The Lagos Chamber of Commerce and Industry has said that a one-year tax break will enable businesses to navigate the storms as well as preserve employments.
The LCCI President, Toki Mabogunje stated this on Tuesday during a press briefing.
Mabogunje stressed that with the COVID-19 induced lockdown in some states, findings show that majority of business owners plan to cut down salaries, downsize the workforce, or have a combination of both.
She maintained that policymakers and the organized private sector need to come together to rescue the economy from collapse at this critical time.
“Businesses therefore request adequate stimulus and intervention to preserve investments and save jobs. More than half (54%) of business owners want banks to reduce interest rate and give moratorium on loans, 29 percent want a reduction in tax liabilities, while 17 percent want waivers on import duties and demurrages.”
The Chamber also proposed that; “A year tax break for healthcare & pharmaceutical companies, airlines, manufacturers, agro-processors, SMEs and hospitality players.”
It also called for the temporary suspension of a 50 percent increase in VAT rate till year-end, and also, “P.A.Y.E should be suspended for the next six months.”
This according to the chamber, would help boost the purchasing power and aggregate demand, thereby stimulating the economy.
For the aviation industry, LCCI asked for support towards augmenting insurance premiums which are dollar-denominated due to lack of local capacity.
LCCI also called on the government to focus on the completion of critical infrastructure projects nationwide such as the Lagos-Ibadan expressway, Lagos-Ibadan rail project, Enugu Airport, the Second Niger Bridge, East-West Road, among others.
The Lagos Chamber of Commerce and Industry (LCCI) has said that Nigeria will continue to spend a large chunk of its earnings to service the total public debt stock of N25.7 trillion.
In its report on the 2019 Economic review and outlook for 2020 released to journalists on Monday, LCCI stressed that the debt stock jumped by 128 percent in the last eight years, without any impact on the economy.
“The Debt Management Office puts Nigeria’s total debt stock at N25.7 trillion as of June 30, 2019. This represents a three percent increase over N24.95 trillion owed as of March 31, 2019.
“Breakdown shows that N8.3 trillion or 32 percent of total debt stock is owed to external creditors while N17.4 trillion or 68 percent are domestic debt. Debt stock has jumped by 128 percent in the last eight years without a corresponding impact on the economy.”
It added that the outlook for 2020 suggests that the country’s debt profile will trend upwards by 2020 based on three key factors: approval of $3 billion credit facility from World Bank for power sector reforms; possible ratification of $29.96 billion loan request for infrastructural development; ) wider fiscal deficit (2020: N2.7trn; 2019:N 2.1trn).
“However, the rising indebtedness of the economy calls for concern as increased debt stock failed to stimulate neither growth nor infrastructural development.
“Given Nigeria’s revenue challenges, the country will continue to spend a large chunk of its earnings to service debt.”
Meanwhile, the Federal Government on Monday, stressed that despite the debt figure, Nigeria is not in debt trouble as being circulated, insisting that the nation is within a reasonable debt to its Gross Domestic Product (GDP) ratio.
He decried that the country’s debt stock was being misrepresented by those he described as scaremongers.
“The public debt stock is actually a cumulative figure of borrowings by successive governments over many years. It is, therefore, not appropriate to attribute the public debt stock to one administration.
“Nigeria’s total public debt stock in 2015 was $63.80 billion, comprising $10.31 billion of external debt and $53.49 billion domestic debt. By June 2019, the total debt stock was $83.883 billion, made up of $27.163 billion of external debt and $56.720 billion domestic debt.”
“It is, therefore, not correct to say that Nigeria’s external debt alone is $81.274 billion. There is yet no cause for alarm.”
Entrepreneurs have been asked to tap into the potentials of the agriculture sector in Nigeria, adding that it was time to change the dynamics and bring the private sector together.
Addressing thousands of participants who attended a conference organised by Agric Business Empowerment Initiative, the Convener and Chairman of Lagos Chamber of Commerce and Industry (LCCI) Agric Group, Mr African Farmer Mogaji, noted that entrepreneurs in the agricultural space can attract investors and scale up their businesses if they shun working in isolation and adopt an ecosystem approach.
“We are trying to bring the private sector at small scale and medium, such that they can put in the right structure and we can get the sector moving forward. I will say that most young people venturing into agriculture in Nigeria today, have zeal but no knowledge; they have high aspiration which is good, however, it takes a process. Agriculture is not like other sectors and so, you need to work the ropes – they lack coaching and mentoring,” Mogaji said.
He announced plans by the organisers to continue working with participants for a period of three months to seek out the ones serious about scaling up their ventures.
“We want to serve as an umbrella body to help, most especially those youths aged 18 – 40 who need information and network. We plan to work with them for three months and then scale up with the few ones that qualify.
“We also need these youths to work together in groups rather than in isolation and we will take them to the next level. We need to come together in order to grow together; there is nothing that is not profitable in Agric business, just that you have to join the right network,” he said.
He noted that funding was not a major challenge as funds were available and easy to access by those who understood essential principles of setting up a business in the agriculture space.
“Yes, they talk about funding, but funding is available, it is just that many don’t know how to brand, many want to start a project instead of going into franchising. I just got four of the largest cooperatives offer me hundreds of millions to fund any initiative that I will be the technical partner, so, money is not the challenge, rather it is the capacity to handle those funds that is essential.
“The diaspora for example is looking for what to put money into, I know a lot of individuals in the Diaspora pumping money into Nigeria’s agribusiness sector. For example, we are importing most of the exotic vegetable seeds we cultivate here, they can invest in those seeds and push it down here, which is quite sustainable and preferable to starting a farm here.”
One of the speakers, Mrs. Subomi Plumtre, noted that with the African Free Trade Agreement, a lot of markets have become open and it is time to build a distinct identity and brand for agribusiness products, companies or organisations.
According to her, Investment organisations also are looking for who to fund and they tend to defer to organisations that have credibility and reputation “and if you don’t build these qualities, how will they find you?”
She encouraged farmers or agribusiness professionals to go beyond just doing the quality work that they are doing and build a reputation especially online, attend conferences and build networks beyond Nigeria and attract funding that can be used to scale beyond Nigeria.
“I think the government has done a lot in terms of policies that encourage entrepreneurship and agriculture, directed the Central Bank to give out single digit loans, it is now for the agribusiness practitioners to take advantage of these policies to grow their businesses and platforms exponentially,” she said.
The Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI), have disagreed with the prediction by the chairman of the Nigeria Governors’ Forum, Abdulaziz Yari on the looming recession.
Mr Yari, had told the newly-elected governors on Monday, to prepare for another cycle of possible economic recession by mid-2020.
The recession, according to Yari, who is also the Zamfara state Governor, may not end until the third quarter of 2021.
The Organised Private Sector group, in a reaction on Tuesday, questioned the basis on which Governor Yari made his prediction about another cycle of recession from 2020 to mid-2021.
According to the MAN president, Mansur Ahmed, “although the economy is not growing as fast as expected, it is growing nonetheless and all the projections from the world bank and other international bodies say that it will keep growing.”
The Director-General, LCCI, Mr Muda Yusuf, said “he could not agree with Yari because he was not speaking in the capacity of an economist and did not put parameters forward to back his projections.”
The Lagos Chamber Of Commerce and Industry (LCCI) says that the recent pronouncement by the Central Bank of Nigeria (CBN), on the exclusion of all forms of textile materials from the forex market has ‘grave implications’ for businesses in the fashion, tailoring, and garment industry in the country.
In a statement signed by the Director-General, LCCI, Muda Yusuf, the chamber noted that its submission was not to diminish the importance of the local textile industry in any way or the significance of the nation’s industrialisation, but to underscore the importance of a strategic approach to industrialisation.
“This industry is one of the fastest growing industries and has created amazing opportunities for many young Nigerians to express their creativity and innovation. The sector is estimated at N5 trillion, creating about 500,000 jobs. The policy contemplation of the CBN will put all of these at risk.
“The starting point is to strengthen the capacity of domestic industries, enhance their competitiveness, and reduce their import dependence as espoused in the Nigeria Industrial Revolution Plan (NIRP),” the statement added.
The chamber also reiterated the importance of power in the revitalisation of the textile industry, while also calling for a stronger collaboration in policy formulation and implementation.
According to him, “It is almost impossible to achieve rapid industrialization without resolving the issue of power and the deficit in key infrastructure. Textile production is energy intensive. This is a high energy cost environment and it is very difficult for any energy intensive sector to survive.”
He called for collaboration and coordination among the CBN, the Finance Ministry, Budget and Planning and Trade and Investment on trade policy issues.
“The boundaries of monetary policy need to be properly defined. Exclusion of sectors from the forex market is not a monetary policy issue. It is trade policy matter,” he said.
The Director-General, Lagos Chamber of Commerce and Industry, Muda Yusuf, has warned against social exclusion in Nigeria as the country marked its 58th Independence anniversary on Monday.
Yusuf issued the warning while speaking about social investment during Channels Television’s special Independence Day anniversary programme.
According to him, because the provisions of budgets over the years have been insufficient, the private sector has encroached on the provision of social services.
The implication is that the poor cannot access social services, hurting the country’s chances of building human capacity.
Yusuf said, “We have a big private-sector space in education. Ordinarily, it should not be. And because (education) is becoming more expensive, because it is becoming more private sector-driven, it is becoming more exclusive.
“The children of the poor cannot access quality education. And we should not build a country where a child will not be able to go to school because the parents cannot afford school fees. You don’t build a country that way.
“All the advanced economies that guarantee free primary education, free secondary education; of course, they know what they are doing. That is how to build human capital.”
Recalling the Federal Government’s Economic Recovery and Growth Plan, the LCCI DG said a section talked about investing in people.
“A major component is education, a second component is health, a third component is environment. These are critical areas where it is not often easy for the private sector to deliver value to citizens. That is why we call it a social sector space,” he said, adding that all tiers of government had a responsibility in the matter.
To address the problems in the social space, and in view of the serious budget limitations in the country, Yusuf said it was important to incentivise the private sector.
“Right now there is no incentive at all for private sector providers in health, for private sector providers in education, for private sector providers in environmental management,” he said.
This, he added, is why the services are so expensive.
According to him, because the private sector is not a charity organisation, and is there to make money, the government has to create a situation where the cost of social services offered by the private sector will be lower.
“Why should we be imposing tax on somebody who is running a primary school or secondary school? Such a segment should be exempted from paying tax,” he said.
“Why should we be imposing tax on a private hospital? The government cannot provide these services. The private sector is stepping into that space (and) you need to give as much generous incentives as possible so that you can fill these gaps.”
A former chairman of the Lagos Chamber of Commerce and Industry (Agric Sector), Mr Wale Oyekoya, believes the policies of the Federal Government has little or no effect on the average Nigerian.
The agricultural expert and farmer said this during his appearance on Sunrise Daily on Thursday.
“All these policies are not really trickling down or showing on the stomach of average Nigerians,” he said on the Channels Television breakfast show.
“Yes, there have been so many robust ideas by the Federal and state governments; but I’m here to be corrected if most of these farmers are really benefitting.”
Mr Oyekoya stressed that while the government has come up with various laws to reform the nation’s agricultural sector, there is a need to focus more on the implementation stage.
He cited the Commercial Agricultural Credit Scheme (CACS) initiated by the Goodluck Jonathan administration.
The expert claimed that less than 15 per cent of farmers benefited from the disbursement of billions of naira by the previous government under the programme.
He added that a part of the fund was benefitted by “political farmers” and more problems were surfacing as the present administration address the issue.
The farmer said, “Definitely, there have been so many policies and the problem has always been the implementation of most of these policies.
“See, it’s a game they play and it’s a bad time that we keep deceiving Nigerians in the process of achieving political points. An average Nigerian will tell you that there is a problem in this country in terms of food security.”
The agricultural expert also condemned a situation where the country still imports certain food, saying such is not good for its economy.
According to him, Nigeria is blessed with fertile soil and good atmosphere while the assertion that the nation is self-sufficient in rice production is a lie.
Mr Oyekoya accused some political leaders of supporting food importation because of greed and urged the government to come to the rescue of farmers in the country.
“We have no business importing any food into this country,” he insisted, saying, “We are doing that because of the greed of some of our leaders; because they capture some of these interventions and instead of them to spend the money here, they spend it elsewhere.”
The expert added, “Look at the price of maize today, do you believe that more than half of the maize we use in this country are still being imported? By the time you produce yours, there is no way you can compete with the importation of some of these things.”
The Lagos State Chambers of Commerce and Industry (LCCI) has reacted to the plans by the Federal Government to shut land borders to curb the challenge of increased rice smuggling.
Director General of the LCCI, Muda Yusuf, who was a guest on Channels Television Programme, Business Morning, on Tuesday said the Federal Government needs to be more strategic to successfully tackle the issue of smuggling foreign rice into the country.
“We have to be more strategic when dealing with economic issues. This is a very simplistic way of dealing with the challenge of smuggling. Smuggling is a symptom of a problem and when you begin to fight a symptom you cannot solve the problem. You need to identify the cause of the problem.
“There is a major issue with productivity in Nigeria’s agriculture sector. If we have a country of this kind of population and this kind of agriculture sector that has very serious productivity challenge, you are likely to have this kind of problem.”
He said although the Federal Government has taken steps to boost Agriculture and rice production, the demand, however, surpasses the supply.
Therefore, better solutions need to be proffered by the Federal Government.
“Although, there have been some efforts (by the Federal Government) to support the production of rice, we are still very far from what the demand is. There’s a demand gap of close to 2.5 to 3 million metric tonnes of rice locally,” he said.
Muda said rice smuggling cannot be eradicated in Nigeria by simply closing borders. According to him, the solution “is to see what you can do to scale up productivity so that it can narrow the demand-supply gap.”
He then urged the Federal Government to implement problem-solving policies and not merely block borders.
“Sometimes, you solve a problem not just by physically blocking the road and borders but through policies.
“If you are going to close the border entirely for a product that is just about 2% of the nation’s GDP. What happens to 98% of the GDP,” he said.
The Federal government had earlier intimated of plans of shutting down the land border between Nigeria and a neighbouring country to avoid smuggling of foreign rice into the country.
The Minister of agriculture and rural development, Audu Ogbeh, on Monday, said this was necessary to encourage local production and sustain the economy of the country.
Although Ogbeh did not state which neighbouring country exactly is affected, he noted that the rice imported into the country may look sophisticated, but it is acidic and poisonous, hence the need to shut the border and protect the health of Nigerians.
“Our other problem is smuggling. As we speak, a neighbour of ours is importing more rice than China is importing. They do not eat parboiled rice, they eat white rice, they use their ports to try and damage our economy.
“I am telling you now because in a few days, you will hear the border has been shut, we are going to shut it to protect you, us and protect our economy.
“There are three kinds of water in their natural state; there is fresh water from the river, salt water from the sea, blackish water.
“If you go to the Delta in many countries, in South East Asia where they grow the rice, if you plant rice in the same place like four to six years continuously, the quantum of arsenic begins to increase and arsenic causes cancer and that is what they are dumping for us.
“Some people say they prefer Thai rice because they are very sophisticated, welcome to poison,” Ogbeh said.
The Director-General of the Lagos Chamber of Commerce and Industry, LCCI, Muda Yusuf, has suggested privatisation of Nigeria’s oil industry explaining why the Nigerian National Petroleum Corporation, NNPC, should become a private agency.
The economist said this on Monday when he appeared as a guest on Channels Television Breakfast Programme, Sunrise Daily. He claimed that the NNPC is crippled with structure and governance irregularity and the model needs to be reviewed to disconnect it from the Federal Government.
“There is serious inefficiency in that sector (the NNPC) and it is something that is typical of a government parastatal. When you have something as strategic as the oil and gas and you leave that to the bureaucrats to be managing, you are going to have problems.
“We need to revisit the entire model. We have to disconnect the NNPC from the government. It has to be a private enterprise competing with other private enterprises so that we can have a competitive environment. That is when we can have the benefit of what we should have,” he said.
Yusuf also explained further that the privatisation of the oil sector is the way out incessant fuel scarcity adding that private investors will reduce problems currently experienced in the oil sector.
“This will attract more investment and allow private sectors to invest in refineries and create more jobs. It will reduce the problem of oil smuggling as well,” he said.
Government agencies according to the economist are characterised by irregularities which he said is why there is a need for privatisation to create room for competition.
“How many government institutions have you seen being run efficiently and sustainably? This is something that the private sector can run properly. It (Nigeria’s oil sector) is being run by bureaucrats.
“How do you run an oil producing country when there is no private investment in refineries? Licenses have been issued to private individuals for almost five years and nothing is happening.
“The best thing is for the government to get out of the entire (oil) business and allow the private sector to set up refineries, to import and have a regulatory framework.”
Speaking concerning fuel price hike, a challenge which the consumer is always confronted with, Yusuf said the interest of the consumer can only be protected in a competitive environment.
“The best way to protect the average person against price (hike) is to introduce competition. That is the best protector of the interest of the consumer in any space. If you don’t have competition, the consumer will suffer, eventually.”
The Lagos Chamber of Commerce and Industry (LCCI) has advised the National Assembly to exercise caution in its investigation into allegations of infractions in the private sector.
In a statement from the chamber, the LCCI says it would like to see a legislative and private sector interface, characterized by fairness and the avoidance of collateral damage to businesses and the economy.
The chamber also expressed concerns over the frequent summons of corporate organizations and the competence for investigations by the National Assembly. LCCI also called on the legislature to channel such matters to the statutory agencies of government.
LCCI however appreciates the role of the Senate in ensuring the enactment of enabling laws and review of obsolete legislation but says unnecessary investigations could deter the private sector deliverable on the economic recovery and growth plan.
The Lagos Chamber of Commerce and Industry (LCCI) has thrown its weight behind the recently signed Executive Orders by the Acting President, Prof. Yemi Osinbajo on the ease of doing business in the country.
The LCCI believes that the Executive Orders will fast-track budgetary administration as well as promote made in Nigeria products.
The chamber is asking the government to ensure that stipulated timelines are strictly adhered to by all the parties affected by the orders.
The LCCI is calling on state government to replicate these reforms as applicable in their respective states, to complement the efforts of the Federal Government on ease of doing business in Nigeria.
The Director-General of the Lagos Chamber Of Commerce and Industry, Mr Muda Yusuf, has thrown his weight behind the liberalization of the petroleum downstream sector.
In a statement released on Thursday, Mr Yusuf, explained that the deregulation of the sector will reduce importation of petroleum products and ease the pressure on the foreign exchange market as well as foreign reserves.
In the meantime, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture have also commended the federal government for finally taking the bold step to remove subsidy on petrol.
The President of the chamber, Bassey Edem, expressed optimism that this will put an end to the fuel scarcity being experienced in the country, while reducing the pressure on foreign reserve as a result of huge demand for petrol import.