Business revival in 2017: Matters arising

Last week, the Sam Ohuabunwa Foundation for Economic Empowerment (SOFEE) held its Business Revival seminar in Lagos. The seminar was organized primarily to open the eyes of the attendees which included entrepreneurs, business operators & leaders, industrialists and regulators, to the emerging developments in the Nigerian economy and how to take advantage of them to get out of recession and resume growth in 2017.

The focus of the seminar included assessing Nigeria’s economic performance in 2016, understanding Nigeria’s economic outlook for 2017, understanding the drivers of Nigeria’s economic recovery, understanding and taking advantage of special provisions and concessions for SMEs, understanding the business enablers for 2017 (marketing, sales, cost control, regulation, management & governance and business conduct), optimizing funding opportunities from financial institutions-CBN,BOI, BOA – and other sources, and the building of networks for business revival and expansion.

At the end of the seminar, the participants made a number of suggestions which they want brought to the attention of government and which they believe will help to ensure that the economic recovery is truly achieved this year. Some of these are:

1. Stabilize the forex market

The long standing instability in the forex market- scarcity, rationing, sustained depreciation and multiple exchange rates has been hurting the economy. They praised the recent policy adjustments by the CBN that led to increased supply and appreciation of the Naira in the parallel market. There was apprehension however, that this increased supply from the government oil sales may not last, hence attendees pressed for measures to diversify sources from the private sector. In this wise many pushed for full liberalization of the forex market to attract more Foreign Direct investments (FDI), capital portfolio investment and enhance home remittances.

2. Remove the clogs on the wheel

 Attendees appealed to government to deliberately and systematically remove all the obstacles on the way of businessmen in Nigeria, some of which are placed by government and its agencies. Some of these clogs include multiple taxation (federal, state, local governments), multiple and tedious registrations/documentations (driver’s licence, national identity, bank verification no, ITF, PENCOM, employee compensation etc), indeterminate delays in obtaining business registrations, licensing, C of Os and permits from government regulators.

3. Reform the public sector attitude to the private sector and curb institutional corruption

There is a palpable feeling that the public sector, especially the MDAs do not have the right attitude that is supportive of private sector growth. Many at the implementation level seem oblivious or ignorant of the role of the private sector in growing the economy. That is why many expect to be paid (bribed?) for every service they render to the private sector, otherwise you may be denied service or may suffer undue delays. They called for a total reorientation of the public sector to be facilitators of the private sector and to wean it off extortion and systemic corruption.

One participant recounted how his warehouse was sealed for weeks because he complained of delays in clearing his goods to the head of a regulatory agency and how he was harassed severally until he was forced to pay out money by the lower level officers. Another complained about how he suffered several weeks of delay in clearing his consignments because he had been thorough in paying all the required fees ahead of time. He was punished for not leaving a gap in his obligations. Yet another complained of the double payments they now make in the wake of the TSA. You pay ‘ Buhari money’ which goes to the TSA and then you pay another ‘real money’ which is available for the agency to use. Tough!

4. Government should pay local contractors/ suppliers as at and when due

Government is owing local contractors and suppliers trillions of Naira, and still expect to be supplied new products & services. This is stifling the ability of local companies to operate. Government does not pay interest on debts they owe, yet businessmen pay high interest rates to banks and get punished by government for late payment or late remission of taxes. They insist that the government should obey its procurement law and pay as at when due or pay interest on overdue payables to help the private sector revive in 2017. They encouraged government to hasten the mooted plan to raise bonds to pay backlog of domestic debts.

5. Reduce interest rates 

Participants recommended a reduction in interest rates to spur increased borrowing and spending to enhance economic activities and push the economy out of recession. They believe that the current interest regime in commercial banks cannot support manufacturing and other value-adding activities in the SME sector. They asked for transparency in the implementation of the CBN, Bank of Industry (BOI) and Bank of Agriculture (BOA) special funding windows.

6. Government to walk the talk

Attendees at the seminar said that most of what government is saying in the 2017 budget or the new Nigerian Economy Recovery and Growth Plan (NERGP) are not new. They had heard of such in the perspective plans and rolling plans of yesteryears, in the Vision 2010 and Vision 2020 documents. At the end, so much money would be spent and yet electricity has not improved, pipe-borne water supply has not shown much improvement and our health statistics remain almost stagnant if not retrogressive. They hoped that the story would be different this time. Specifically they asked for transparency in the 500 billion Naira social intervention fund and hoped it will not be compensation for political supporters or savings for the next elections.

7. That PMB should be allowed all the rest he needs

Participants wished the President well and asked that he should be allowed to have sufficient rest, so that he can come home fully rested, hearty and healthy. They asked Garba Shehu and Femi Adesina to please ask all the world leaders -Donald Trump, Moroccan King, Conte etc who have been disturbing the peace of Mr President with phone calls to route their calls to the acting President. They should also be careful in disturbing the President with stories of those who died or are dying in Nigeria compelling him to be calling to commiserate. If they have no other work to do than informing Nigerians of who called the President or whom he called, they could take their own vacations as well or return to their former duties (unless they were unemployed) till PMB returns and resumes work.

Mazi Sam Ohuabunwa OFR