Beyond WEF : Nigeria requires a favourable business environment
The World Economic Forum(WEF) focussing on Africa just ended in Abuja despite mounting concerns over terrorist insurgency especially in the north eastern region. One lesson drawn for Nigeria is that the country offers business people more tempting attraction that whittles down any perceived fear of the threat of terror.
The challenge before Nigeria is how to harness its strength and potentials as Africa’s largest economy following the recent rebasing exercise which put the Country’s GDP figure at $510 billion, especially as analysts hold that without the various limitations in Nigeria’s business environment, it cannot be argued that the size of Nigeria’s economy will be much larger than ascertained.
To bring home the issue of limitations is an account of the experience of a book Publisher rendered by Babatunde Fashola, Governor of Lagos State in his recent key note address at the 7th Lagos Economic Summit (Ehingbeti). According to the account, this Publisher prints books outside Nigeria where the power component in his printing cost is just 4% compared to a huge power component of 40% of printing cost where he to print in Nigeria. As a result of his oversea printing operation he employs 600 people outside Nigeria.
How can businesses grow properly with a singular huge Power cost of 40 per cent not counting other costs of distribution, finance, manpower etc? How can employment opportunities be generated in an environment where businesses are not employing because of rising costs?
A country with a large population like ours that seeks genuinely to stem the tide of unemployment, grow incomes and reduce poverty must ensure that factories that can absorb more people are thriving in all ramifications.
While efforts are already being made to make power supply efficient through a privatisation process and independent power projects pursued by some states, the perennial high cost of funds is still a major hindrance for industrial growth. Not to mention the inefficient transport infrastructure that has been with us because of the stunted and poor rail system we have maintained. The undue delays suffered by manufacturers and businesses at our ports and the resultant cost effect of these delays are fast becoming a clog in the wheel of many businesses.
With a lending interest regime hovering around 17 -28 per cent when other climes maintain a business friendly regime of single digit interest rates, creating and growing businesses here is a herculean task.
It is not enough to launch beautiful plans on industrial development and entrepreneurship growth when the economic and business environment is stifling. That is why the domestic manufacturing sector which is continually being threatened by the onslaught of cheaper manufactured products from climes where manufacturing enjoy business friendly economic environments has been turned to the ‘weeping child’ of Nigeria’s economy. Thus, operators in our local manufacturing industry are either crying over huge power cost or against high lending interest rates. In this circumstance, manufacturing which historically is the major index of the state of any economy may remain in the woods.
The increasing penchant for jettisoning international ratings on Nigeria by our government is hypocritical and unhealthy. Why do we pretend over situations we know are factual? Every entrepreneur in Nigeria, whether local or foreign, knows that doing business in Nigeria is really like mountain climbing. Many do start off, but only a minute few get to the top.
The business of government is to create an enabling environment for business to thrive through well thought-out economic policies that encourage businesses. These policies should not be subject to frequent whimsical shifts that confuse investors or make them adopt a wait and see attitude. Our governments and those who run these governments should be transparent on their economic direction and commitment to transform Nigeria’s economy. They should not to be seen to engage in activities that threaten to sabotage the economy because of conflicting personal or group interests.