The Nation Newspaper

Tag: OPS

  • OPS decries effects of bad Apapa roads on businesses

    OPS decries effects of bad Apapa roads on businesses

    The Organised Private Sector ( OPS )  has urged the Federal Government to find a lasting solution to the problem of bad access roads to Apapa ports in Lagos which is affecting the cost of businesses.

    The OPS spoke on Wednesday at a conference in Lagos on the Petroleum Industry Bill and the impact of bad roads in Apapa on businesses.

    The OPS comprises Nigeria Employers’ Consultative Association ( NECA ), Manufacturers Association of Nigeria ( MAN ) and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture ( NACCIMA ).

    The others are the National Association of Small and Medium Scale Enterprises ( NASME ) and the National Association of Small Scale Industries ( NASSI ).

    Mr Segun Oshinowo, Director-General of NECA, said many companies would close shop if Apapa roads remained bad.

    “The OPS is concerned about access roads to the Apapa ports. It is affecting overhead costs of businesses of  our members.

    “Preventable accidents as a result of the bad roads lead to huge loss of revenues; loss of jobs and closure of businesses. This will further worsen trade facilitation,’’ Oshinowo said.

    He advised the government to create alternative roads, put measures in place to free traffic and proffer lasting solutions to gridlocks in Apapa.

    On the Petroleum Industry Bill, Mr Segun Ajayi-Kadiri, Director-General of MAN, advocated creation of two regulatory bodies for the petroleum industry as against one body recommended in the Petroleum Industry Governance Bill ( PIGB ) before the National Assembly.

    Ajayi-Kadiri said that there was the need to avoid “costly mistakes’’ that could work against reforming the sector.

    Read also: Fed Govt to shut depots over Apapa gridlock

    According to him, one of such mistakes is a provision in the PIGB for a single regulator for the industry.

    He said that two regulatory bodies – one for the upstream and another for the downstream – would serve the sector better.

    “A cursory look at some of the provisions of the PIGB revealed the likely emergence of the Petroleum Regulatory Commission (PRC) – an omnibus commission that will be empowered to regulate the entire petroleum sector.

    “We do not share the view of the Assembly on creation of a regulator for a sector that is not homogenous in its activities and deliverables.

    “The idea of a single regulator for the whole sector runs contrary to industry standards which by default already provides for an upstream and downstream regulator, ‘’ Ajayi-Kadiri said.

    The director-general of MAN said that the responsibilities of the proposed commission was too wide as it cut across various value chains in a key sector of the economy.

    He commended the National Assembly for taking steps to reform the petroleum industry through the PIGB, and called for accelerated actions.

    NAN

  • ‘OPS ‘ll oppose duplication of VAT, taxes ’

    ‘OPS ‘ll oppose duplication of VAT, taxes ’

    Nigeria Employers’ Consul-tative Association (NECA) has expressed displeasure at attempts by the government  to strangulate businesses through multiple and duplication of taxes and levies in the country.

    It specifically took a swipe at the enactment of Kano State Revenue Administration (Amendment) Law 2017, which imposed Consumption Tax on goods and services bought or rendered in a hotel, restaurant, eatery, bakery, takeaway, suya spot, shopping mall, store, event centre and other similar businesses in the state.

    Reacting to the law, NECA Director-General Mr. Olusegun Oshinowo,  said: “The imposition of Consumption Tax by Kano State amounted to a duplication of Value Added Tax (VAT), which our Laws frown against, as stated by the Supreme Court in the case of Attorney-General of Ogun State vs. Aberuagba and Ors.

    “We do not agree with the imposition of such tax due to the existence of Value Added Tax (VAT) in the country. This is because VAT is a consumption tax collectible by the Federal Government (and shared among the states) in respect of sale of goods and provision of services within the Federation.”

    Oshinowo said in response to this, NECA has instituted an action to challenge such imposition by Kano State government.

    He explained further that the cause of the recent development is the Taxes and Levies (Approved List for Collection) Act (Amendment) Order 2015, which several states are misinterpreting and now leveraging to enact laws that clearly amount to and promote duplication of taxes. This trend, according to him, is spreading like wild fire, going by the recent actions of Kogi and Delta states, just to mention but a few.

    The initiative, he said, is killing business, wealth creation and entrepreneurship, adding that it is equally a clear disincentive to foreign direct investment.

    He said: “While the private sector is not opposed to taxation, it is, however, against illegality and unreasonable taxes through imposition of multiple taxes as well as duplication of taxes. The private sector will not accept a duplication of VAT in any guise, irrespective of the name given to it by state governments”

  • Delta to OPS: invest in education

    The Delta State government has called on the private sector as well as public spirited individuals and organisations to partner with it in its efforts to develop the education sector in the state.

    The state’s Commissioner for Basic and Secondary Education, Chiedu Ebie, made the call yesterday in Warri during the handing over ceremony of the structurally upgraded and refurbished Ifiekporo Community Primary School, Warri, by Matrix Energy Limited.

    Ebie, who was represented by a principal officer of the ministry, Paul Okpala, said the state governor, Dr Ifeanyi Okowa, had designed a special programme, tagged the Support-A-School Programme (SASP), to specifically open a window to organizations like Matrix Energy, to participate in the administration’s vision to make learning conducive to children in the state.

    In his remark, the Chief Operating Officer of Matrix Energy, Loqman Salam-Alada, said the project to upgrade and refurbish the school’s facility was part of the company’s Corporate Social Responsibility to the host community.

     

  • ‘OPS must support anti-corruption war’

    ‘OPS must support anti-corruption war’

    Chief (Mrs.) Nike Akande is the current president of the Lagos Chamber of Commerce and Industry (LCCI). In this interview with Yetunde Oladeinde, the two-time Minister of Industry speaks about the anti-corruption crusade of the present administration vis-à-vis the lingering economic recession, the prospects and challenges of managing the affairs of the oldest Chamber of Commerce in the country, her passion for mentoring youths on entrepreneurship and more. Excerpts: 

    How would you describe the anti-corruption war by the present administration?

    Corruption, in all its facets, is the single most endemic factor constraining Nigeria’s economic, social and institutional potential. I fully subscribe to the ongoing anti-corruption effort of this administration. This is needed to lay a solid institutional foundation for the sustenance of local production and entrepreneurship. It is important that the private sector supports and collaborates with this administration in any way to rid the nation of the scourge of corruption, be it in the public or private sector.

    What is life as president of the Lagos Chamber of Commerce and Industry like?

    The Lagos Chamber of Commerce and Industry (LCCI) is a great institution with impressive track record over the last 129 years. Thus, having the opportunity to lead this great institution is exciting and it comes with huge responsibility. As the president of LCCI over the last 18 months, I have dedicated myself to build on the achievements of my predecessors and their noble efforts by sustaining business policy advocacy and engagement activities. This is to ensure that LCCI remains the number one voice of the private sector in Nigeria. I am committed to the task of working with all stakeholders to improve the ease of doing business in Nigeria.

    Lagos is the nation’s commercial nerve center what does the celebration of the state at 50 mean to the Chamber?

    The Chamber is glad to celebrate the giant strides in Lagos over the past five decades culminating into its emergence as the centre of excellence and a mega city in Nigeria. So, it has been a great journey of vision and success. Lagos accounts for an estimated 70% of industrial output; 70% of general commerce and 75 % of financial services in the country. It is commendable that this is a state whose internally generated revenue (IGR) accounts for about 70 % of its revenue and whose budget performance has always topped 75 to 80 % in the last few years. There is always another ladder of progress to climb. But no one would deny that Lagos has been an ideal cosmopolitan city that has given hope and succour to people and businesses across the country and the world.

    What are some of the achievements of LCCI?

    LCCI has sustained advocacy and engagement activities and has emerged as the number one voice of the private sector in Nigeria by contributing to the improvement of the business environment in the country and in Africa as well. Through our trade promotion platforms such as the Annual Lagos International Trade Fair (the biggest and the best in West Africa) and sectoral exhibitions, we have been able to showcase local products and home grown innovations of our young men and women. We have done this over the last 30 years.

    I will not forget to mention the LCCI Entrepreneurship Mentoring programme, a corporate social responsibility (CSR) initiative, which enables us to groom and pair aspiring young entrepreneurs with successful businessmen in the Chamber as their mentors. This programme has produced about 245 young entrepreneurs over the last five years with track record of product innovations, job creation and local value addition by participants.

    We have been able to attract new and quality members from all sectors of the economy to join the Chamber and ensure that LCCI remains the undisputed largest Business Membership Organisation (BMO) in Nigeria and Africa.

    Today, LCCI has become the private sector power-house for market research, business information and destination of first choice for both local and foreign investors. This is achieved through our innovative thought leadership programmes, research, publications and market intelligence.

    How is the recession affecting the organisation?

    The economy slipped into recession after suffering for two consecutive quarters in 2016. Since then, the economy has remained slow and challenging for all stakeholders, especially the private sector. We are affected by weak and declining purchasing power, high unemployment, weak investor confidence, drop in sales and private sector profitability, low and declining capacity utilisation, among others. High energy cost, escalating cost of transportation, high interest rate and weak exchange rate have all impacted on productivity and competitiveness across all sectors of the economy. We hope to see the economy rebound before the end of 2017.

    What is LCCI doing to harness the potential of Lagos as a hub of commerce?

    LCCI is working hard to optimally represent the mix of business leaders across all ranks of private sector operators not just in Lagos but across the country Nigeria. For instance, the annual Lagos International Trade Fair, which the chamber has hosted consistently in the past 30 years, had provided huge opportunities and platforms for businesses to thrive and stimulate the growth of the Nigerian economy. Also, due recognition is now given to major CEOs of top corporate organisations within the Chamber. Younger generation of top CEOs are encouraged to take up membership of Council and deliberate policy to encourage the younger generation of entrepreneurs in the Chamber is being pursued.

    What are the challenges and how do you hope to cope with them?

    The Chamber has provided timely business information, intervention in cases where members have problems with government agencies, created more opportunities for networking and visit member companies more regularly to get familiar with their operations and challenges. Being the first Chamber of Commerce in Nigeria means that LCCI cannot settle for less and living on its past legacies. The organisation is very determined to take its long years of accomplishments to the next level. Thus, over the next few years we are set to reinvent our true leadership role in Nigeria by redefining our focus and activities in line with global best practices.

    How would you assess the performance of female entrepreneurs in the country today?

    Women entrepreneurs are not afraid of taking risks and are two times more likely to take above average risks than their male counterparts. They possess very strong business ideas and seek to share their business ideas with others who may benefit from their discoveries. I can confirm that while there are women running large businesses, however, most economically active women are still concentrated in micro and small enterprises in the informal sector with low productivity and returns. Women will do better in business if their access to finance is wider and easier. A woman’s access to financing is access to dignity, security for a family and for a generation.

    Let’s talk about the memorable moments in your life and your career?

    I am extremely grateful to God. I have been very lucky in life but I must say that it is not without hard work. The most memorable moment in my life was when I was made a Minister. That was many, many years ago. I didn’t lobby for it. It came as a surprise to me. I was recommended by people and I really thank God. Why I really appreciated this was that I was not even in Nigeria when it happened. I do some consultancy work for the United Nations Development Fund for Women, commonly known as UNIFEM, at that time in Ghana. I was there when my name was announced on television. That was BBC and CNN in those days; they announced that I had been named as one of the ministers. So, the ambassador was looking for me that was the ambassador in Ghana. My husband told him that I was already in Ghana because I always told my husband about my movement. So, he came, took me away from the hotel where I was staying and brought me back to Nigeria. That was very, very memorable for me.

    You were a Minister twice, what was the second experience like?

    Yes, I was Minister twice. Even the second time was memorable to me. The first time wasn’t for too long because the President died. So, they had to dissolve the cabinet. So, I was just getting settled in my private sector life when I was reappointed. And I thank God for this.

    What about the memorable moment in your life?

    I have been very lucky in life. I have been well cared for. Even as a young girl. I come from a family of four girls, not a polygamous family. My father had only one wife and my mother had four of us, all girls. My mother died many years before my father. She died at the age of 49 while my father died at the age of 72 and I was the oldest of the children. So, from a young age, I have been made to be a responsible person, looking after my siblings because my father refused to remarry. He was always calling us his angels.

    Let’s talk about what you consider as the greatest influence in your life?

    The greatest influence for me is my upbringing. I was brought up in the proper way.  I respect people because I feel that it is the way you treat people that you would be treated. This has helped me in life. People say that I smile a lot, it is my nature. If you look in the mirror and you smile, what do you get back. It’s a smile and that is so in life. People are very nice to me too because I am also very nice towards them.

    What are some of the principles that you hold onto?

    Like, I said earlier, the number principle for me is that you have to treat people well. The second principle that has helped me over the years is that you have to work hard. There is no secret to success in life without hard work. Nothing else. Not even your looks. The looks would help, but hard work is the real secret.

    A lot of young people are not thinking like that these days. What advice do you have for them?

    Yes, a lot them are not thinking this way. Unfortunately, they usually learn the hard way. That is why when they see people like us, who are not so young still making waves, then they know that it is nothing but hard work. I start my day as early as 5.am and I do not sleep till late. There is always something for me to do. I thank God because God is always hearing my prayers. I guess it is all because I have a good heart towards people and they always repay me with something good. I have had many successful things in life through people, without me lobbying and I always thank God.

    Would you say that you have achieved all your dreams?

    Yes, I am working (walking) my dreams. I have achieved my dreams. I am a happy person and I am extremely grateful to God for what He has done for me. Another person that I want to mention is General Olusegun Obasanjo. When the former Head of state made me a trustee of his Presidential Library, I was pleasantly surprised because the man has very high standards. He doesn’t just put anybody anywhere. So, I know that I must be doing something very right. And I thank God for directing my direction, for having something that the Papa of the nation can appreciate.

    You have a very hectic schedule and there are days you want to take a break. How do you relax?

    You know I am very busy and any time I have the opportunity to travel, either locally or internationally, I would just take a few days and just relax. I have been to a health farm before and they taught us how to relax. So, I know how to relax and pamper myself. They have taught me the tricks and I always take advantage of the knowledge I got from them.

    Do you have an exercise regimen?

    I do exercise but not the rigorous type. I actually have a small gym in the house. You know, I am not so young and so I have to be careful. I do little exercise and I know that exercise is very good. You have to do it, the blood must flow. I also do the water therapy, first thing in the morning. Sometimes, I take water with lemon or lemon juice. I try as much as possible to eat well. You know it is not easy with my type of lifestyle, I am exposed to too much food. From breakfast meeting to buffet at lunch, buffet at dinner and because of this, I am always very careful. I choose what I eat but sometimes, I just let go.

  • OPS differs on 5% Road Fund

    Members of the Organised Private Sector (OPS) seem to differ on the merits of the proposed five per cent Road Tax aimed at revolutionalising the road sector.

    While some agree that it is a global best practice to ensure sustainable funding of roads and the most viable model of generating development fund, others say the additional petroleum levy will further escalate the already high cost of living.

    The reports of the Senate Committee on Works recently came out with a Bill for an Act to establish the National Roads Fund. The report stated that it would be used to finance the sector.

    The N5 petroleum levy per litre on any volume of petrol and diesel products imported into Nigeria and on locally-refined petroleum products will be used to partly fund the proposed National Roads Fund.

    The Director-General, Lagos Chamber of Commerce & Industry (LCCI), Mr. Muda Yusuf, said the concept of a road fund was desirable, noting that one of its advantages is the easy collection.

    Besides, the fund, he said, is progressive because the rich consume more fuel than the poor and will, therefore, pay more.

    Yusuf, however, said the dilemma is Nigerians’ perception of fuel as a social product because of the long history of government involvement in pricing.

    He said: “Economic rationality is one thing, political expediency is another. But ultimately this is the way to go. Funding the road infrastructure through the annual budget will not give the economy the quality of road infrastructure that we deserve.

    “The truth is that the economic cost of poor road infrastructure in Nigeria is phenomenal. The Small Medium Enterprises (SMEs) and the generality of the citizens will gain more from the creation of a road fund and the consequential impact on road infrastructure.”

    The LCCI boss said that presently, over 90 per cent of freight and the movement of persons in the country are by road. According to him, poor road infrastructure is a major factor in the current high cost of goods and services in the country, especially agricultural products.

    He argued that good roads would improve the linkages between the rural areas and the cities, and between the various economic zones in the country.

    He also stated that it would facilitate the integration of the domestic economy, spur growth, increase incomes, enhance productivity and lead to the creation of more jobs.

    But the President, Manufacturers Association of Nigeria (MAN), Dr. Frank Udemba Jacobs, disagreed, citing harsh economic environment.

    He said, for instance, that given the current macroeconomic challenge of high inflation rate, negative national output growth and dampened aggregate consumption due to erosion in real income of the consuming public, additional petroleum levy will further escalate the already high cost of living.

    Jacobs said: “This (5% road fund) will further depress aggregate consumption as real income of Nigerians will further decline. The effect will be a slowdown in business activities across all categories – Micro, small, medium and large businesses alike.

    “I would therefore, advise the government to have a re-assessment of the implications of the proposed action on the fragile and slowly recovering economy.”

    The MAN president advised government to engage the private sector more in infrastructure development through concessional arrangement such as Build, Operate and Transfer (BOT) especially in road and rail construction and operations. This, he said, will free some funds for other fiscal responsibilities.

    Jacobs, however, stressed that the importance of infrastructure to the development and growth of the economy cannot be over-mentioned. According to him, good roads and other economic infrastructure are no doubt critical to the manufacturing sector.

  • OPS invest $118b in ICT in 10 years

    Members of the organised private sector have invested over $118billion in the building of information and communication technology (ICT) infrastructure in the country in the last one decade, The Nation has learnt.

    Giving this insight at the weekend was Olusola Teniola, a computer and information engineer.

    Speaking in an interview with The Nation, Teniola, who is the President of the Association of Telecommunications Companies of Nigeria (ATCON), said the private sector alone is the main contributor of investment in Nigeria when it concerns ICT infrastructure.

    Specifically, he said: “The private sector has invested more than USD$68bn in telecoms infrastructure alone in just over a decade. IT systems investments are also in the high USD$50bn plus in the wider ICT space.”

    While lamenting that the federal government “Lacks the will-power or the financial capacity to fund all ICT developments across all sectors,” Teniola who also doubles as the Managing Director/CEO of Internet Solutions Nigeria, a pan-African information communication technology (ICT) firm, further observed that the lukewarm attitude by the federal government towards the development of the ICT sector was a serious cause for concern.

    “Until ICT is viewed as a critical sector in the development of our nation in this millennium, it is always going to be treated as a peripheral in the wider society. Our reliance on oil & gas as the sole foreign exchange earner is a major inhibitor in us changing our mindset. In other advanced societies, innovation, technology superiority and science are viewed as key essentials to the development of any countries future existence – this begins right from the age of five years old,” he admonished.

  • Akwa Ibom, OPS chart course for MSMEs

    Akwa Ibom, OPS chart course for MSMEs

    The Akwa Ibom State Government and members of the Organised Private Sector (OPS) have met on the way forward for Small and Medium Enterprises (SMEs).

    At a National Enterprise Development Workshop in Lagos, Akwa Ibom State Governor Udom Emmanuel said most countries transformed their economies by prioritising the Medium, Small and Micro Enterprises (MSMEs), saying that Nigeria should support and provide a conducive environment for MSMEs to thrive.

    The workshop organised by Hudson Group and Small and Medium Enterprise Development Agency (SMEDAN) was co-sponsored by the Akwa Ibom State Government.

    Emmanuel, represented by his Commissioner for Information and Strategy, Mr. Charles Udoh, said opportunities were numerous for MSMEs to use. He added that in the last 10 years, the Akwa Ibom State government has invested a lot in infrastructural development and security, and made the environment conducive for investment.

    “The Akwa Ibom State government is committed to providing the enabling environment across different sectors of the economy.

    “Our MSME operations are youth-based, because we know the youths are the future of the world and what we have done is to empower the younger generation by equipping them with the requisite knowledge and skills to run their own businesses,” Udoh said.

    He cited the Akwa Ibom Enterprises and Employment Scheme (AKEES) tailored towards empowering youths. According to him, the state has trained over 4,000 youths  to stand on their own.

    His words: “I am here to showcase the state’s investment and tourism opportunities. In the last two years, Akwa Ibom has been driving these two sectors because we know we have the massive infrastructure that tourist could utilise and we also know the state’s revenue is predominantly oil-based.”

    Udoh pointed out that with the price of oil dwindling, the state government thought of the urgent need to diversify the state’s revenue base to other revenue-yielding opportunities.

    “We have been diversifying our state’s revenue base through agriculture, industrialisation, man power development and the likes. This is just one opportunity that we are trying to use to sell the potentials we have in Akwa Ibom State,” he stated.

    At the event, the Director-General, Small &Medium Enterprises Development Agency of Nigeria (SMEDAN), Dr. Dikko Umaru Radda, said the number of persons employed by the MSMEs’ sub-sector as at December, 2013, stood at 59,741,211, representing 84.02 per cent of the total labour force.

    Underscoring the importance of the sector, he stressed that MSMEs’ contribution to the Gross Domestic Product (GDP) in nominal terms stood at 48.47 per cent as at the period under review, while its export contribution accounted for 7.27 per cent.

    On the agency’s activities, Radda said it is involved in designing programmes and projects, creating the appropriate platforms and partnerships for addressing some known constraints of MSMEs.

    He, however, advised that to properly position and develop this all-important sub-sector, all the challenges militating against its optimal performance must be deliberately confronted.

    He said: “Though, MSMEs in Nigeria are still largely informal in nature, they have contributed immensely to the national economy. Several common but limiting factors have however constrained them over the years.

    “These include poor access to useable funds, capital, difficulties in procuring raw materials, lack of access to relevant business information, difficulties in marketing and distribution of products.”

    Radda, represented by the Director of Enterprise, Mr. Wale Fasanya,  listed   low  technological capabilities, high cost of transportation, and communication as problems caused by cumbersome and costly bureaucracy in getting necessary approvals or licences and policies and regulations that generate market distortions among the major draw backs.

    The SMEDAN chief noted that in the face of the economic recession, MSMEs were expected to serve as catalyst for reversing the downslide.

    “This expectation is certainly not misplaced, but would have been more justifiable if an enabling environment can be provided for each of the over 37 million MSMEs,” he added.

    Also speaking, Director, Hudson Group, Mr. Tom Iseghohi, said the event was organised as an event between the Federal Government and the private sector, because the MSME sector remained the engine room of most economies including Nigeria.

    He maintained that MSMEs already provide 70 per cent of the jobs and 80 per cent of Nigeria’s GDP. Iseghohi, however, said the sector was faced with lots of obstacles. “This event would go a long way to chart the way forward to address these challenges.

    “We have brought together the best private sector minds and some Federal Government minds from the state level, international bodies to brainstorm and deploy the strategy that would lead to the sector’s growth.

    “This sector will have massive impact on employment, GDP, exchange rate and the likes,” he said, adding that the main problem SMEs have is lack of access to technical capacity, funding and markets.

  • CBN, OPS at war over N50 stamp duty

    CBN, OPS at war over N50 stamp duty

    Apparently irked by the continuous imposition of the N50 stamp duty by the Deposit Money Banks, members of the organised private sector (OPS) are warming up for a serious legal battle with the Central Bank of Nigeria (CBN) and others, The Nation has learnt.

    The Nation can authoritatively report that the OPS, including the Nigeria Employers’ Consultative Association (NECA), Manufacturers Association of Nigeria (MAN), the Lagos Chamber of Commerce and Industry (LCCI) and others are already speaking with their lawyers to take the necessary legal action against the CBN, the Federal Inland Revenue Services (FIRS) and the 22 banks to stop the collection of N50 from customers as stamp duty charges.

    At separate interviews with The Nation at the weekend, some of the leading lights of the OPS including Dr. Frank Jacob, President of MAN, Mr. Muda Yusuf, the Director General of the LCCI and Director General of NECA, Olusegun Oshinowo, expressed readiness to seek legal redress over what they described as “arbitrary charges and levies” by the banks acting in league with the CBN.

    Firing the first salvo, Jacob said: “Obviously we’re not happy with the imposition of the N50 stamp duty because we don’t think this is the right time for that considering the state of the economy now. We’re in a recession and as such, we shouldn’t be thinking about increasing burden on the operators of the economy. We’re discussing with our lawyers to see how we can pursue this matter successfully in court. The legal action is an option we’re definitely considering.”

    Echoing similar sentiment, Yusuf said: “I’m not in the true picture of the idea of going to court. We’re not happy with the imposition of the N50 stamp duty. But as to the extent of going to court, we’re not directly involved with that. But I can tell you that the position of the OPS with regards going to court to argue this matter is being spearheaded by the NECA.”

    On his part, Oshinowo revealed that NECA had concluded plans to head to court to demand that an order be issued to the government agencies to stop forthwith the collection of excess stamp duty charges, which it said has been leading to a deduction of excess 75 per cent outside what is statutorily allowed by the FIRS Act.

    “Surprisingly, neither the CBN nor FIRS had instructed the banks and other revenue collecting outfits to stop the collection of the illegal stamp duty,” the DG said.

    He said anytime the relevant agencies decided to obey the law, his organisation would demand for a refund to all individuals and organisations already affected by the act of disobedience to the court’s rulings on the matter.

    The law allows N20 stamps duty reduction on every payments exceeding N1000, but the banks are currently deducting N50.

    However, speaking with the CBN acting Director, Corporate Communications Department, Isaac Okoroafor, he said the apex bank was not involved in the N50 stamp duty matter.

    A visibly angry Okoroafor said: “If it’s N50 stamp duty you’re talking about, you may have to call NIPOST. It’s not the business of the CBN. It is the business of NIPOST please. CBN has nothing whatsoever to do with stamp duty.”

    The Federal Court of Appeal had in the matter between Kasmal International Services Limited, a firm owned by Senator Buruji Kashamu and Access Bank and 23 others, directed all deposit money banks to discontinue the illegal charging of N50 per transaction in lieu of stamp duties.

  • OPS, MAN, CBN disagree over $2.83b disbursement claim to members

    OPS, MAN, CBN disagree over $2.83b disbursement claim to members

    The Central Bank of Nigeria (CBN)  has disbursed $2.83 billion foreign exchange (forex) to manufacturers, but members of the Organised Private Sector (OPS), including Manufacturers’ Association of Nigeria (MAN) areclaiming that their inability to access forex has forced some members out of business.  OKWY IROEGBU-CHIKEZIE writes on the manufacturers’ disagreement with the CBN.

    There are rough edges in the relationship between the Central Bank of Nigeria CBN) and the Organised Private Sector (OPS). The bone of contention is the management of forex exchange (forex) by the former.

    The apex bank announced last Thursday that it disbursed $2.83 billion for utilisation in the critical sectors of the economy between December, last year and January.

    CBN spokesman Isaac Okoroafor listed manufacturing, raw materials and agriculture among others as beneficiaries of the disbursements, targeted at strengthening the economy.

    But the OPS faulted the CBN claim, describing it as bogus. The OPS insisted that manufacturers could not have been the sole beneficiary of the $2.83 billion, if indeed such funds were disbursed.

    The other sectors of the economy must have been major partakers in the largesse, the OPS said.

    In the breakdown, Okoroafor said the CBN released $609 million and $228 million for raw materials in December and January. Manufacturers got $53 million and $71 million during the same period. The CBN spokesman said the forex utilisation indicated that $1.839 billion and $0.989 billion respectively, were extended to critical sectors.

    Forex allocations have been marred with alleged irregularities. Only prominent manufacturers allegedly have access to forex. Thousands of thousands were forced to shut down their businesses and relocate to neighbouring countries.

    The OPS, especially the Manufacturers’ Association of Nigeria (MAN), has been critical of the forex policy and the ban on 41 items classified as raw materials that could be sources locally. Such policies, MAN said, was not only hurting its members but the economy.

    Other hurdles being faced by the manufactures include: power instability, security challenges and multiple taxation, all of which it said pushed up production costs in the country.

    A tomato puree manufacturer, Erisco Foods Limited, cried out last year under what it called ‘unfriendly’ forex policy by the CBN and inclement business environment.  The Chief Executive Officer of the company, Chief Eric Umeofia, told a news conference in Lagos that he was relocating the manufacturing segment of his business to China, from where he will import finished products for sale in Nigeria.

    He explained that his decision to close the Nigerian manufacturing plant was taken after the expiration of a 30-day ultimatum given by the management of the company to the Federal Government to compel the CBN to make available enough forex to aid the importation of raw materials and other requisite equipment to keep manufacturing plants running on profit.

    The CBN, however, accused the Erisco Foods’s chief of cheap blackmail. It said Umeofia was raising a false alarm.

    Investigations by The Nation showed that contrary to the  claim that Erisco Foods did not receive support from the Federal Government, the company got support of about N3 billion from the Commercial Agriculture Credit Scheme (CACS) between 2014 and 2016.

    His allegation that NAFDAC, SON, the Ministry of Industry, Trade & Investment and the CBN were frustrating has also been faulted.

    The Nation learnt the Erisco Foods got N500 million in January 2014 for the importation and installation of four additional tomato processing lines to its existing three lines and to stockpile raw materials for operational efficiency.

    The intervention fund with 32-month tenor was sourced through Stanbic IBTC Bank, a document showed.  Also, in May 2014, it received another N400 million as working capital and for the purchase of diesel, gas, payment of salaries and local raw materials including sugar, salt, potassium, solvent, cartons and other packaging materials.

    The document also showed that Erisco Foods was reported to have received additional N300 million. Also in December 2014, the company allegedly received N800 for the procurement of raw materials. The facilities had a separate tenor of 36 months.

    In April, last year, Erisco Food got N1 billion to finance the procurement of processing machinery for fresh tomatoes into concentrate. The fund, with 84-month tenor, was sourced from Keystone Bank Limited.

    The document reads: “The N2 billion facilities given to the company were intended for capital importation, while the extra N1 billion was advanced to the company on the company on the premise that it was going to be used for the purposes of starting primary production through backward integration, using locally produced tomatoes from indigenous farmers.

    “As at today, this has not been achieved. Erisco is only importing and packaging tomato paste concentrates into final products.”

    A source at one of the Participating Financial Institutions (PFIs) through which the CBN disbursed the funds to beneficiaries, confirmed the disbursement of facilities to companies, including Erisco, between between June 2014 and April 2016.

    A CBN source, who pleaded for anonymity, said the apex bank does not allocate forex anymore.

    The source said: “By practice, we do not join issues with individuals on matters of this nature. All I can tell you is that the CBN does not allocate foreign exchange. All business persons, manufacturers, traders, among others, are expected to approach their respective banks to bid for, and obtain foreign exchange. Whether they succeed or not is their business. No amount of blackmail through paid advertorial or sponsored reports could make the CBN change its policy.”

    The claim was corroborated by a special adviser the CBN Governor on Financial Markets, Emmanuel Ukeje, on a television programme in a response to allegations that the regulator was breaching its forex administration policy.

    Ukeje expained: “I want to state categorically that the CBN does not deal directly with any bank customer on any foreign exchange transaction. These transactions are purely between the deposit money banks and their customers.”

    The source urged forex applicant to follow the due process instead of deploying blackmail and other unethical schemes in their ploy to win public empathy.

    Umeofia, who criticised the CBN and other government agencies for not supporting his business, blamed the government for lack of clear policies towards manufacturing, high interest rates and allowing the importation of tomato paste.

    MAN President Dr. Frank Udemba Jacobs faulted the CBN position on the controversial $2.83 billion allocation. In a chat, Jacobs said it was incorrect for the CBN to claim to have allocated such funds to manufacturers.

    According to him, the regulator ought to have explained how the $2.83 billion was shared to beneficiaries in the past two months.

     Round tripping claims

    Responding to the accusation of round tripping levelled against some manufacturers and how the association can monitor the ultilisation of the forex allocated to them, the MAN president described the allegation as baseless.

    He wondered how manufacturers, who do not have enough forex for the importation of raw materials and machinery, could be accused of round tripping.

    Jacobs said: “Any trader with connection can claim to be a manufacturer and have access to forex when the real manufacturers are starved of it. The government should therefore do more work in this area to identify those who are really into manufacturing from traders.”

    On why the naira value continued to nosedive, the MAN chief blamed the free fall of the local currency against the dollar on CBN failure to adequately fund forex. He described the liquidity in the forex market as very low.

    Jacobs declined to comment on Erisco Foods’ allegation against the CBN, saying that he could not speak for any of the parties. He, however, noted that the apex bank claimed to have given the company some funds for the importation of raw materials and equipment for their local production.

    The Director-General of the Lagos Chamber of Commerce & Industry (LCCI), Mr. Muda Yusuf argued that the CBN should be blamed for the alleged round tripping by ‘manufacturers’. According to him, the regulator incentivised the illegality, thus making it attractive for those who may be engaged in it.

    Yusuf said: “The black market rate for the dollar as at today (weekend) is N507 to a dollar. What the bank should do is to close the gap with the official rate which hovers around N300 to make round tripping unattractive if indeed it is happening. The disparity between the official and black market rate created incentive for round tripping.

    “Anybody can claim to be a manufacturer. What the CBN should do is to allow the market to determine the rate and value of the naira. Some government policies are also hurting the economy. For instance, people should be allowed to bring in their forex freely without restrictions.

    The government has placed a lot of hurdles on the path of portfolio investors and Foreign Direct Investment (FDI). There is no way we can come out of the economic problems behooving the nation except there is a review of some of these hurtful policies.”

  • OPS to Fed Govt: economy worsening

    OPS to Fed Govt: economy worsening

    •Manufacturers seeks policy consistency

    Worried by the worsening economic situation, the Organised Private Sector (OPS) yesterday urged the Federal Government to arrest the drift, which it said was adversely affecting operators.
    The President of the Manufacturers Association of Nigeria (MAN), Frank Udemba Jacobs, raised the alarm in a presentation on behalf of the OPS to Acting President Yemi Osinbajo at the second Presidential Business Forum at the State House in Abuja.
    The OPS is made up MAN, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigeria Employers’ Consultative Association (NECA), Nigerian Association of Small and Medium Scale Enterprises (NASME) and Nigerian Association of Small Scale Industries (NASSI).
    After listing the sector’s various challenges, Dr. Jacobs urged the Federal Government to revive the economy; revitalise the industrial sector, grow MSMEs and create employment opportunities.
    He identified the Central Bank of Nigeria (CBN) Foreign Exchange (forex) policy as a major challenge to businesses in the real sector of the economy in the past two years.
    Jacobs said: “Access to forex has been a major challenge to businesses in the last two years. We are aware, and commend the government on the various steps taken to resolve this issue including the standing directive by the CBN to Banks to channel minimum 60 per cent of available forex to manufacturers.
    “The challenge this policy is currently facing is that there is inadequate monitoring mechanism to ensure that the policy achieves its desired result of allocating the stipulated percentage of forex to bonafide manufacturers.
    “The CBN list of 41 items is made up of 440 tariff lines. Thirty-one out of the CBN list of items not valid for forex contain 393 tariff lines which are finished products. Those finished products may be retained on the list of items excluded from the official foreign exchange market.
    “The remaining 10 items of 47 tariff lines are essential industrial raw materials that are either not readily available locally or there is a yawning gap between local production and national demand. Our position was made known to the Presidential Reconciliation Committee on this matter through the minister of Finance in 2016.”
    Noting that the group supports the push for diversification of the economy and resource-based industrialisation policy, the MAN chief advocated for policy consistency for sustainability.
    He said: “We strongly recommend that all major economic policies of government geared towards diversification of the economy should be backed by law to ensure commitment and prevent reversals.
    “We also recommend that the Nigerian Industrial Revolution Plan (NIRP) should be the pillar of the effort at diversifying the economy.”
    Jacob’s urged the government operationalise the Development Bank of Nigeria and recapitalise the banks of Industry (BoI) and Agriculture (BoA) to broaden their capacities for long- term funding at not more than five per cent interest rate.
    He restated MAN’s opposition to European Union/ Economic Community of West African States (EU/ECOWAS) Economic Partnership Agreement (EPA), saying the greement would lead to de-industrialisation.
    “The implication of this, if entered into”, he said, “is that the economy will remain a provider of raw materials and an importer of finished products. Our concern is premised on the fact that from all parameters, West African states, including Nigeria, are not at the same level of economic development with any European country for us to conclude a reciprocal trade relationship as espoused in the EPA.”
    He commended the government for not signing the EPA and urge advised against its endorsementuntil the ultimate concerns raised have been addressed.
    The group urged the government to further ensure compliance with its policy on patronising Made-in-Nigeria products by Ministries, Departments and Agencies (MDAs).
    “Your Excellency, we believe that patronage of locally produced items would help to create employment and encourage local manufacturers. Our expenditure in favour of imported products is detrimental to the growth of local industry as it increases employment in the country of origin and simultaneously increases poverty in our land”, he said.
    According to the body, the N1 billion for works and N100 million for goods thresholds approved by the Bureau of Public Procurement (BPP) for local companies/suppliers, should be adjusted to N30 billion for works to reflect the current realities of the economy.
    Applauding the government’s effort in ensuring the implementation of the 2016 Budget in respect of disbursement for capital projects and its proposal in the 2017 Budget, the group said the resources alone will be inadequate to ûnance the infrastructural gap, estimated by the African Development Bank at $300 billion.
    The group urged the government to create the necessary regulatory framework for private sector investment in infrastructure and ensure effective utilisation of the Public Private Partnership (PPP) model.
    On the need for seamless coordination and synergy between fiscal and monetary policies in driving the economy, MAN said: “More than ever before, it is now critical to concentrate our best efforts at ensuring that alignment of these policies is targeted at creating an enabling environment for industries to thrive, improving productivity of labour and disposable incomes for workers.”
    In his opening remarks, Osinbajo said: “The main plan of our economic plan is the sustenance of the robust private sector partnership. Indeed, it is our strong believe that sustenanable economic growth is only possible if it is private sector led and a great of attention has been paid as you will possibly find in sustaining private sector leadership especially in the plan of economic recovery and growth plan 2017 which is to be launched next month.