indications are that in subsequent years Nigeria will scale up significantly in the ranking,” the statement stated.