Why jobs remain scarce – Employers

By Funmi Komolafe

It was a meeting of minds in Lagos last week, when the organized private sector under the auspices of  the Nigeria Employers Consultative Association ( NECA) hosted the finance minister, Mr. Olusegun Aganga.  The meeting was different from the usual reading of addresses.  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 thousands  of able and qualified Nigerians.

Labour Vanguard which was at the meeting, in this edition,  shares with readers some of the views expressed at the  meeting.

President  of  NECA , Chief Richard Uche  introduced the organized private sector as one which “parades  the real operators  in the economy  with membership  strength of over 5000 businesses”.   He acknowledged that government has always expressed the desire to create a conducive atmosphere for businesses to flourish.  However, the evidence is quite contrary to the stated objective .

He said “The Ikeja   and  Iganmu industrial areas  of the past, Bombai and Challawa  industrial estates in Kano have all turned into relics”.

Chief Uche said government and the private sector should be asking each other, “What went wrong ?  To avoid the real sector sinking deeper, he said, both parties need to be “” be sure  we have the right answers before we  reel out fresh policy initiatives and actions to save the real sector”.

Our Challenges- The managing director of  Flour Mills , Dr.  E.A. Ukpabio  presented the challenges of the private sector most inflicted on the sector directly or indirectly by the government and its agents.

Power-  Since it is known to government and indeed all Nigerians that lack of power has  limited the production  capacity of our industries and consequently put a seal on job opportunities, the OPS acknowledged  governments efforts to provide electricity in the interim, Dr. Akpabio said, “Government  should give those who provide their own power for manufacturing some relief”.

Relief in which area, you want to ask?  Akapabio who spoke for others said, “| specifically,  those who buy  big generators for manufacturing  and have  proof of delivery to their factories should  be given tax incentives and rebate in tariff.  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 – hiding under the registration of equipment”.

The minister, Mr. Olusegun Aganga simply told the  businesses owners which included foreign investors that government’s efforts on power would soon yield positive results.

Specifically,  Aganga  said “We met with international oil companies involved in power  projects earlier this week.  They voiced their concerns to us and we are looking at ways to encourage their investments in the power sector.   These consultations are on-going with concrete deliverables and timelines”.

Infrastructure/ Taxes -    If you ever thought that the poor state of our roads  is  the exclusive headache of drivers, you are dead  wrong.  Employers also  want our roads to be  motor able and safe.  Also linked   to the state  of our roads is the issue of charges.  Though he suggested that  “ it would cost less to fix our roads”. It was clear that the real problem  remains the charges on our roads.

Dr. Akpabio said “ The harassment by  different local and state governments through which our vehicles pass is one problem  that we wish to appeal to government to address.  Government needs to embark on the need for clarity on charges “.  He identified the Lagos state government as one that has taken the right step in this direction, therefore he said, “Government needs to embark on the need for clarity on charges; just the way the Lagos  State Government published charges.”

On this issue, the OPS  suggested, “Streamline revenue collection generally ; only one authority on a single matter”.

Raw Materials-  This  is one area in which Finance Minister, Olusegun Aganga said    Nigeria is richly endowed.  How did he arrive at this conclusion?  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 unnamed  Chinese chief executive of the company located in Nigeria ,  said  ” Nigeria has a market of 150 million people and raw materials to become a truly industrial nation”.

However, government policy on raw materials remains a disincentive to the real sector and Dr. Akpabio  put it bluntly.  “There is need for government to reduce duty on raw materials and spare parts.  If we want to create more jobs for Nigerians, organisations that are investing in expansion or new lines of businesses  should be  granted duty reduction on raw materials that are unavailable , insufficiently available like palm oil and spare parts.  We expect duty on raw materials  and spare parts to be below 5% by now”.

Value Added Policy – Mr.  Shenx  Ladipo, managing director of Lishabi Mills Ltd-  called for  a value added policy from the federal government.

He said,  Non-regulation of local raw materials exposes local industry to vulnerability in the global market, thereby limiting  the capacity to provide sustainable jobs for Nigerians.

He suggested.  “Some necessary steps to be taken include :  Discouraging  the exportation of local raw materials,  when  the local industry has not been satisfied, introducing export tax on some items, while tax incentives can be given to those  who export processed items”

In addition, he said,, “exporters must demonstrate  that local industries   have been duly satisfied before exportation can be encouraged.   This is not likely to affect the price  to the local producers but will rather ensure that local processing is encouraged”.

Industries would thus be encouraged to focus on exportation  of processed products, which translates to more jobs for Nigerians in addition to export earnings”.
Over Regulation-  Although government has made it clear that the economy  has been      liberalised and  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),  National Environmental Standards and Regulation Enforcement Agency ( NESREA), Consumer Protection  Council ( CPC), State Environmental Protection Agencies etc with serious overlapping jurisdiction .

Dr. Akpabio said the OPS believe that “SON, NAFDAC and State Environmental Protection Agencies  should suffice.  Government agencies should not have the power to close down factories without court order to do so.  Powers being wielded by the regulatory agencies are too gruesome and in most cases leading to abuse, and wanton threats and disruption of production activities”.

Anyone familiar with the operations of these agencies would not but share the views of the OPS on these agencies.  Indeed , some of them have come to see closure of factories as the surest way to get media attention and ‘please’ the powers that be in Abuja who in turn see them as hard working.

TAX  Administration -  This was another area,  the private sector asked government to address urgently.
Dr. Akpabio said, “most tax laws are outdated and need to be reviewed in the light of current realities”.
Sounding more like a trade unionist, Dr. Akpabio said “The tax reliefs / allowances granted for PAYE require  urgent review.””
For instance he said, “While school  fees have increased astronomically, the tax allowance for four children  had remained N10,000.00 over the years.  The relevant bill in this regard  pending before the National Assembly  should be given the prompt attention it requires in order to make the tax administration and collection less prone to errors and manipulation”.
Indeed tax administration is an area is which government agencies are quick to pass the guilty verdict on citizens and corporate organisations but  government  has failed in its duty to bring tax administration in line with modern realities.