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Tag: LCCI

  • LCCI: Dangote’s $2b refinery project’ll boost downstream

    The Organised Private Sector (OPS) under the auspices of Lagos Chamber of Commerce and Industry (LCCI) said Dangote Oil Refining and Petrochemicals will transform the downstream oil sector of the petroleum industry.

    Beyond that, the group said the economic benefits of the oil refinery, when completed would have  far reaching positive effects on the lives of Nigeria and her people.

    Speaking after leading members of the group on a tour of Dangote Jetty, Refinery and Fertilizer plants in Lagos,  LCCI President Babatunde Paul Ruwase said the project is massive and its impact would be spectacular.

    He expressed satisfaction with  the pace of work at the Refinery and Fertilizer plants, which he described as a game changer for the oil sector.

    He commended the President/Chief Executive of Dangote Group, Alhaji Aliko Dangote for the enormous investment in Africa.

  • Ports’ gridlock: Economy losing over N2.5t, says LCCI

    The Lagos Chamber of Commerce & Industry (LCCI), Centre for International Private Enterprise (CIPE) and the Organised Private Sector (OPS), have said the economy is currently losing about N600 billion in customs revenue, $10 billion on non-oil export and about N2.5 trillion corporate earnings across sectors.

    LCCI President,  Babatunde Paul Ruwase, who spoke at the launch of  “Maritime Ports Reform in Nigeria: Executive Summary and Recommendations,” in Lagos yesterday said, industrial capacity utilisation currently stands between 38-40 per cent, saying  about 40 per cent of businesses located around the Lagos ports environs have either relocated to other areas, scaled down operations, or completely shut down.

    He said the condition of the ports  have huge adverse implication for job creation, tax revenue and real economic activities, with estimated downside effect of about three per cent on the country’s GDP.

    Ruwase said the report highlighted a worrisome level of deliberate resistance by some Ministries, Departments and Agencies (MDAs) to implement and enforce enabling regulations, including the 2017 Presidential Executive Orders relating to ports.

    On their concerns, he regretted that 65 – 80 per cent of import clearance and export processing time, are caused by delays induced by MDAs as majority of the cargoes take between 5 – 14 days to clear, while some take as long as 20 days or more to clear.

    He said about 5,000 trucks currently seek access to the Lagos ports on daily basis, while the port and its access roads were designed to take about 1,500 trucks daily.

    He said the situation as deplorable as it is, has led to : “ Astronomical increase of trucks transport cost by 200 to 500 per cent over the last two years, longer cargo dwell time, disruption of production schedules of manufacturers, as raw materials are not delivered to factories in good time.

  • Initiate SME growth policies, LCCI tells government

    The Lagos Chamber of Commerce and Industry (LCCI) has called on the government at all levels to initiate and implement policies of growing the Small and Medium Enterprises (SME) as it growth engine of the economy.

    The President of LCCI, Babatunde Ruwase, who made this call on Thursday in Lagos at the 2018 LCCI Members’ Day Exhibition and Networking, noted that SMEs were key drivers of economic growth.

    He stated that the chamber would continue to advance innovative means of serving the interest of the sector through trade promotion and policy advocacy for a better operating environment.

    He promised that LCCI would continue to support and sponsor programmes capable of yielding ample value and benefit to its members and the Nigerian business public.

    President noted that the Members’ Day offered a unique exhibition, integration and networking opportunity for the members of the chamber across all sectoral groups, adding that the chamber saw great investment opportunities originating from stronger business alliances which would lead to job creation, technology transfer, wealth creation and economic growth.

    Also speaking, the Chairman, Membership and Welfare Committee, LCCI, Sonoma Ajumogobia, stated that the fair which started six years ago was borne out of LCCI’s quest to progressively showcase SMEs products and services for competitive advantage.

    He said; “We hope that in doing this, especially for our Micro Small and Medium Enterprises (MSME) member companies, we would have added some value to them by giving them some advantage over their competitors.”

    The Lagos State Commissioner for Commerce, Industry and Cooperatives, Olayinka Oladunjoye, promised that the State was commitment to creating the much needed enabling environment as it would aid business prosperity.

    The Director of Commerce, Hakeem Adeniji, who represented Oladunjoye, stressed that government had implemented friendly policies and infrastructure to promote business growth and economic development in the State.

    Commending LCCI for its advocacy role, the commissioner said the interactions would improve their product quality, profitability and economic growth of the state and Nigeria.

  • LCCI: Nigeria’s economy still in doldrums

    THE Lagos Chamber of Commerce and Industry (LCCI)  has said the economy is still in the doldrums.

    It said the latest report of the National Bureau of Statistics (NBS) showing decline in the performance of the economy in the second quarter (Q2) of this year was a confirmation of the true state of the economy.

    LCCI Director-General Muda Yusuf, said with a population growth of three per cent and gross domestic product (GDP) growth of 1.5 per cent, there is a reason to worry about the wider implications of the  increasing level of poverty across the country.

    He said the positive performance of the service sector underscored its critical importance and prospects to the economy, stating that it contributed 54.64 per cent of GDP and 44.67per cent of total employment, besides being largely driven by indigenous players.

    He however lamented the poor performance of the manufacturing and agric sectors, despite the attention given to the agric sector by both the monetary and fiscal authorities. Yusuf said the decline in performance of the agricultural sector from three per cent in Q1 2018 to 1.19 per cent in Q2 could be attributed to recent security challenges, which affected many farming communities across the country.

    He said access to credit in the sector  is low due largely to the nature of risk inherent in the sector.

    With regards to manufacturing, Yusuf said: “The real sector is still grappling with serious productivity challenges arising from the constraint of infrastructure, particularly power and logistics. It is imperative, therefore, that there should be greater investment and policy focus on improving logistics and enhancing the power sector.”

    He said the manufacturing sector also slowed from 3.39 per cent in Q1  to 0.68 per cent in Q2 because of infrastructure deficit, logistic challenges, including the Apapa gridlock, access and cost of credit, weak purchasing power and multiple taxation.

    Recognising the huge contribution of the oil sector that accounts for over 87.91 per cent of foreign exchange (forex) earnings,  he said the dip was as a result of production related issues.

    The LCCI chief said to reverse the declining trend in the GDP, there is need to sustain the momentum in the implementation of the ease of doing business of the government,  saying that this would help to bring down the operational cost of investors. He called on the government at all levels to double their efforts to improve the state of infrastructure.

    He said the state of infrastructure has continued to take a toll on investment across all sectors, pointing out that the impact was more pronounced on manufacturing and the agric sector.

    Also, the Chairman, Policy Committee and former Chairman of Electrical Group of Manufacturers Association of Nigeria (MAN), Reginald Odiah, faulted the report which suggested that the country has exited recession. He said the economy is not completely out of recession, arguing that the saving grace is that more money is coming in from the oil sector.

    He said: “If you look closely at it most businesses have closed down, saying: “I am not seeing clear policy direction and political will to bring the country completely out of recession.’’

    The government is simply focusing attention on the 2019 general election. The truth is at the slightest mistake, the country would plunge back into deep recession.”

    Also, the former Director-General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and United Nations Industrial Development Organisation (UNIDO) consultant, Dr. John Isemede, wondered how NBS can suggest that Nigeria is out of recession with the first quarter growth as 1.95 per cent while the second quarter recorded 1.5 per cent.

    He said: “The Chamber noted that the trade sectors are still in negative territory even though there was a slight improvement as there was reduced contraction. This is indicative that the consumers are still under pressure due to weak purchasing power, which has been compounded by inflation, high cost of goods and services, low disposable income, delays in payment of salaries in the public sector, the continued naira exchange rate effect and high import duties on many consumer items”.

    He argued that the NBS figures clearly showed that the country is not out of recession and may likely go back into recession if the right recovery policies are not only put in place but also properly managed.

  • LCCI faults FIRS on freezing tax defaulters’ accounts

    The Lagos Chamber of Commerce and Industry (LCCI) has faulted the  decision of the Federal Inland Revenue Service (FIRS) to appoint banks as collecting agents and freezing the accounts of tax defaulters.

    Its Director-General, Muda Yusuf, said the move was premised on the powers conferred on it by Section 31 of the FIRS Act, which gives it power to appoint collection agents for the recovery of tax payable by the taxpayer.

    While urgin discretion and caution before its implementation, he said the provision is draconian and could be used as a tool to intimidate, coerce and harass taxpayers

    He said LCCI is a strong proponent of regulatory compliance by private sector players but noted, however, that it was important to understand that tax administration should agree with  the rule of law and the fundamental principles of a good tax system.

    He said: “Tax administration should be consistent with the basic principles of equity, fairness, legality and accountability.  LCCI is concerned about the recent turn of events, especially the freezing of accounts of bank customers based on tax assessments that are in dispute.  This development raises a number of key concerns which need to be urgently addressed.”

    He faulted the propriety of appointing banks as ‘Collecting Agents’ by the FIRS, given the strategic and catalytic role of the banks  in business operations, financial intermediation and transactions among economic players.

    He called for an exhaustive engagement between the tax authorities and the taxpayer, noting that the legality of freezing the accounts of bank customers by banks on the directive of FIRS for alleged tax liability, given the contractual relationship between the banks and their customers should be studied.

  • LCCI kicks against freezing tax defaulters’ accounts

    The Lagos Chamber of Commerce and Industry (LCCI) has kicked against the  decision of the Federal Inland Revenue Service (FIRS) to appoint banks as collecting agents and subsequent freezing of the accounts of taxpayers considered to be in default of tax payment.

    Its Director-General, Muda Yusuf, said the move was premised on the powers conferred on it by Section 31 of the FIRS Act, which gives it power to appoint collection agents for the recovery of tax payable by the taxpayer.

    While asking for discretion and caution before its implementation, he noted that the provision is draconian and could be used as a tool of intimidation, coercion and harassment of taxpayers

    He stated that LCCI is a strong proponent of regulatory compliance by private sector players but noted, however, that it was important to underscore that tax administration should be in consonance with  the rule of law and the fundamental principles of a good tax system.

    He said: “Tax administration should be consistent with the basic principles of equity, fairness, legality and accountability.  The LCCI is concerned about the recent turn of events, especially the freezing of accounts of bank customers based on tax assessments that are in dispute.  This development raises a number of key concerns which need to be urgently addressed.”

    He faulted the propriety of appointing banks as ‘Collecting Agents’ by the FIRS, given the strategic and catalytic role of the banking system in business operations, financial intermediation and transactions among economic players is suspect.

    He called for an exhaustive engagement between the tax authorities and the taxpayer, noting that the legality of freezing the accounts of bank customers by banks on the directive of FIRS for alleged tax liability, given the contractual relationship between the banks and their customers should be studied.

    Yusuf said the Chamber is concerned on the appropriateness of imposing a lien on funds, which may not necessarily belong to the alleged defaulting company as there is a preponderance of third party funds in the accounts of many businesses.

    He further stated that the organised private sector (OPS) is concerned with the disruptions to businesses of account holders as a result of sudden freezing of accounts for alleged default in tax payment, adding that this could cause irreparable reputational damage to businesses.

    On the implication of this to businesses, the LCCI boss said it would pose a risk to financial inclusion as Small and Medium Enterprises (SMEs) may avoid the use of banks for their transactions.

    On other implications, Yusuf stated that it’s risk to liquidity in banking, may lead to expropriation risk, including adverse implications for investors’ confidence resulting from a negative perception about tax administration in the country and a probable surge in migration of SMEs from the formal to informal sector.

    He advised FIRS and the banks to exercise utmost restraint in the adoption of this tax revenue recovery strategy because of the grave implications for investors and the economy. The damage to the economy may be much more than the contemplated revenue, he added.

  • How to make ECOWAS trade liberalisation work, by LCCI

    The Economic Community of West African States (ECOWAS) Trade Liberalisation Scheme is supposed to be the operational tool for promoting intra-regional trade and boosting economic activities. However, some aspects of its implementation appear to have made the realisation of its objectives difficult, particularly for real sector operators. But the Lagos Chamber of Commerce & Industry has suggested ways to make the scheme work. Assistant Editor OKWY IROEGBU-CHIKEZIE reports.

    Members of the Lagos Chamber of Commerce & Industry (LCCI), particularly exporters, are literarily up in arms against Economic Community of West African States (ECOWAS) Trade Liberalisation Scheme (ETLS) administration. Their grouse: the ETLS, under its current management by the Foreign Affairs Ministry, is not serving exporters’ and other real sector operators’ interests well.

    They noted, for instance, the difficulties in exporting goods from Nigeria to other West African countries as a result of bureaucratic bottlenecks of product registration under the scheme, negate ETLS objective.

    The ETLS is the main operational tool for promoting free trade within the West African sub-region. The scheme was in line with the regional trade bloc’s objective of establishing a common market through trade liberalisation by abolishing, among member states, Customs duties on imports and exports and abolishing non-tariff barriers.

    It was envisaged that a free trade area will, among others, increase intra-regional trade, boost economic activities and increase the sub-region’s competitiveness in the global market. However, the administration of the scheme, under its current management of the Foreign Affairs Ministry, has come under criticisms by the LCCI and other real sector operators.

    Some of them, who spoke with The Nation, lamented that bureaucratic bottlenecks have made product registration extremely difficult for exporters. They insisted that to mitigate exporters’ sufferings, ETLS’s administration should be moved from the Ministry of Foreign Affairs to the Ministry of Industry, Trade and Investment, specifically the Nigeria Investment Promotion Commission (NIPC) to serve exporters better.

    LCCI President Mr. Babatunde Paul Ruwase, who pushed that the scheme’s administration be excised from of the Foreign Affairs Ministry, however, identified other gray areas that needed to be smoothened if Nigerian exporters must benefit fully from the scheme. He said, for instance, that there is need to address the multiplicity of foreign exchange (Forex) rate in the economy.

    Ruwase lamented that the gap between the Central Bank of Nigeria (CBN’s) N305 rate and other rates at N360 and above, has continued to create undue arbitrage for banks and transparency issues. “The supply side of electronic forex market, transfers and card transactions are still being compelled to surrender their forex at N305 rate instead of N360. This will continue to discourage forex supply through these channels,” he said.

    The LCCI, according to him, therefore, recommends that this arbitrage opportunity be closed by applying Bureau de Change (BDC) rate to forex supply transactions in the inward transfer and card transactions segments.

    Ruwase also said efforts should be made to build external reserves further to hedge against potential decline in the price of oil. “This can be achieved by attracting larger investment inflows from Nigerians in the Diaspora and foreign direct investors looking to participate in Brownfield and Greenfield infrastructure investment in Nigeria,” he added.

    The LCCI president also drew attention to excise duty on locally- manufactured goods. While recalling that the government recently commenced the enforcement of the approved amendment to the excise duty rates for alcoholic beverages, spirits and tobacco in Nigeria, he expressed the Chamber’s worry over the move to extend the duty to cover several other basic items.

    Ruwase lamented that the Nigerian Customs Service (NCS) excise duty list on its website was inclusive of many basic and essential products such as soap and detergent; toilet papers; cleansing or facial tissue and Spaghetti/Noodles.

    Noting that these are products consumed largely by ordinary Nigerians, he, however, argued that any the imposition of excise duty on them would further aggravate the poverty situation in the country and undermine the welfare of citizens. This, according to him, is particularly so, considering the fact that poverty incidence in the country was already over 60 per cent.

    He further lamented that the planned extension of excise duty to soaps and detergent will invariably increase their prices, make them inaccessible for the common man, and further heighten their plight amidst the current economic challenges that have reduced their purchasing power.

    The LCCI chief said excise duty rates penalises domestic production and incentivises importation, which conflicts with the vision of the Economic Recovery and Growth Plan (ERGP) regarding economic diversification, job creation and local value addition. He also made a case for tax incentives to manufacturing firms.

    Pointing out that the manufacturing sector is one of the most vulnerable sectors in the Nigerian economy, he said the sector is already grappling with several challenges that have continued to undermine its productivity and competitiveness.

    Ruwase listed some of them to include high operating cost, high energy cost, consumers’ weak purchasing power, unfriendly tax environment, high regulatory compliance cost, and influx of smuggled products and high cost of logistics.

    He argued that if the government cannot give tax incentives to manufacturing firms, it should not impose additional tax burden on them, given the challenging operating environment for production in the economy.

    According to him, it is even worse when such burden is on necessities consumed largely by the ordinary people. He said the LCCI was requesting an urgent rethink of the proposition to increase or impose excise duty on the production of basic needs in the economy.

    He also spoke on the outcome of the recent CBN Monetary Policy Committee (MPC) meeting, noting that although, the monetary policy rates were retained, making it the 10th retention of the rates by the MPC, this may not be unconnected to the CBN’s worry about the risks to inflation, exchange rate, foreign reserves and capital flows.

    While asking that priorities be given to job creation and poverty reduction, which he claimed are the cardinal programmes of the present administration, he said low interest rate will stimulate investment, impact positively on growth, create more jobs, increase income, and boost output, which will ultimately have a moderating effect on inflation.

    His words: “We commend the creation of a single digit interest rate window through the issuance of commercial papers by the large corporates, especially for the real

     

  • LCCI: low interest rate ‘ll stimulate investment

    The Lagos Chamber of Commerce and Industry, LCCI, yesterday said to ultimately have a moderating effect on inflation, there is need for low interest rate which will stimulate investment, impact positively on growth, create more jobs, increase income and boost output.

    In a Media briefing  on the state of the economy, LCCI President , Mr. Babatunde Ruwase said the chamber notes the decision of the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) at its meeting

    of 23rd and 24th July 2018, adding that, Monetary policy rates were retained, making the 10th retention of the rates by the MPC.

    “This was underpinned by the worry of the CBN about the risks to inflation, exchange rate, foreign reserves and capital flows.

    However, times like these calls for prioritization in favour of stimulation of investment and growth.  This meant giving priorities to job creation and poverty reduction, which are cardinal programmes of the present administration”

    “We commend the creation of a single digit interest rate window through the issuance of Commercial Papers by the large corporate, especially for the real sector.  It is gratifying that this window also offers long term facility of up to seven years tenure.  This is salutary, and we commend the CBN for the bold move.

     

     

     

     

  • LCCI pushes for strong PPP

    The Lagos Chambers of Commerce and Industry (LCCI) Director-General, Muda Yusuf, has urged the government to strengthen public-private partnership (PPP) framework.

    This, he said, would stimulate interest and greater investment from the private sector, including foreign investors.

    Yusuf spoke at the 10th yearly distinguished lecture organised by the Nigeria Institute of Quantity Surveyors (NIQS) in Lagos.

    According to the LCCI DG, since the government is not in a position to put money on every project, strengthening the PPP framework will ensure that the needed funds are made available by the private sector to bridge the yawning infrastructure gap  in the country.

    The lack of effective PPP framework, he argued, had made it difficult for would-be investors to partner the government on big projects. “How do you expect a person to investment over N1 billion in a project and then suddenly, the project is scuttled by the government due to lack of standard framework?” he queried.

    While calling on the government to reconsider the high tariff on construction equipment, Yusuf said if this was done, the multiplier effect of investment in the construction sector is more than what the crude oil sector will generate, because it has more local involvement, like artisans, masons, than in the oil sector.

    He rued the high interest rate charged by local banks as a bane for the industry.

    “Funding construction projects with money from our banks is  impossible because the banks give short term funds, but high interest rate. This cannot work because the construction sector is a long-term thing,” Yusuf said.

     

  • LCCI frowns at tariff hike on detergents, noodles, others

    The Lagos Chamber of Commerce and Industry (LCCI) has frowned at increased tariff on essential items such as detergent, toilet papers, facial tissue, Spaghetti and Noodles.

    The Federal Government recently commenced the enforcement of the approved amendment to the excise duty for alcoholic beverages, spirits and tobacco.  LCCI in a statement signed by its Director General Mr. Muda Yusuf, expressed worry over government’s move to extend the duty to cover several other basic items.

    He said: “For instance, the Nigerian Customs Service (NCS) excise duty list on its website is inclusive of many basic and essential products such as soap and detergent; toilet papers, cleansing or facial tissue; and Spaghetti/Noodles. These are products consumed largely by ordinary Nigerians. Any imposition of excise duty on these products would further aggravate the poverty situation in the country and undermine the welfare of citizens.  Already poverty incidence is well over 60 per cent in the country.”