For most investors in Nigeria, local and foreign, ease of doing business has become rhetoric that can be understood only through experience. It poses numerous challenges with unexpected opportunities for those who dare to venture. Recently, investors, including long-established businesses, have been leaving Nigeria due to the cost of doing business, poor infrastructure, low patronage, difficulty in sourcing foreign exchange, and an even greater problem of remitting earned income by foreign investors.
Black Pelican Group focused on this issue at an event in the Federal Capital Territory, Abuja. The event attracted business leaders and political associates from the National and State Assemblies, who used the occasion to vent their opinions on the subject, which seems to have defied solution even with the best intentions of the federal and state governments as espoused in policies and programmes.
Setting the ball rolling, the Group’s Chief Executive, Mr Michael Owolabi, said that implementing the government’s local content policy has not been easy and stated that accessing capital is a daunting challenge with the high interest rates charged by facility providers in the financial sector. Compounding this difficulty is the inadequacy of power, which includes a high tariff on electricity consumption and the cost of petroleum products which power alternative energy sources.
His views were shared by participants who called on the authorities to walk the talk regarding efforts to attract investors by providing business incentives. It is important to observe that companies, much as they are interested in the country’s population that serves as a market for goods and services, are compelled by the perceivable hostile environment to relocate their production facilities outside the country while retaining their distributive and marketing subsidiaries in Nigeria.
Participants engaged in the productive sector commended the Bank of Industry (BoI) for its drive to assist the sector overcome some of its financial challenges. However, they noted that the gap was too narrow to create the desired economic impact. The general consensus was that the federal government needs to empower BoI and other public sector financial services providers to effectively and efficiently drive the economy in the right direction and enable it to compete favourably with other world economies.
In the view of the discussants, one of the ways that this can be accomplished is by paying close attention to road infrastructure. Or better still, expanding the rail system to cover the whole country. In making this point, they averred that rail is among the cheapest means of transporting bulk goods at an efficient cost. In our opinion, neither the roads nor the rails are serving their purposes adequately. The effect of this on the unit cost of products is the overflowing inventory as a result of consumer resistance, which has become a huge source of concern to manufacturing. They raised the issue of multiple taxation and the overbearing port charges hurting Nigerian ports’ patronage.
Similarly, the participants at the forum noted that the brain drain syndrome, which is driving the youth to seek greener pastures elsewhere, is shrinking the technical skill space to the extent that constant training and re-training of personnel has become a phenomenon for most businesses, with the attendant hike in the cost of factors of production.
But it was not all lamentation as the participants insisted that tough and peculiar challenges perceivable in the country’s operating environment, for the daring, can serve as a vehicle for enhancing creativity needed to overcome and achieve. In that situation, a good team and shared vision could energise and nudge a collaborative enterprise towards a profitable direction.
This newspaper has consistently on this page appealed to the government to address the challenges facing businesses as a way of bringing under control the unemployment scourge that is threatening to become a national security issue. We are persuaded to emphasise that based on the mindset of operators in the economy, terrorism, kidnapping, banditry, and cybercrime are more than enough security headaches.
We also had to let the authorities appreciate the fact that the fabled foreign investors’ business plans and projections are not emotional. Before making any business move, they assess the facilities in place, the ability to bring in funds, and the convenience of taking them out when the deal is done. The security situation, the state of infrastructure, tax policies, and other disincentives to business and investment must be addressed frontally if the nation is to make the kind of waves capable of galvanising any economy to develop and thrive.
Without these, we dare to say, foreign trips, conferences, or business delegations will become mere jamborees that cannot sway an unwilling foreign investor to look Nigeria’s way.
