Q1 Economy In Review Looking At LCCI’s Report

BUSThere is no doubt the private sector plays a critical role in the delivery of democracy dividends, especially with regard to job creation and the general improvement in the welfare of the citizens.

For this to happen, the operating environment for investors must be favourable.

That’s according to the Director-General of the Lagos Chamber Of Commerce and Industry, LCCI, Mr Muda Yusuf.

Mr Yusuf, who was our guest on Business Morning on Tuesday, spoke on the chamber’s recent review of the Nigerian economy for the first quarter of the year.

He pointed out that the continuing tightening of monetary policy which they say had put pressure on the interest rate meaning that lending rate to the investors in the economy remains high during the period under review.

On the investment climate condition in the first quarter, he also noted that the power supply situation deteriorated compelling many investors to rely on alternative sources of power supply which adversely affected the capacity utilisation of most industries.

Business Development Expert Advises Government To Invest In SMEs

vlcsnap-2014-04-17-14h15m15s114As Nigeria prepares to host the World Economic Forum On Africa, the Federal Government has been advised to look for investment that can be beneficial to all, particularly the small and medium enterprises.

This advice is coming from a Business Development Expert and President of the Nigeria-Britain Association, Mr. Tunde Arogomati, who was on Channels Television’s Business Morning.

While speaking on the key issues and what kind of investments Nigeria should seek for from this forum to help develop its infrastructural base, Mr. Arogomati said there is need for Nigeria to use the forum as an opportunity to look at their peers in other African countries, “see what they are doing and imbibe those things”, he noted.

According to him, there is need to have a definite focus, and separate politics from running the economy. For him, political parties should be run as a corporate organisation and not a self-centered thing.

He, however, believes that for Nigeria’s infrastructural base to be developed, it has to be a joint effort by both the Government and private sector but adds that the onus lies on the private sector to drive it.

The World Economic Forum On Africa to be hosted by Nigeria brings together regional and global leaders to discuss innovative structural reforms and investments that can sustain the continent’s growth, while creating jobs and prosperity for all its citizens.

SMEs Have Not Fully Impacted On Nigerian Economy- Dele Limi

The Director, Trade Promotion and Membership of the Lagos Chamber of Commerce and Industry (LCCI), Mr Dele Limi on Tuesday confirmed the importance of Small and Medium Enterprises (SMEs)  to the socio-economic development of Nigeria but was quick to add that “have not actually done as much as they should”.

Speaking during Channels Television’s daily business programme, Business Morning, Limi added that the SMEs have not adequately contributed to the development of Nigeria in terms of development, employment, availability and quality of goods.

“They haven’t done very well” he said.

He blamed certain “internal problems” such as “management capacity, personal capacity of the investors themselves and the competitiveness of the organisations” for the low impact of the SMEs on the socio-economic development of the country.

Limi also blamed government policies and lack of proper infrastructure but maintained that the internal problems have made the SMEs “unattractive”.

He noted that with duplicated staff strength of 10-50, SMEs are the “highest employer of labour” warning that “unless you develop that sector, we are going to have the kind of unemployment problem we have in our country”.

He further noted that policies put in place to support the SMEs only exist on paper and not in reality. He listed policies by the Bank of Industry (BOI), Central Bank of Nigeria (CBN) and a policy that mandates all commercial banks to invest 10 per cent of their profit into supporting SMEs as policies that have failed the sector.

Limi, who wondered what has happened over the years despite these policies, also noted that “ funds have not been available, the biggest problem that SMEs themselves talk about is access to get it” adding that with the high lending rate we have in this country, you don’t see them getting the necessary support”.

FG Slashes Cost Of Company Registration

The Federal Government has approved the downward review of the cost of business registration at the Nigerian Investment Promotion Commission (NIPC) from N50, 000 to N15, 000.

The Minister of Trade and Investment, Olusegun Aganga said the review was designed to make Nigeria highly competitive in line with international best practices.

The NIPC’s Assistant Director/ Head, Media and Publicity, Joel Attah said the downward review is in line with the desire of the federal government to improve the country’s competitiveness rating in doing business.

“It is also a very bold attempt at lowering the cost of doing business in Nigeria. This is expected to substantially enhance the country’s national competitiveness as a foreign direct investment destination,” he said.

The NIPC was established by Act No. 16 of 1995 to promote, encourage and coordinate investment in Nigeria and Section 4 (a) of the Act mandates the commission to register and keep records of all enterprises with foreign equity participation.

Mr Attah said: “In the light of this development, both new and existing investors are enjoined to take advantage of this gesture to ensure that they are dully registered with the commission in line with Section 20 (1) and (2) of the NIPC Act.

Failure to do so is a violation of the law. “The section states that an enterprise in which foreign participation is permitted under section 17 of this Act shall, before commencing business apply to the commission for registration and the commission shall within 14 days from the date of the receipt of completed registration forms, register the enterprise if it is satisfied that all relevant documents have been duly completed and submitted or otherwise advise the applicant accordingly.”

FG extends YouWiN ‘2’ application deadline

The Federal Government has extended the deadline for applications for YouWiN ‘2’ till October 28.

Speaking at the weekend, its Project Coordinator, Supo Olusi, said the extension became necessary in view of the recent floods in several states of the federation, which made it difficult for would-be applicants to access computers and Internet facilities in the affected states.

“In view of the massive job creation objective set down for this project, government is ensuring that no single qualified candidate nationwide is excluded for reasons beyond the candidate’s control,” he said.

Corruption and lack of power is killing small businesses in Nigeria: World Bank

Poor electricity supply and corruption have been identified as some of the challenges to investment in Nigeria.

A World Investment report conducted by the World Bank on the investment climate in Nigeria which focused on 26 states in the country shows that 4.3 per cent of sales in the manufacturing sector was lost as a result of power failure.

Lead Private Sector Development specialist at the World Bank, Mr Michael Wong, who presented the report in Abuja on Thursday, called for the implementation of policies that would boost economic development in the country.

The last time the World Bank released a report on doing business in Nigeria was two years ago.

The latest report examined some of the challenges confronting the growth of small businesses in the country and problems such as insufficient power supply, lack of funding and corruption were identified as the key factors, just as they were identified in the last report.

World Bank’s Country Director in Nigeria, Marie Francoise Marie-Nelly, also asserted that “Nigeria has the most attractive environment for investment because Nigeria is a large market in the continent; it is the second largest economy in the continent. It is a market that any investor cannot ignore with over 160 million people and a gateway to ECOWAS.”

“For me, while we say the country’s current investment climate could be better in terms of providing electricity, access to finance and other things, you should also look at the huge opportunities for investment in Nigeria” she stated.

But in spite of these challenges the Minister of Trade and Investment, Dr. Olusegun Aganga believes that there is hope for the country.

According to the Minister, despite all the challenges, Nigeria’s global ranking on investment flow rose to 47 per cent last year.

He added that Nigeria’s growth rate in the past 10 years has consistently remained at seven per cent.

However, experts at the presentation of the report opined that these figures and percentage have not translated into job creation and address the widespread poverty in the country.

They agreed that the Small and Medium Enterprise (SMEs) sector of the nation’s economy must be given more priority in government policies.

The federal government declared that it will deliberate on the World Bank’s report to find a lasting solution to issues identified as setbacks to improving investment in the country.


Aganga advocates new job creation strategy

The Minister of Trade and investment, Olusegun Aganga said that the best way to checkmate the increasing rate of unemployment in Nigeria is to have a virile Micro Small and Medium Enterprises (MSMEs) Scale sub-sector of the economy.

The Minister of Trade and investment, Olusegun Aganga.

Mr Aganga who was speaking at a meeting with the SME desk managers of the various financial institutions in the country said that Nigeria has close to 20 million MSME’s a figure representing more than 80% of the total number of enterprises in the country and also 75% of employment base in the country.

The Minister said that in the developed economies like that of the United Kingdom, the Small and Medium Enterprises (SMEs) are the major employers of labour.

“If you like at the United Kingdom, for example, their job creation strategy is heavily focused on SMEs. The assumption is that if they have four million SMEs, and only half of those four million create a job every year, two million jobs will be created easily,” he said.

He said that if only about a quarter of the 20 million SMEs in Nigeria “create one job a year, that is about five million jobs.”

Mr Aganga said that if the enabling environment for the sub-sector to thrive is not created, Nigeria will suffer the negative consequences as such there is a pressing need to proactively evolve ways and means of addressing the challenges confronting the growth of the sector in view of the huge opportunities that exist in the sub-sector.

He says with creative innovations the contribution of the Small and Medium Enterprise to the GDP of the country could increase from 10 to 30 per cent, while also increasing employment.