By Funmi Komolafe
It was a meeting of minds in Lagos last week, when the organized private sector under the auspices ofÂ the Nigeria Employers Consultative Association ( NECA) hosted the finance minister, Mr. Olusegun Aganga.Â The meeting was different from the usual reading of addresses.Â For the private sector, it was time to present a case to the government on the challenges to their businesses and why white collar jobs will continue to elude thousandsÂ of able and qualified Nigerians.
Labour Vanguard which was at the meeting, in this edition,Â shares with readers some of the views expressed at theÂ meeting.
PresidentÂ ofÂ NECA , Chief Richard UcheÂ introduced the organized private sector as one which â€œparadesÂ the real operatorsÂ in the economyÂ with membershipÂ strength of over 5000 businessesâ€.Â Â He acknowledged that government has always expressed the desire to create a conducive atmosphere for businesses to flourish.Â However, the evidence is quite contrary to the stated objective .
He said â€œThe IkejaÂ Â andÂ Iganmu industrial areasÂ of the past, Bombai and ChallawaÂ industrial estates in Kano have all turned into relicsâ€.
Chief Uche said government and the private sector should be asking each other, â€œWhat went wrong ?Â To avoid the real sector sinking deeper, he said, both parties need to be â€œâ€ be sureÂ we have the right answers before weÂ reel out fresh policy initiatives and actions to save the real sectorâ€.
Our Challenges- The managing director ofÂ Flour Mills , Dr.Â E.A. UkpabioÂ presented the challenges of the private sector most inflicted on the sector directly or indirectly by the government and its agents.
Power-Â Since it is known to government and indeed all Nigerians that lack of power hasÂ limited the productionÂ capacity of our industries and consequently put a seal on job opportunities, the OPS acknowledgedÂ governments efforts to provide electricity in the interim, Dr. Akpabio said, â€œGovernmentÂ should give those who provide their own power for manufacturing some reliefâ€.
Relief in which area, you want to ask?Â Akapabio who spoke for others said, â€œ| specifically,Â those who buyÂ big generators for manufacturingÂ and haveÂ proof of delivery to their factories shouldÂ be given tax incentives and rebate in tariff.Â The Nigerian Electricity Regulatory Commission ( NERC) should not bother companies that are generating power purely for their own consumption with any tax/levy burden as they are currently doing â€“ hiding under the registration of equipmentâ€.
The minister, Mr. Olusegun Aganga simply told theÂ businesses owners which included foreign investors that governmentâ€™s efforts on power would soon yield positive results.
Specifically,Â AgangaÂ said â€œWe met with international oil companies involved in powerÂ projects earlier this week.Â They voiced their concerns to us and we are looking at ways to encourage their investments in the power sector.Â Â These consultations are on-going with concrete deliverables and timelinesâ€.
Infrastructure/ Taxes -Â Â Â If you ever thought that the poor state of our roadsÂ isÂ the exclusive headache of drivers, you are deadÂ wrong.Â Employers alsoÂ want our roads to beÂ motor able and safe.Â Also linkedÂ Â to the stateÂ of our roads is the issue of charges.Â Though he suggested thatÂ â€œ it would cost less to fix our roadsâ€. It was clear that the real problemÂ remains the charges on our roads.
Dr. Akpabio said â€œ The harassment byÂ different local and state governments through which our vehicles pass is one problemÂ that we wish to appeal to government to address.Â Government needs to embark on the need for clarity on charges â€œ.Â He identified the Lagos state government as one that has taken the right step in this direction, therefore he said, â€œGovernment needs to embark on the need for clarity on charges; just the way the LagosÂ State Government published charges.â€
On this issue, the OPSÂ suggested, â€œStreamline revenue collection generally ; only one authority on a single matterâ€.
Raw Materials-Â ThisÂ is one area in which Finance Minister, Olusegun Aganga saidÂ Â Â Nigeria is richly endowed.Â How did he arrive at this conclusion?Â He recalled a discussion he had with a major foreign investor here whom he asked why he decided to retain his business in Nigeria .
The unnamedÂ Chinese chief executive of the company located in Nigeria ,Â saidÂ ” Nigeria has a market of 150 million people and raw materials to become a truly industrial nationâ€.
However, government policy on raw materials remains a disincentive to the real sector and Dr. AkpabioÂ put it bluntly.Â â€œThere is need for government to reduce duty on raw materials and spare parts.Â If we want to create more jobs for Nigerians, organisations that are investing in expansion or new lines of businessesÂ should beÂ granted duty reduction on raw materials that are unavailable , insufficiently available like palm oil and spare parts.Â We expect duty on raw materialsÂ and spare parts to be below 5% by nowâ€.
Value Added Policy – Mr.Â ShenxÂ Ladipo, managing director of Lishabi Mills Ltd-Â called forÂ a value added policy from the federal government.
He said,Â Non-regulation of local raw materials exposes local industry to vulnerability in the global market, thereby limitingÂ the capacity to provide sustainable jobs for Nigerians.
He suggested.Â â€œSome necessary steps to be taken include :Â DiscouragingÂ the exportation of local raw materials,Â whenÂ the local industry has not been satisfied, introducing export tax on some items, while tax incentives can be given to thoseÂ who export processed itemsâ€
In addition, he said,, â€œexporters must demonstrateÂ that local industriesÂ Â have been duly satisfied before exportation can be encouraged.Â Â This is not likely to affect the priceÂ to the local producers but will rather ensure that local processing is encouragedâ€.
Industries would thus be encouraged to focus on exportationÂ of processed products, which translates to more jobs for Nigerians in addition to export earningsâ€.
Over Regulation-Â Although government has made it clear that the economyÂ has beenÂ Â Â Â Â liberalised andÂ market forces dictate the pace, business owners believe government is guilty of over-regulation.
Organisations such as Standards Organisation of Nigeria ( SON), National Agency for Food and Drugs Administration and Control (NAFDAC),Â National Environmental Standards and Regulation Enforcement Agency ( NESREA), Consumer ProtectionÂ Council ( CPC), State Environmental Protection Agencies etc with serious overlapping jurisdiction .
Dr. Akpabio said the OPS believe that â€œSON, NAFDAC and State Environmental Protection AgenciesÂ should suffice.Â Government agencies should not have the power to close down factories without court order to do so.Â Powers being wielded by the regulatory agencies are too gruesome and in most cases leading to abuse, and wanton threats and disruption of production activitiesâ€.
Anyone familiar with the operations of these agencies would not but share the views of the OPS on these agencies.Â Indeed , some of them have come to see closure of factories as the surest way to get media attention and â€˜pleaseâ€™ the powers that be in Abuja who in turn see them as hard working.
TAXÂ Administration -Â This was another area,Â the private sector asked government to address urgently.
Dr. Akpabio said, â€œmost tax laws are outdated and need to be reviewed in the light of current realitiesâ€.
Sounding more like a trade unionist, Dr. Akpabio said â€œThe tax reliefs / allowances granted for PAYE requireÂ urgent review.â€â€
For instance he said, â€œWhile schoolÂ fees have increased astronomically, the tax allowance for four childrenÂ had remained N10,000.00 over the years.Â The relevant bill in this regardÂ pending before the National AssemblyÂ should be given the prompt attention it requires in order to make the tax administration and collection less prone to errors and manipulationâ€.
Indeed tax administration is an area is which government agencies are quick to pass the guilty verdict on citizens and corporate organisations butÂ governmentÂ has failed in its duty to bring tax administration in line with modern realities.