Tag: Economy

The special focus on the maritime resources promises to unlock enormous potential, but the deeply entrenched inefficiencies require comprehensive reforms. OLUWAKEMI DAUDA reports

The euphoria that greeted the creation of the Ministry of Marine and Blue Economy by President Bola Tinubu will take years to subside. Stakeholders, who spoke with The Nation in a separate interviews, said the news was a matter for jubilation for them.

This, they said, was so because for over 30 years, stakeholders in the sector had advocated the creation of a separate ministry to oversee the affairs of the maritime industry like that of aviation. But the advocacy, they said, fell on deaf ears until President Tinubu assumed duties and saw the reason to create the special purpose ministry to drive the economy and job creation.

The stakeholders were, therefore,  commended Tinubu for establishing a dedicated ministry to drive the development of the blue economy and marine resources.

 Agencies under the new ministry

They are the Nigeria Port Authority (NPA), Nigeria Maritime and Safety Agency (NIMASA), Nigeria Shipping Council (NSC), National Inland Waterways Agency, Maritime Academy of Nigeria (MAN) and Council for the Regulation of Freight Forwarding in Nigeria (CRFFN).

 Appointment of new Customs chief

 The appointment of Bashir Adewale Adeniyi as the Acting Controller-General of the Nigeria Customs Service (NCS) by President Tinubu was also seen as a square peg in a square hole because of his experience and immense contributions to the growth of the service.

Stakeholders, however, said the President must ensure that Adeniyi rejigs the Service and focus on trade facilitation to enable the service compete favourably with others across the world.

Adeniyi, they said, must make trade facilitation in the port his priority to enable the port attract international trade.The new Customs chief, they said, needs to eradicate anything that could lead to human interface between Customs officials and traders; establish an electronic platform, called Revenue, Innovative, Intelligence, Secured, Economy (RIISE), for greater efficiency of the service; the need to lay less emphasis on revenue generation to align Nigeria with the global best practices as well as the need to fashion out the Nigeria Operating Model (NOM) that will boost trade facilitation in the nation’s ports and border stations.

Information and Communication Technologies (ICT), the former President, Association of Nigerian Licensed Customs Agents (ANCLA), Prince Olayiwola Shittu said, must be the foundation for everything the new CGC may intend to do to facilitate trade. “This is essential because it will enable Customs to increase the quality of its control activities while, at the same time, enhancing their level of trade facilitation.”

Good reactions to the creation of the Ministry of Marine and Blue Economy by President Tinubu was huge and encouraging.

 What the stakeholders said:

 A Senior Advocate of Nigeria (SAN) and maritime lawyer,  Dr Olisa Agbakoba, said the maritime sector  has the potential to generate over N7 trillion yearly, for the Federal Government.

 Agbakoba, who was the  pioneer President of Nigeria Chamber of Shipping, said the creation of the new ministry by President Tinubu is good but must be used by its Minister, Adegboyega Oyetola to position the country as a global maritime hub and drive economic growth.

 The former Nigeria Bar Association (NBA) President added that the maritime sector holds greater promise than the petroleum industry and could contribute substantially to public revenue.

 “The maritime sector has been a distinctly ignored sector of our economy. This has been a major omission. Nigeria is a maritime nation and must advance policy issues to tap into the massive economic opportunities.

 “This is a sector that will, with proper direction of government, easily contribute at least N7 trillion to the public revenue,” he said.

Key aspects of the maritime policy, he said, “must focus on enforcement of Cabotage legislation, ports development, ocean governance and the blue economy in addition to many aspects of this incredibly wealthy sector. We look forward to robust policies by the government,” Agbakoba said.

With the creation of a dedicated ministry, other stakeholders said President Tinubu is set to transform the industry so that it can contribute significantly to the Gross Domestic Product (GDP), reduce unemployment and develop the economy.

The sector, they said, is vital for sustainable growth of the economy, uplifting the poor out of poverty and for inclusion and promotion of the average Nigerians financially.

For instance, Shittu said the sector has so much to offer the economy in terms of jobs and wealth creation, reduction in inflation and debt profile.

The former ANLCA President noted that the country has relied so much on the crude oil economy and gave kudos to Tinubu for focusing on other sources, particularly the maritime industry, shipping development and agricultural sector.

Based on the previous neglect, Shittu said the sector has been bedevilled by poor infrastructure, and policy implementation, inadequate manpower capacity, poor shipping industry, lack of automation causing delays in cargo clearance, unsafe inland waterways for movement of persons and goods, infiltration of foreigners displacing, lack of support for local contents, lack of recognition of nation’s seafarers, extortion and multiple taxation, among others.

Importers, exporters, terminal operators, clearing agents, experts and other port users  agreed that the decision by Tinubu to create the new ministry was a game-changer for Nigeria.

A former General Manager, Public Affairs, NPA, Chief Michael Kayode Ajayi, however, said the Minister of Marine and Blue Economy must set up a task force that would look into the port concession agreement and see if it was skewed in favour of the terminal operators  or not;  provide the infrastructural base in and out of the port system and see to human capital and manpower development.

 Ajayi decried the huge number of government agencies at the port, which he said, had led to the high cost and time of doing business.

 He advised Oyetola to strengthening the institutional capabilities of maritime agencies, thereby positioning the country as a  hub of maritime activities in West and Central Africa to boost the economy.

 “Based on its potential, the maritime sector has come under siege by criminal elements who orchestrate acts of piracy, sea robbery, arms proliferation, crude oil theft, terrorism, migration, illegal and unregulated fishing and oil theft within our  territorial waters and that must be looked into.

 “Statistics show a total freight cost estimate of between $5 billion and $6 billion annually, while the maritime component of Nigeria’s oil and gas industry is worth an estimated $8 billion alongside seaborne transportation, oceanic extractive resource exploitation and export processing zones.Therefore, there is no other time than now for the this administration to protect the nation’s over $14billion maritime trade,” Ajayi said.

 A safe, secure and efficient shipping industry, Ajayi  said, would assist the government in revitalising and diversifying the  economy away from crude oil exploration to a vibrant maritime trade.

The President, Association of Marine Engineers and Surveyors (AMES), Israel Obadan, called for a policy that would promote manpower development in the sector.

 Obadan bemoaned a situation where there is no maritime manpower development policy by the government to address the challenges in the sector.

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 The AMES chief urged Oyetola to engage with stakeholders in the sector to address the issues affecting the industry.

 Also, an analyst, Mr Semiu Olufowobi,  said maritime remains the key sector apart from oil and agriculture.

 “Nigerians are expecting Asiwaju Tinubu and his cabinet to focus on other sources of revenue apart from oil and gas, particularly the maritime sector which covers both aquatic and marine spaces including oceans, seas, coasts, lakes, rivers and underground waters.

 “It also encompasses a range of productive sectors – fisheries, aquaculture, tourism, transport, ship building, energy, bio-prospecting, under-water mining and related activities – all pointing towards economic prosperity, if adequately harnessed by the in-coming administration.

 “Crude oil contributes to less than 10 per cent  of our GDP but accounts for roughly 90 per cent of our foreign-exchange earnings and half of the government revenues. The high level of poverty and high rate  unemployment we are facing are based on the insistent collapse in oil prices. The economic picture may remain cloudy if the new government fails to pay adequate attention to maritime sector that has the potential to generate over N7trillion annually,” Olufowobi said.

 Also, the spokesperson for the  Seaport Terminal Operators Association of Nigeria (STOAN), Dr Bolaji Akinola, advised the Federal Government to overhaul the maritime sector.

 He said in other climes, the sector is superintended by experts who have experience to drive efficiency and add value to the sector.

 Akiola said for the sector to become a top revenue earner is the ability of Nigerians to own vessels. He said the NIMASA has done nothing to help Nigerian ship owners to own vessels and urged the new Minister to assist in that direction.

 He regretted that the nation’s coastal water is being dominated by foreigners and urged the minister to correct the imbalance because it would help check billions of dollars capital flight which Nigeria loses to foreign shipping companies who monopolise and specialise in coastal services.

 Director-General, NIMASA, Dr Basir Jamoh; Managing Director; NPA, Muhammed Bello-Koko; and Chairman, STOAN, Vicky Haastrup commended President Tinubu for the creation of the Ministry of Marine and Blue Economy and hail the appointment of Oyetola to man the affairs of the new ministry.

 The majority of other stakeholders also promised to give their support to the minister.

 The following are the major challenges experts and stakeholders said the Federal Government must address promptly to move the industry forward.

 Reflection on trucks

 Findings revealed that the number of those that have died or have been injured on the roads leading to Apapa Port Complex (LPC) and the Tin Can Island Port in Lagos are uncounted. Trucks laden with containers from the ports have turned the Western Avenue, Apapa/Oshodi expressways and other parts of the Centre of Excellence to a killing field because of the rickety vehicles operating at the ports and the failure of the past governments to enforce its own law.

 The number of innocent, hardworking and promising citizens that have been killed or injured on the access roads is on the rise. Two remain outstanding. One was an accident at Ojuelegba, Surulere, Lagos involving a container-laden trailer, which fell off the bridge and crushed two vehicles, killing three persons; and that of a journalist who was killed at Coconut Bus Stop after the Tin-Can Island Port on Apapa/Oshodi Expressway.

 The new minister, stakeholders said, must ensure that only good vehicles are allowed on port corridors by the security agents and that violators should be prosecuted.

Facilities of two Lagos seaports

over-stretched

 The problem of the ports, stakeholders said, include over-stretching of facilities, which, according to the NPA, are over-stretched by over 128 per cent of their installed capacity.  Bello-Koko admitted that the installed capacity of the ports is between 40 and 45 million metric tonnes of cargo yearly

 Poor port infrastructure needs $800m

 The state of decay of many ports in and outside Lagos is alarming, especially the Tin-Can Island Ports in Lagos. NPA have raised the alarm that the ports need total rehabilitation and fixing of its quay wall.

 Its Managing Director admitted that there is imminent collapse in the ports, if nothing is done by the government to fix it.

 “Our estimate on what we need to repair at the ports is between $560 million and $800 million. Now that gap is because if we decide to leave Apapa Port till some other time, we do not need $800 million but we need to also reconstruct Tin Can Port, as we are reconstructing other places; we need about $800 million.

 “We have increased our revenue from N260 billion to N361 billion. Our contribution to CRF has increased to N91 billion and we believe that this year, we will do far better than that.’’

 With a new minister in charge of maritime affairs, it is expected that the issues surrounding collapsing ports will be addressed swiftly.

 Single window

Operators, stakeholders and other port users are due for a single window platform where functions of government agencies operating at the ports are domiciled in one single platform that will be available and accessible to everybody at the same time.

With agencies like Customs, NPA, Nigerian Immigration Service (NIS), Nigeria Agricultural Quarantine Service (NAQS), National Agency for Food and Drug Administration and Control (NAFDAC) and the Nigerian Drug Law Enforcement Agency (NDLEA) are domiciled in the ports but answering to different ministries, port users have been exposed to irregularities in terms of payments during cargo clearance processes and the minister has the responsibility to address the problem.

 CVFF disbursement

 The Cabotage Vessel Financing Fund (CVFF) is a fund domiciled with NIMASA as enacted in the Cabotage Act 2003. Its primary objective is to improve indigenous tonnage in terms of capacity for ship-owners to compete favourably with their foreign counterparts.

 Towards the end of the last administration, the Federal Government promised to disburse the CVFF fund but failed to do so.

The fund, which has accrued over $700 million, stakeholders said, should be disbursed by Oyetola to boost indigenous capacity and creat employment.

 With the establishment of a new ministry  in charge of marine and blue economy means that the issues delaying the disbursement of the CVFF fund would be resolved with Primary Lending Institutions (PLIs) appointed by the government

 Lekki Port

 Stakeholders are worried over the mode of evacuation of cargo fro Lekki port.

Experts say the Lekki Deep Sea Port may suffer a similar fate with that of Apapa if railways which are the normal features of modern ports for delivery of exports and evacuation of imports are not linked to it.

 The road from Aja to Eleko, Lekki, Osoroko, Epe, Itoikin and Ijebu-Ode may become dangerous if the minister fails to bring efficiency to the ways goods are going to be evacuated from the port.

 What Oyetola needs to do

  Oyetola must remember is that he was appointed to harness Nigeria’s potential in the maritime sub-sector and generate employment for the restive youths.

 The sector had suffered enough and now is the time for Oyetola act.

The importance of the ICT sector in growing the nation’s economy can be better appreciated in terms of its contribution to the Gross Domestic Product (GDP). In Q2, 2023, it delivered 19.54per cent to the nation’s GDP. There’s, therefore, the need to tackle the legacy challenges in the sector, consolidate the gains made so far, thereby creating more jobs and wealth for the nation, writes Assistant Editor, LUCAS AJANAKU.

When the Nigerian Communications Commission (NCC) convened the telecoms industry’s risk management forum in Abuja at the twilight of last year, it was to address the multifaceted challenges bedevilling the industry.

Executive Vice Chairman/CEO of NCC, Prof Umar Danbatta, identified some of the major risks in the industry to include cybersecurity and online fraud, regulatory burden, double taxation, vandalism of telecoms infrastructure, Right of Way (RoW) challenges, access to foreign exchange (forex) and inter-industry debts.

He said exposures to these risks could impact negatively on the industry, the digital economic drive of the Federal Government and by extension, the country’s revenue earnings.  

Data collated from both the Central Bank of Nigeria (CBN) and National Bureau of Statistics (NBS), showed that the ICT industry has consistently maintained a positive growth trajectory which should be sustained.  In 2018, investment profile in the sector stood at $68 billion. This increased to $70.5 billion in 2019 and $72 billion the year after. At the end of 2021, the figure rose to $75,560,563,417.79, approximately, $75.6 billion, representing the latest figure from the initial $70 billion investment in the last few years.

This is a tremendous growth from an initial investment profile of $500 million as at 2001, when the sector was fully liberalised.

The sector has continued to be a major contributor to the nation’s economy as its sectoral quarterly contribution to the nation’s Gross Domestic Product (GDP) went up from about 8.5 per cent in the third quarter (Q3) of 2015 to N10.126 trillion as an aggregate quarterly contribution to GDP last year.

In Q2, 2023, the sector contributed 19.54 per cent to Nigeria’s real GDP representing an increase in contribution when compared with the 18.44 per cent recorded in the same period last year.

In Q2, it  contributed 19.54 per cent to Nigeria’s real GDP, representing an increase in contribution compared to the 18.44 per cent recorded in the same period last year.

“In Q1, the sector contributed 12.94 per cent equivalent to N2.246 trillion, while Q2 witnessed an all-time high GDP contribution by the telecom sector to the nation’s economy of 15 per cent  valued at N2.593 trillion. The sector’s contribution to GDP in Q3 was 12.85 per cent and in Q4, it grew to 13.55 per cent, which were valued at N2.436 trillion and N2.851 trillion.

 “The growth trajectory continued this year as the telecommunications and Information Services sector in Nigeria delivered N2. 508 trillion in terms of financial value to the nation’s GDP, representing 14.13per cent in Q1 2023,” Prof Danbatta said.

From 8.50 per cent contribution in 2015, it grew to 9.13 per cent in 2016 and to 8.66 per cent in 2017. In the last quarter of 2018, telecoms contributed 9.85 per cent to national GDP, while it added 10.60 per cent in Q4 2019.

Also in Q2 of 2010, it added 14.30 per cent to GDP; 14.42 per cent in the Q2 of 2021. The highest quarterly contribution to GDP by the sector to the economy was 15 per cent in the Q2 of 2022.    

Stakeholders in the ICT industry have, therefore, praised the choice of Dr. Bosun Tijani as Communications, Innovation and Digital Economy Minister by President Bola Tinubu.

The stakeholders, acting under the aegis of Association of Telecommunications Companies of Nigeria (ATCON), Nigeria Computer Society (NCS) and Association of Licensed Telecom Operators of Nigeria (ALTON), have lauded the President for choosing an IT professional. 

Until his appointment, Tijani was the Chief Executive Officer and co-founder of CcHub, located in Yaba, Lagos.

ATCON President, Tony Emoekpere said the group welcomes the appointment of Dr Tijani.  “It is encouraging that President Tinubu appointed a person with an IT background to the post and the fact that he is relatively young shows that a dynamic approach to the industry is being targeted.

“Of note also is the addition of “Innovation” to the title of the Ministry.  It is a further pointer to the direction the government intends to take in the communication industry. Considering one of the promises of a million digital jobs, a lot of innovation is truly required,” he stated.

Emoekpere said there were still fundamental challenges facing the industry, especially at the physical layer – infrastructure, which if unresolved, would not allow success in the application layers where most of the digital jobs are domiciled. There is great need to develop, secure and enable further expansion of communication infrastructure in the country.

“With a solid infrastructure base, innovative digital services, which can take advantage of the growing Digital Economy can be further developed and expanded to all areas of the country, especially the unserved and underserved areas,” adding that “issues ranging from funding, security and permits still bedevil the industry, although several strides have been made especially by the regulating bodies, chiefly NCC as well as National Information Technology Development Agency (NITDA) and now the Nigerian Data Protection Commission (NDPC).”

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Specifically, ATCON, which draws its membership from mobile network operators (MNOs), Internet Service Providers (ISPs) and other players in the ICT ecosystem, wants Tijani to create a special FX window for industry operators; and pass into an Act, the Critical National Infrastructure Bill; as well as implementation of agreement between the Governors’ Forum and MNOs on RoW and the naughty issues of multiple taxation/regulation.

“The success of the new minister is our success. Our recommendation is to constitute an Industry Think Tank Team to help him fast track growth and development in the sector. He needs expertise of industry associations to embark on projects and programmes that would speed up the growth, efficiency and effectiveness of the Nigerian telecom and ICT sector,” ATCON said, adding that members were ready to work with the Federal Government for impact.

NCS President, Prof Adesina Sodiya said the group would work with Tijani, he being is a practitioner and knowledgeable about the industry. Like ATCON, NCS commended the President for the choice of Tijani.

For the government to have considered an IT practitioner is a good thing. That shows that we have moved away from the past when non-IT practitioners were appointed as ministers overseeing the sector. In NCS, we are ready to work with any minister that is ready to do the job, but nonetheless expressing the sentiment that “honestly, we would have loved the choice of our member who is part of the history of our industry.”

Prof Sodiya stressed the need to develop the strength of the nation in the area of IT, saying the country has not been doing well in manufacturing small items such as USB cables. He urged the minister to build capacity in this respect.

He said Nigeria has strength in software development and, therefore, urged him to build on this strength, the same way the Indians did and today, they are all over the world leading the IT sphere.

In the area of creating jobs, he said the minister should encourage the creation of soft skills, not necessarily the creation of brick and mortar jobs, the type created for secondary school leavers. He urged the minister to encourage skills acquisition, the type that young Nigerians could be engaged in from home, working for multinational companies abroad.

He cited skills in emerging technologies such as artificial intelligence (AI), robotics, data analytics and many more, adding that Tijani should also prioritise digitising governance. He said there was no reason railway tickets could not be obtained online within the comfort of the homes of intending travellers.

Sodiya urged the minister not to limit his expertise to the Federal Ministry of Communications and Digital Economy; rather, he should allow his impact to be felt in the health, agriculture, education, sports and other sectors of the economy because the way to go globally is digital.

Like Sodiya, Chairman, Zinox Group, Leo Stan-Ekeh, said the Federal Government should build hubs in tertiary institutions to accelerate soft skills acquisition and satisfy the curiosity and expertise of the youthful population of the country.

Stan-Ekeh, who expressed confidence in the ability of President Tinubu, to drive genuine data because of its importance to national planning, said emphasis must also be on the creation of Micro, Small and Medium Enterprises (MSMEs), which are said to be the growth engine of modern economies.

ALTON Chairman, Gbenga Adebayo, congratulated the minister and urged him to preserve the independence of the regulatory body for sustainable growth.

 “At present, the telecommunications companies in Nigeria are overburdened with over 39 different taxes and levies, the bulk of which are multiple, or excessive. If this new tax is added to existing taxes, it will effectively increase Nigeria’s corporate income tax rate to about 36 per cent which is one of the highest rates in the world.

“This will not give a good image about our country and give the impression that our campaign for Ease-of-Doing-Business in Nigeria is not genuine,” he said.

Adebayo had opposed the government’s push to impose a five per cent excise duty on the telecoms sector.

Stan-Ekeh’s position on MSMEs resonates with global trends. The United Nations (UN), in a report, stated that MSMEs account for 90 per cent of businesses, 60 to 70 per cent of employment and 50 per cent of global GDP.

According to the International Finance Corporation (IFC), an arm of the World Bank, 65 million firms, or 40 per cent of formal MSMEs in developing countries such as Nigeria, have an unmet financing need of $5.2 trillion every year, which is equivalent to 1.4 times of the global MSME lending.

The World Bank said MSMEs represent about 90 per cent of businesses and more than 50 per cent of global employment. Formal SMEs contribute up to 40 per cent of national income (GDP) in emerging economies.

The latest SMEDAN/NBS MSME Survey indicated that Nigeria’s SMEs contribute nearly 50 per cent of the country’s GDP and account for over 80 per cent of employment in the country. No doubt, the sector is pivotal to Nigeria’s growth, including reducing poverty levels. However, the sector continues to be weighed down with challenges which ultimately impact the nation’s growth.

PwC’s MSME Survey 2020 showed that Nigeria’s MSMEs account for 96 per cent of the total number of businesses in the country and contribute about 50 per cent to the national GDP. In terms of ownership structure, 73 per cent of MSMEs are sole proprietorships, while 14 per cent are private limited liability companies. The balance of 13 per cent are partnerships (six per cent), Faith based organisations (five per cent), cooperatives (one per cent) and others (one per cent).

Aside from the challenges of obtaining cash, multiple taxations, and others, there is also the problem of technology deployment.

The Director-General, National Information Technology Development Agency (NITDA), Kashifu Inuwa, said digitisation of MSMEs would increase revenue by 26 per cent as well as reduce operating cost by 22 per cent and contribute $53billion to the economy.

Danbatta stressed the need to de-risk the sector because of its contributions to the national economy.

He said: “We can all acknowledge our highly innovative people and the thriving digital economy, which is creating employment opportunities for Nigeria’s teeming population and enabling wealth creation for Nigerians, irrespective of where they live and work.

“In addition, we equally note improvements in broadband penetration, which is 45.09 per cent as at the end of September 2022 and the development of Digital Industrial Parks (DIP) which will ensure digital skills acquisition, promote innovations, provide jobs and support the overall digital economy agenda of the Federal Government.

“All these programmes and initiatives as well as many others would be impacted when we do not take appropriate steps to critically assess the challenges that we are facing as a fast-evolving industry and proffer solutions that sustain the advances in the digital economy ecosystem. 

“While risk management has been critical in our regulatory service delivery, we acknowledge that all stakeholders must be concerned about the varied uncertainties that the industry is confronting.

“The ICT sector is inherently filled with several business and technology risks. It is therefore important that regulatory risks be minimised to ensure that services are not disrupted and consumers obtain the best and latest services that are globally available.”

Manufacturers Association of Nigeria (MAN) has said in the absence of commensurate infrastructural development and significant success in poverty-reduction and industrialisation programmes, Nigeria’s debt profile, which has ballooned to over N77 trillion, has become a source of worry.

MAN said as of last December, the country’s total debt had escalated to N46.25 trillion, marking about 17 per cent surge from the record of December 2021. It noted that the debt composition showed that while domestic debt stock accounted for 59.6 per cent of the total debt, external debt stock contributed 40.4 per cent.

The association, however, said unfortunately, the country’s debt profile has ballooned to over N77 trillion, following the approval of the securitisation of the Ways and Means advances. It warned that Nigeria’s whooping debt service-to-revenue ratio of over 100 per cent might spell doom for the new administration.

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MAN, in a statement, expressed worries that the huge debt profile may leave the new administration to continue the borrowing spree or incapacitated to provide critical infrastructure needed to boost the manufacturing sector and kick start the recovery of the economy.

The statement entitled ‘MAN at the Receiving End of National Debt Crisis’ was the special focus on the Manufacturers CEO Confidence Index (MCCI) Q1 2023 report released last week, where MAN lamented what it described as endless domino effects of escalating public debt on  manufacturing.

The MCCI is an index created by MAN to measure changes in quarterly pulsation of manufacturing activities in relation to movement in the macro-economy and government policies.

In the MCCI Q1 2023 Special Focus, the Director-General of MAN, Segun Ajayi-Kadir, for instance, said rising domestic debt was crowding out private investment in the manufacturing sector by reducing credit availability and forcing hike in lending rates.

He lamented that external debts were mostly serviced in foreign currencies, hence high demand for foreign currencies further depreciates the naira and makes importation of non-locally produced critical inputs highly expensive for manufacturers.  

Moreover, higher debt servicing, according to him, was consuming greater volume of forex and worsening the forex scarcity that has plagued the manufacturing sector for many years.

“Higher debt repayment requires increased revenue,” he emphasised.

Ajayi-Kadir further said the  Federal Government has continued to breed a harsh business environment by its indiscriminate imposition of high and multiple taxes on manufacturers to generate revenue.

“A major point of reference is the recent exponential hike of the excise duties on beverage and tobacco goods,” he added.

The MAN DG also said huge public debt led to low foreign investment and foreign capital inflow which worsens the forex scarcity that has remained a bone in the throat of manufactures, adding that as public debt continues to grow unsustainably, it becomes increasingly difficult to cover salary payments and other recurrent expenditure in the civil service.

“The implication is more borrowing for government consumption or recurrent expenditure and less on infrastructure and other capital projects meant to boost manufacturing sector performance,” he said.

Ajayi-Kadir said contrary to the popular parlance in government quarters that Nigeria has revenue problem, the country’s debt crisis is not a result of inadequate revenue and it is anti-growth to view manufacturing taxes as the last resort for curbing the debt problem.

As he pointed out, “The manufacturing sector which has always been at the receiving end has not felt any significant impact of the debt finance on the numerous challenges that have bedeviled its performance in many years.

“Infrastructure decadence, forex scarcity, credit crunch and naira depreciation have become bones in the throats of MAN members despite the humongous increase of over 410 per cent in the country’s debt profile in the last eight years.”

Ajayi-Kadir insisted that amidst multiple taxes, Nigeria’s real problem is not revenue generation or collection but the siphoning of collected revenue so that they do not reflect in the records. He said contrary to popular believe, exorbitant taxes are also collected in the informal sector of the economy without adequate remittance into state coffers.

“MAN is of the view that debt worth of N77 trillion is an enormous burden to inherit and will most likely limit the achievements of the new administration unless the country’s revenue is increased by widening the tax net through an enhanced data capture of business operators in the informal sector,” he said. 

The MAN boss also recommended the need to strictly implement the Voluntary Assets and Income Declaration Scheme (VAIDS) through the Federal Inland Revenue Service (FIRS) and also further identify and amend the loopholes in the tax laws in order to reduce tax revenue leakage.

He also wants government to promote fiscal discipline by reducing the cost of governance and strictly complying with section 41 of the Fiscal Responsibility Act and section 38 (sub-section 2) of the Central Bank of Nigeria (CBN) Act.

Other recommendations put forward by MAN include ensuring the rehabilitation of local refineries and removing the humongous annual subsidy in phases while ensuring they are backed with appropriate palliatives for households and businesses; ensuring proactive judicial investigation into allegations of oil theft and stamp duty fraud.

The Association also called on government to embark on mechanisms that promote coordination and confidence among creditors in order to be granted opportunity for debt restructuring; prioritize debt management and transparency to control risks and reduce the need for restructuring, which stands to benefit both debtors and creditors.

It further harped on the need to ensure proper management of capital and recurrent expenditure by determining the appropriate spending priorities that reflect the yearnings and aspirations of households and businesses within the limits of available resources.

MAN also wants government to establish incorruptible monitoring teams tasked to ensure effective budget implementation and detailed evaluation of budget performance; set up a special court and reinvigorate the anti-graft agencies like the Economic and Financial crime Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC) in order to strengthen the fight against corruption.

MAN further recommended promoting transparency and productivity in government expenditure by ensuring public funds are expended on feasible development projects in order to minimize wastage, and optimizing the capability of the states to generate internal revenue given the abundant natural and human resources.

It also said there was need to diversify the country’s revenue base by boosting critical sectors like manufacturing, agriculture, entertainment, tourism and ICT, as well as prioritizing and incentivizing critical sectors with low interest rate and improved infrastructure to enhance investment and productivity.

Other options that appealed to MAN include expending recovered loots on debt servicing and sustaining the economy with internally generated revenue; ensuring highly effective exchange rate management to avoid exchange rate crisis that could threaten the sustainability of debt.

The Association also said government should ensure that funds borrowed are highly purposeful, properly documented and studied along with the specific maturity date, negotiations and clauses, among others.  

By Ibrahim Adam

The National Union of Chemical, Footwear, Rubber, Leather and Non-Metallic Products Employees, (NUCFRLANMPE) has appealed to the Federal Government to implement policies that will lessen the effects of the removal of the fuel subsidy.

The Union President, Babatunde Olatunji, made this call at the opening of the 31st yearly industrial relations conference in Ado Ekiti, the Ado Ekiti State capital.

 It had as its theme “Social dialogue as a vehicle for promoting decent work and industrial harmony”.

He called on the government to develop regional policies that would enhance the local economy and people’s quality of life.

“It is time to revive local refineries, build infrastructure such as road networks and electricity supply, as well as develop the iron and steel sector, which is key to economic growth.

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“Insecurity should be tackled, multiple taxation, rent and charges should be regulated to allow manufacturing companies survive and promote Gross Domestic Products (GDP) in Nigeria,” Olatunji said, adding that lack of power supply has made it difficult for manufacturers to operate at full capacity.

President of the Nigeria Labour Congress (NLC), Joe Ajaero said increasing the competence of employees through training will aid in the country’s development.  Ajaero, represented by Ekiti state NLC Chairman, Kolapo Olatunde, added that without the necessary skills, workers wouldn’t be able to combat what he described as “forces of retrogression.”

The Executive Secretary, NUCFRLANMPE, Femi Oke, emphasised that effective government and economic and social harmony depend on social discourse. He therefore recommended the State and Federal Governments to enhance the practice of social dialogue in order to lessen persistent unrest and boost labour productivity.