The Nation Newspaper

Tag: Industrialists

  • Industrialists, Centre partner to boost MSMEs

    Industrialists, under the aegis of Nigerian Association of Small Scale Industrialists (NASSI), are partnering the Centre for International Private Enterprise (CIPE), United States to improve Micro, Small and Medium Enterprises (MSMEs).

    Making this known in Abuja, NASSI National President Chief Solomon Vongfa said the partnership was to encourage best practices.

    According to him, the partnership  became necessary in view of the challenges faced by the association as well as the zeal to propel MSMEs to be effective and well grounded.

    “Due to some lapses discovered in the management of the association, we sought for help through the CIPE, U.S.A and it intervened by sending its consultants to drill the association on good governance,’’ Vongfa said.

    Vongfa said based on that, CIPE has held a Diagnostic Meeting with NASSI aimed at studying the association to overhaul its operation.

    He said based on that meeting, there was an action plan that would run for three years for the association.

    “The diagnostic meeting revealed certain areas in which the management of the association has problems. As part of its strategic plan, CIPE has to redo our statutory plan to suit international best practice. The implementation will start mid-September,’’ he noted.

    Vongfa, however, called on the National Executive Committee members of NASSI, who were the statutory body to give necessary corrections and approve the outcome of the meeting for implementation.

    He recalled that the MSMEs survey in 2017 showed that the MSMEs recorded about 41 million entrepreneurs in the country.

    He said the survey was carried out by its regulatory agency, the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) in collaboration with the Nigerian Bureau of Statistics (NBS).

    The national president added that the survey revealed that among the 41 million MSMEs recorded, about 37 million were micro and the smaller level.

    “This is to show that majority of people doing business in Nigeria based on the survey are at micro level, which is the centre of our own sector,” Vongfa said.

    Describing NASSI as the bedrock of the MSMEs in the country, he decried the challenges bedeviling it, which, according to him, included lack of funds that affected its growth.

    “The government should take it very serious and intervene by injecting more funds into the MSMEs; people are willing to take loan and pay back, but the major issue is recovering the loans.

    “When you have Business Management Organisations (BMOs) behind any disbursement, you will recover the loan effectively.

    “If there is sufficient funding, there will be more job creation and poverty reduction. It goes simultaneously,” Vongfa added.

    Commenting on the African Continental Free Trade Area (AfCFTA) agreement, he said initially NASSI was not fully prepared for it, but with the intervention by CIPE and their noting of the benefits of the agreement, NASSI must be part of it.

    “We are also encouraging government to support by providing machines and equipment that can improve production and quality of products to boost competitiveness. That is the key to implementing the AfCFTA agreement.

    “Why we cannot be very competitive with the global issue is the problem of finishing of the products of some of our members which is very poor. If the packaging is not sophisticated it will not move in the market.

    “Packaging is one of the outcomes from the CIPE diagnostic meeting because you have to be attractive for patronage.

    “We are taking our advocacy to government; you cannot do a policy that will favour only the conglomerate or the big companies while we the major sector of the economy suffer it most.

    “If we cannot compete due to lack of support and fund, the AfCFTA agreement will be a disadvantage to us. But if this understanding is there, it will help us,” he said.

    NASSI, which has the mandate to  promote MSMEs, was established more than 40 years. It has offices in all states of the federation, including the Federal Capital Territry (FCT).

    CIPE seeks to strengthen democracy around the globe through private enterprise and market-oriented reform.

  • Industrialists, experts seek probe of SMEs’ funds

    Industrialists and experts have urged President Muhammadu Buhari, the Federal Executive Council (FEC) and the Federal Ministry of Finance (FMoF) to investigate funds disbursed by the Central Bank of Nigeria (CBN) to the banks for the development of Small and Medium Enterprises (SMEs) in the last four years.

    Some of the industrialists and experts, including SME owners who spoke with The Nation in separate interviews, said most of the banks demanded a lot of documentation and collateral from SMEs; that after meeting and satisfying their requirements, the banks allegedly allocated the funds to big investors and companies.

    They noted that the development was detrimental to the economic diversification agenda of the Federal Government anchored on the SMEs and urged the president, the FGEC and the ministry of finance to investigate the matter.

    A financial expert and Chief Executive Officer, Golden Hameed Venture, Mr. Gbolahan Adegbesan, said in view of this, there was need for President Buhari and the FEC to direct the CBN to open a window to allow SMEs access funds at lower rates.

    He also called for a downward review of CBN’s Monetary Policy Rate (MPR) to enable the real sector to access more credit from banks and other financial institutions.

    Adegbesan said a review of the MPR would bring about the desired results, considering the fact that the Federal Government needs the small and medium scale industries to boost the economy. He also pointed out that the high interest rates were limiting access to credit by manufacturers and SME owners.

    A small business owner and former staff member of FirstBank Plc, Mr. Sunday Olusoga, said many banks were reluctant to lend to SMEs because many of them could not contain the difficulties of running their businesses profitably, particularly due to the high cost of energy and transportation facilities.

    According to him, “If the lending rates remain high, banks will likely not give credit to SMEs; they will prefer to give to institutional borrowers who have stronger cash flows. For SMEs to become attractive to banks for lending purposes, a lot more needs to be done by the CBN.

    “This is the time for the CBN and the Federal Government to evolve a risk-sharing arrangement to mitigate risks involved in lending to SMEs. This will encourage banks to lend to SMEs because they will not be solely responsible for their weakness and liability.

    “The notion that there would be a lot of spending during the last general elections and increased liquidity in the economy and make it difficult to manage the economy was defeated by the way and manner the administration managed the election. For the first time in the history of our nation, there was no spending spree before, during and after the last general elections.”

    Olusoga said a review of the interest rate would not put pressure on inflation and exchange rates. He urged the CBN to focus more on policy interventions, saying, the CBN needed to come up with policies that will assist the economy to grow above its population growth rate, adjust the MPR and ensure that it reduces the lending rates.

    He said apart from clamouring for a reduction in interest rate, small business owners should synergise and call for an investigation into funds disbursed in the last four years to banks by the CBN for SMEs.

    “We need banks that will target the SMEs alone. The Federal Government should mandate the CBN to empower microfinance banks, exclude big banks from having microfinance banks, monitor the money disbursed and make sure it gets to the SMEs to create massive jobs across the country,” Olusoga said, urging the government to create an enabling environment for the real sector to thrive.

    A lecturer, Dr. Maroof Animashaun, said there should be policies to create linkages between the SMEs and other sectors, such as banking and manufacturing.

    He suggested measures, such as dedicated institutional financing mechanism for the SMEs and the real sector, a comprehensive regulatory policy to delineate the role and responsibilities of the government and the manufacturing sector in the development of the economy.

    A vibrant manufacturing sector, Animasahun said, would also provide jobs for millions of Nigerians and the restive youths across the country.

    He said there was need for a sustained partnership between the banks and private sectors for effective funding of SMEs.

    According to him, the country has not enjoyed the commercial benefits of SMEs because its owners lack the necessary capital.

     

  • Industrialists to Buhari, others: use sector to drive growth

    Some industrialists have charged President Muhammadu  Buhari and the on coming governors to leverage on  the industrial sector to drive growth.

    Rising from a roundtable organised by polythene bag producers in Ibadan, the Oyo State capital, they said the sector should be in the forefront of government plans to achieve rapid growth.

    According to them, addressing the declining fortunes of the sector was imperative to reposition the economy for improved productivity and competitiveness.

    One of the industrialists, Chief Gboyega Alebiosu, said as part of halting the decline of the industrial sector, it was important for the President and governors-elect to hit the ground running by ensuring constant electricity supply.

    Alebiosu said lack of steady and reliable electricity supply remained one of the biggest challenges hindering the growth of factories in the country; that the in-coming administration should prioritise the power sector in the next four years.

    The industrialist clarified that the purpose of the roundtable was not to criticise government, but to set a roadmap for it to address the myriad of challenges holding the industrial sector down in order to drive sustainable and inclusive economic growth.

    “We want to set a roadmap for the in-coming government; we don’t want a situation where government will come in and operate in a vacuum. They should have a document and position on how to drive the industrial sector of the economy,” Alebiosu explained.

    He said after the roundtable,  a comprehensive policy document would be presented to the government on how to drive industrial growth.

    Another industrialist, Mr. Samuel Olaoye, said to boost the manufacturing sector’s contribution to the Gross Domestic Product (GDP) over the next four years, the President and governors-elect should be committed to developing new industrial zones.

    He said the development of new industrial zones had become necessary in view of the fact that industries in Nigeria have had to face headwinds over the past few years, both globally and domestically.

    “In the short term, a range of industries, from building materials to fertilisers, are facing challenges. Nevertheless, the government needs to work on a number of measures to stimulate the sector and place it at the centre of the country’s economic recovery,” Olaoye said.

    He listed some of the measures to include strengthening the manufacturing sector by focusing on Small and Medium-sized Enterprises (SMEs) development, value-added industries and improved financing channels.

    “Governments must also improve the alignment between the skills of young graduates and the demands of the industrial workplace,” Olaoye said, urging the Federal and state governments to initiate programmes that will increase the nation’s overall economic growth.

    A lawyer, Mr. Kehinde Williams, said another critical area of focus to revive the industrial sector and spur growth was the promotion of special economic zones and industrial areas.

    He said there was a need for the in-coming government to review the law setting up the special economic zones to improve the tax and investment incentives offered to investors.

    “Free economic zones encourage international firms to enjoy strategic advantages. Nigeria must emulate other developing countries to provide and offer tax and Customs duty advantages that promote the development of export-oriented operations.

    “Nigeria’s industrial sector should take greater advantage of them to boost the economy,” Williams recommended.

  • Reduce cash reserve ratio, industrialists, others urge CBN

    Some industrialists, manufacturers and farmers have urged the Central Bank of Nigeria (CBN) to reduce the Cash Reserve Ratio (CRR) in order to free up more funds for banks to provide credit to the real sector.

    The CRR is a certain percentage of the total bank deposits that has to be kept in the vault of the CBN, and banks do not have access to that amount for any economic activity.

    Some industrialists and manufacturers, who spoke with The Nation, said the call for a reduction of the CRR became necessary because of the ability of banks to extend credit to businesses had been stifled, having exceeded the 80 per cent loan-to-deposit regulatory threshold.

    For instance, one of the industrialists, Mr. Chief Remi Oladunjoye, observed that at the high prevailing interest rate, access to loan to the industrial sector had remained subdued due to attractive risk-free lending to government to fund its budget deficit.

    Oladunjoye recommended a downward review of the CRR to enable deposit money banks to increase credit facility to the real sector.

    “While this is imperative at this time, the apex bank must first raise its regulatory or oversight efficiency to forestall systemic risk that could be necessitated by high non-performing loan and poor capital adequacy ratio,” Oladunjoye said.

    According to him, inflationary pressure poses greater threat to businesses, adding that the current high inflation rate though decelerating was structurally induced.

    In view of this, he said fiscal instruments to improve business conditions and critical infrastructure such as roads, rail and power are needed to stimulate investment in the near to medium term.

    Oladunjoye explained that Nigeria’s efforts towards economic diversification through the manufacturing and agricultural sectors have consistently suffered setbacks because of grossly inadequate financing structures that have discouraged manufacturers and farmers

    “An estimated 500 million smallholder farming households, representing 2.5 billion people worldwide, rely on agricultural production for their livelihoods, and financial inclusion has been the most difficult challenge of this group.

    “Realising the agric financial challenges, international organisations, foundations and individuals have channelled more resources especially to resource-poor farmers in developing countries. However, agricultural financial inclusion in Nigeria appears elusive,” he said.

    Also, a live stock farmer in Ikorodu area of Lagos State, Mr. Felix Johnson, expressed concerns over lack of access to agricultural loan facilities from financial institutions. He noted that impossible conditions of the loans have made it extremely difficult for farmers to access them.

    “Although, the Federal Government is doing everything possible to empower farmers and the small scale industry, the bureaucracy is a big problem, and interest rate on industrial loan is very high,” Johnson said.

    He also lamented that the nine per cent interest rate obtainable from CBN loans was too high for Nigerian farmers. “If the government is serious, the rate should not be more than five per cent, because if one operates in Nigeria, he has to generate power plus other costs, he added.

    But a financial expert, Mr. Adams Ayodele, said in a bid to enhance access to finance, the First Bank of Nigeria Limited and Access Bank Plc have committed N10 billion to be lent to firms that have good credit ratings.

     

  • Industrialists seek dedicated freight corridor

    Industrialists have urged the Federal Government to modernise rail transport networks and create a Dedicated Freight Corridor (DFC) to serve the industrial clusters.

    They urged the Ministry of Transportation and the Nigerian Ports Authority (NPA) to address the concerns of industries by fixing the rails leading to the ports to facilitate the movement of goods.

    Speaking with The Nation, an industrialist and a former member of the House of Representatives, Mr. Maruf Akinderu-Fatai, said goods worth several billions of naira were transported by members through the ports yearly.

    Viable rail project at ports, the industrialist said, would support hundreds of industries, including cement, fertiliser, pharmaceutical, edible oil, food and a water filtration plant.

    “Rail infrastructure is one of the most important factors for a country’s progress. Although, the country has a large population with its own share of challenges, they can be overcome by energy-efficient technologies and customer-focussed approach

    “The importance of rail transportation in industrial cargo movement cannot be overemphasised. It is the ‘lifeblood ‘ of a nation. If we put the necessary rail infrastructure in place, it will add speed and efficiency to our country’s progress.

    “There is no doubt that good physical connectivity in the urban and rural areas is essential for economic growth,” Akinderu-Fatai said.

    According to him, infrastructural issues, particularly transportation, affect a nation’s progress, so the ports need much faster and efficient transportation systems to meet the target of industrial clusters across the country.

    Also, a member of the Manufacturers Association of Nigeria (MAN) in Ogun State, Chief Ajibola Adesoye urged NPA to bring stakeholders together and address the issues relating to their business.

    He said one of the issues was the delay in fixing the rail and other port infrastructure, which affects industries based on what they go through in clearing their raw materials.

    Adesoye said given the importance of the rail project in meeting the transportation needs, the Federal Government should find a “middle ground”to address the problem of quick evacuation of oods before the end of the second quarter of the year.

    “We do not want the government to shelve the rail project because of its economic importance to the industrial and manufacturing sectors. What we want is either our concerns be addressed or the road infrastructure are developed across the country,” he said.

    Adesoye said MAN’s advocacy campaign was not only aimed at improving the patronage of locally manufactured products by Nigerians, but to also help create more jobs for the youths in the local manufacturing sector by reducing imports.

    An entrepreneur, Mr. Bolarinwa Afuwape, said there was need for the Federal Government to partner  neighbouring countries to ensure that Nigeria’s porous borders are better policed to tackle smuggling and the influx of counterfeit products into the country.

    He urged the government to take action to promote the patronage of Made-in-Nigeria goods and boost the country’s manufacturing sector.

    Afuwape said certain sections of the law should be amended to attract stringent monetary penalties for defaulters, which would serve as deterrent and to protect the quality of goods.

    He added that the major focus of the President Muhammadu Buhari-led administration on the Ease of Doing Business should be on how to increase patronage of locally manufactured goods, as well as to create an enabling environment for the private sector to thrive.

    Afuwape also said the Federal Government should consider the request made by the association for a 35 per cent margin of preference for Made-in-Nigeria products for government procurements, adding that the country has a huge market for locally manufactured products, especially in the textile and footwear industries.

     

  • Industrialists accuse Customs of underhand activities

    Industrialists in Aba, the commercial hub of Abia State, under the aegis of Aba Industrialists Association (AIA), have appealed to the Comptroller General (CG) of the Nigeria Customs, Col. Hameed Ali (Rtd), urging him to call the agency’s officials in the Southeast to order.

    The industrialists accused Customs in the Southeast of extracting double duty charges from importers at the ports in Onne and Port Harcourt. The industrialists also said that after importers have cleared their goods, they are stopped on the way by Customs personnel who say whatever they paid at the ports are insufficient and should be made up there.

    Chairman of AIA, Chief Emma Obi told newsmen in Aba:

    “If one goes to these ports to clear goods, the Customs issues the person a document called PAAR which stipulates the duty payable on the goods. After paying the duty, the officers that would release the goods will now tell the person that the duty you paid, which you have the certificate, will be rejected and raises an additional huge sum of money to your normal duty, claiming that the PAAR raised by the office was insufficient. When the goods eventually leave the port, you must pass Customs checkpoints at Iriebe, Akpojo and Isiokpo, these three places are another war zones for importers of goods in the East. At these places, Customs men who operate under the Federal Operations Unit (FOU) will demand for clearance papers and release notes from the wharf. After receiving all these things, they will now tell you that you underpaid again despite the fact you paid import duty twice at the port.

    “You will think they are joking, the next thing they will do is to push down the driver from the truck and employ a driver…to take it to their headquarters in Owerri, Imo State where they will begin to raise another import duty for the same goods cleared at the port.”

    The spokesperson of the FOU zone C, Owerri, Chioma Onuoha debunked the allegations, saying her office, which is independent of states and ports commands, only seizes goods whose importers underpaid duty. She said that such underpayment arises mostly when the importer under-declares the cost and or quantity of goods imported and when such anomalies are discovered the importer would be made to pay the correct duty.

  • Industrialists accuse Customs of underhand activities

    Industrialists in Aba, the commercial hub of Abia State, under the aegis of Aba Industrialists Association (AIA), have appealed to the Comptroller General (CG) of the Nigeria Customs, Col. Hameed Ali (Rtd), urging him to call the agency’s officials in the Southeast to order.

    The industrialists accused Customs in the Southeast of extracting double duty charges from importers at the ports in Onne and Port Harcourt. The industrialists also said that after importers have cleared their goods, they are stopped on the way by Customs personnel who say whatever they paid at the ports are insufficient and should be made up there.

    Chairman of AIA, Chief Emma Obi told newsmen in Aba:

    “If one goes to these ports to clear goods, the Customs issues the person a document called PAAR which stipulates the duty payable on the goods. After paying the duty, the officers that would release the goods will now tell the person that the duty you paid, which you have the certificate, will be rejected and raises an additional huge sum of money to your normal duty, claiming that the PAAR raised by the office was insufficient. When the goods eventually leave the port, you must pass Customs checkpoints at Iriebe, Akpojo and Isiokpo, these three places are another war zones for importers of goods in the East. At these places, Customs men who operate under the Federal Operations Unit (FOU) will demand for clearance papers and release notes from the wharf. After receiving all these things, they will now tell you that you underpaid again despite the fact you paid import duty twice at the port.

    “You will think they are joking, the next thing they will do is to push down the driver from the truck and employ a driver…to take it to their headquarters in Owerri, Imo State where they will begin to raise another import duty for the same goods cleared at the port.”

    The spokesperson of the FOU zone C, Owerri, Chioma Onuoha debunked the allegations, saying her office, which is independent of states and ports commands, only seizes goods whose importers underpaid duty. She said that such underpayment arises mostly when the importer under-declares the cost and or quantity of goods imported and when such anomalies are discovered the importer would be made to pay the correct duty.

  • Buhari’s cabinet: We are hopeful, say industrialists, investors

    Buhari’s cabinet: We are hopeful, say industrialists, investors

    Amidt growing concern over the delay in the formation of a cabinet by President Muhammadu Buhari’s administration, industrialists and business operators are optimistic that the delay will  augur well for the economy. According to them, it will ensure that only technocrats who are square pegs in square holes make the list, thus boosting investor’ confidence, reports Assistant Editor OKWY IROEGBU-CHIKEZIE.

    It’s probably one of the hottest issues of national discourse, but to many industrialists and business operators, the anxiety over the delay in the announcement of President Muhammadu Buhari’s cabinet is unnecessary.

    Many who spoke with The Nation said contrary to insinuations that the delay in making the cabinet list is slowing down governance and investment decisions, it is better for the administration to take its time to study the complexities of the economy before announcing its cabinet. According to them, this was necessary to ensure a clean break from the past when square pegs were put in round holes, a reference to the appointment of non-technocrats to man key positions.

    The consensus of the Organised Private Sector (OPS), is that in the long run, the delay could turn out a shot-in-the arm for industrialists and other business operators, as the delay would ensure that only those properly schooled in the dynamics of the Nigerian economy are appointed, particularly now that the nation is facing its worst crisis ever. This, in turn, would boost investor’ confidence, guarantee the protection of their investment, and ultimately return the economy on the path of recovery.

    For instance, as former President of the Nigerian Institution of Estate Surveyors & Valuers (NIESV), Mr. Bode Adediji put it, the nation is in transition and so it needs to take time to ensure a dynamic and credible team to tackle the monumental problems confronting her.

    Adediji, who defended the President’s seeming inaction based on his (Buhari’s) anti-corruption credentials, insisted that he must be given enough time to assemble a crack-team for the job.

    Hear him: “Buhari needs to be diligent. A single man cannot effectively fight the war against corruption, or correct the ills of several years of under development. But based on his track record, l am confident that he is working silently for the good of the nation. I also urge his political party to quickly resolve their differences in order to usher in a sustainable change. A situation that they can’t agree on power sharing formula and other things of common interest, is not healthy for the country.”

    A Public Affairs Analyst, Mr. Mahmud Othman,  agreed with Adediji. He said he wouldn’t join the ranks of those criticising the president for not constituting his cabinet yet.

    According to him, “people are finding it very difficult to believe the level of damage to the economy. The transition committee headed by Ahmed Joda made a lot of discoveries. If you appoint ministers without knowing the state of the economy and bringing the right people on board, the economy will run into deeper problems. People are becoming impatient, but l will counsel that we are better off doing the right thing before constituting the cabinet.

    Othman said Buhari didn’t hide his preference to choose the best for the task ahead and not necessarily based on political consideration, but those who can deliver to move the economy forward. He pointed out that the economy is in tatters as can be seen from the various states that can’t pay workers’ salaries, let alone embarking on new projects.

    “Oil money is no longer available. The debt profile is scary. Personally l don’t envy any political appointee especially ministers because the expectations are too high. As a stop gap to the appointment of ministers, the Permanent Secretaries in the ministries are working and no investor will leave because of late appointment of ministers,” he added.

    The Public Affairs Analyst is not done. While disagreeing with those arguing that governance is crawling because of the delay in constituting a cabinet, he insisted that various aspects of governance backed by law are operating as they don’t need ministers to work. He said anti corruption agencies, such as the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices and other Offences Commission (ICPC), have suddenly woken up and are arresting those alleged to be corrupt unlike before. This, he said, is because they have read the president’s body language and known that he is not interested in condoling corruption.

    Othman however criticised the lack of information from the Buhari’s government. While noting that it is a minus to the administration, he said, “Frayed nerves are not calmed because it is a different thing for 36 ministers to be talking from the perspective of their ministries rather than what is obtainable now where nobody is hearing anything that can sooth the nerves of the public and people just believe that governance has taken flight.” He however, encouraged Nigerians to be hopeful and be confident that the Buhari administration will deliver on his campaign promises and that the nation will be great again.

    However, the President’s Special Adviser on Media and Publicity, Mr. Femi Adesina, over the weekend, sought to close the perceived communication gap when he said it will take time to clear the mess created by the Goodluck Jonathan administration. Adesina, in statement, said “It requires scrupulous and painstaking planning to clean the PDP’s Augean Stable.” He also noted that Nigerians were already on the side of the administration, which he said was on course.

    Adesina was reacting to the 30 days appraisal of Buhari administration by the opposition PDP. Its National Publicity Secretary, Mr. Olisa Metuh, had in a statement during the weekend, taken a swipe on the Buhari administration, noting that the enormity of the confusion surrounding the government and the ruling party in the last one month had made it imperative for Nigerians to pray as the success or failure of the Buhari administration would not only affect the President and his party, but also the entire nation.

    The statement by Metuh said: “We urge Nigerians to join hands in prayers and offer useful suggestions to President Muhammadu Buhari and the APC because with what we have seen in the last 30 days, the present administration is finding it very difficult to get its bearings right while showing no inclination towards implementing its numerous campaign promises for which they were voted into office at the centre. We are deeply worried that the President, who promised to unveil his cabinet two weeks after his inauguration, has not been able to decide on key appointments, such as ministers, Secretary to the Government of the Federation (SGF), Chief of Staff and advisers in key sectors of the economy.”

    Metu said the delay has brought government business in ministries, departments and agencies to a dangerous standstill with coordination of important policies vested on ministers and the SGF now in tatters while the system drifts. According to him, the situation is taking its toll on the economy, which has in the last 30 days witnessed unprecedented decline with a terrifying crippling of foreign and domestic investments, including activities in the money and capital market sectors. He said under Buhari, for instance, the stock market has lost over N238 billion while the All-Share Index fell by 849.87 basis points as at June 19.

    For Director-General, Lagos Chamber of Commerce and industry (LCCI), Mr. Muda Yusuf, there is no clear indication on the position of the government and investors need to know the direction the administration is going to avoid creating doubt in the minds of the public. By now, there should have been clear direction in key sectors of the economy such as energy, oil and gas, monetary and fiscal policies. The problems of uncertainty have persisted in the economy and the issue of conjecture has persisted in the economy with people guessing at what the government is planning as far as policy direction is concerned,” he told The Nation.

    While pointing out that people are not insisting on full implementation of the administration’s blue print on the economy, he said there is need for investors to have a bearing on what to expect in the new dispensation. But the thinking of other operators in various sectors is that the delay in constituting a cabinet was informed by the realities on ground particularly the need to get things right.

    For instance, apart from the need to clear the rot inherited from the previous administration, the crisis in the National Assembly over the choice of principal officers as well as the need to prune down the number of ministries and parastatals, The Nation learnt, are also responsible for the delay. But the consensus is that by the time the cabinet is eventually constituted, Nigerians and the economy would be better for it.

  • Industrialists await Buhari’s economic plan

    Industrialists await Buhari’s economic plan

    Industrialists in Lagos are awaiting the economic blueprint of President Muhamadu Buhari.

    Lagos Chamber of Commerce and Industry (LCCI) President Remi Bello indicated the position of the industrialists in a statement yesterday.

    He said the private sector eagerly awaits Buhari’s economic blueprint that will define the policy direction of his administration.

    “This is important for policy clarity, strategic planning, investment decisions and investors’ confidence. Major business decisions have been put on hold over the past six months because of the political risk associated with a transition regime.

    “The first half of the year was characterised by profound uncertainty which slowed down the momentum of economic activities in the country,” Bello said.

    The private sector, he explained, would like to see an unveiling of economic blueprint of the Buhari administration, especially in the areas of oil and gas sector reform, intervention in the power sector, current regime of investment incentives as well as monetary policy thrust focusing on exchange rate management, inflation and interest rate.

    Others are mode of monetary policy, automotive policy and its sustainability, trade policy covering tariffs, import prohibitions, waivers etc.

    Bello also harped on the need to have a clear and sustainable tax policy, debt management, including the direction of the Federal Government’s budget and the privatisation of development finance institutions.

    Other areas the administration must focus on, according to the LCCI boss, are: “Common External Tariff (CET) recently adopted by Economic Community of West African States (ECOWAS); sectoral policies to drive growth and economic diversification; key initiatives to reduce the cost of doing business; the status of legacy debts and contractual obligations, contractor arrears, outstanding subsidy payments, salary arrears, legacy projects, port reforms etc.”

    He advised that the momentum of economic activities needs to be rebuilt in earnest with better expenditure quality, constructive spending priorities, transparency in the governance process, enhanced security of life and property, investment-friendly policies, promotion of democratic ideals and the primacy of rule of law”.

    Bello added that the new political dispensation offers a great opportunity to bring about the desired change in all facets of national life – the economy, social sector, quality of life, value orientation and governance quality.

    He urged the new administration to take full advantage of its goodwill to immediately begin the charting of a new course for the country and the economy.

  • ‘Multiple taxation hurting industrialists, businesses’

    ‘Multiple taxation hurting industrialists, businesses’

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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