Nigeria’s Vice President, Prof. Yemi Osinbajo has said that the Economic Sustainability Plan (ESP) is replete with opportunities for micro, small and medium scale businesses to expand their activities in manufacturing and local production and to participate in supply chain activities across various industrial and service sectors.
Osinbajo who made the disclosure in his keynote address at the 2020 Presidential Policy Dialogue WEBINAR of the Lagos Chamber of Commerce and Industry (LCCI) held on Friday, said that the Plan also recognized nonetheless that many businesses suffered serious losses during the lockdown that was put in place to limit the spread of the COVID-19 virus.
He added that in addition to direct procurement of pharmaceutical and health products from small businesses mentioned earlier, the ESP offered support for small businesses in sectors badly affected by the pandemic such as those in hospitality, aviation, creative industries, road transport, tourism, private schools and export related businesses.
According to him, such support included direct payroll support to staff of qualifying employers for 3 months, and support for MSMEs on reduction in registration fees and assisted e-registration which will reduce barriers to entry to food and drug sectors.
“Part of what we are hoping to achieve as we work through the various challenges of this period, is to also impact some of the existing problems regarding the ease of doing business. We hope to do so across board for all businesses, especially the MSMEs who are the engine-room of most economies.
“Also pertinent is the enablement of banks to restructure loans and the provision of less onerous credit terms under the auspices of the Central Bank and the National Development Banks like Bank of Industry, NISRAL and NEXIM. Working with the Central Bank, we try to ensure that we are able to put in a place a system whereby many businesses that have taken loans will be able to restructure those loans and this is an on-going conversation and we intend to keep the banks reassured that allowing generous restructuring programs will be supported by the Central Bank and that the Central Bank will not throw them under the bus.
“Similarly, the recently Finance Act 2019 exempts businesses with a turnover or less than N25m from companies in- come tax while those with turnover between N25m and N100m will only pay 20% CIT instead of 30%”, he stated.
The Vice President noted that the federal government also realized the importance of infrastructure to underpin the national aspiration to be a producing country and become less reliant on crude oil exports adding that given the scale of the needs and the limited resource base of government, it was clear that Nigeria needed its private sector to be involved in infrastructure development.
He continued, “So, the plan does not dwell on major infrastructural development because of its time-frame but also because of on-going and path-breaking infrastructural investments in railways as well as in key projects of the Presidential Infrastructure Development Fund such as the Lagos-Ibadan highway, the Second Niger Bridge, the Abuja to Kano Road, the East-West Road and the Mambilla Hydroelectric Power scheme.
“Greater emphasis was placed on provision of rural roads to facilitate evacuation of agricultural produce as well as public works and facilities maintenance programmes with their huge job creation potential. We recognize of course that national infrastructural needs go beyond these mega-projects and rural facilities and we strongly believe that the private sector has a key role to play in the provision of infrastructure. The plan therefore calls for the leveraging of national savings including pension for such purpose.”
He further observed that the LCCI was well-aware of the commitment of the federal government to providing an enabling environment for business to thrive saying that the federal government had made some strides in improving the ease of doing business in Nigeria.
In his words, “Through the Presidential Enabling Business Environment Council (PEBEC), a lot has been achieved to fast-track processes, reduce bottlenecks and improve transparency across Government MDAs. As a result, we have moved 35 places upward in the World Bank’s Ease of Doing Business rankings. We have continued to scale up our business reform initiatives across regulatory agencies.
“Of course, there is still a lot more to be done. There is still a lot to be done in improving the ease of doing business in Nigeria and the public and private sector needs to spend more time to look at the many ways we can solve these problems. Some of these problems are problems of the environment which we can deal with. Others are attitudinal problems, problems of governance. It is therefore in the interest of our economy to work through these issues, some of which are not lost on the Federal Government and we are very committed to resolving these problems and creating a much better environment for business.
“Our aim is to continue to improve our national ranking in the World Bank Doing Business Index ranking to below 100 in the coming years. It is also very important to reduce the harassment and extortion of businesses by various government agencies. The practice of arbitrary assessments, inspections and intrusions often for contrived reasons just needs to stop. Despite setbacks arising from effects of the global pandemic, we are steadily working to improve and consolidate on business environment reforms. The federal government is not under any illusion that it can do this on its own. Everything we plan to do has to be done log-step with the collaboration of the private sector. What we have seen in these times is that Nigerian businesses can and are being creative.
“The transition from in-person meetings to zoom meetings shows the tremendous resilience of Nigerian businesses and the Nigerian people as a whole. We can see how, very quickly, we have adapted to all that is going on in our environment. The task ahead is challenging, and I believe that the LCCI, working with federal government and several other private sector organizations, will together solve all of these pending issues. This period of the pandemic will provide us with the best opportunity to do something significant and to really make a difference in the Nigerian economy.”
Earlier in her welcome remarks, the President of LCCI, Mrs. Toki Mabogunje pointed out that these were surely not the best of times for the Nigerian economy and for their businesses as the effects of the Covid 19 disruptions had been very profound.
Mabogunje noted that the short-term outlook of the key economic indicators was not looking bright even as she expressed hope that they would turn the corner sooner than later.
“As we all know, the major trigger of the economic downturn was the Covid 19 induced slump in oil price, resulting in the plunge of both revenue and foreign exchange earnings. Besides, there were serious disruptions in the supply chains with consequential dislocations to many production processes. The liquidity crisis in the foreign market has reached a scary level reflecting in acute foreign exchange scarcity, sharp depreciation in the exchange rate, widening parallel market premium and weakening investors’ confidence.
“However, we believe that the Nigerian economy has some strong fundamentals. Our natural resources endowments are vast, the domestic market is large, and our people are resourceful and enterprising. What is missing are the enablers. Times like these offer tremendous opportunities for innovation, creativity, export growth and import substitution. These are the silver linings in the current economic downturn”, she submitted.
The LCCI President however, acknowledged the spirited efforts of the federal government to fix the Nigerian economy noting that an Economic Sustainability Plan with a financial commitment of N2.3 trillion had been put in place to support vulnerable sectors and create jobs which according to her, was the outcome of the efforts of the Economic Sustainability Committee, Chaired by His Excellency the Vice President, Prof. Yemi Osinbajo.
She underscored the need for regular engagements and communication on policy issues to ensure quality feedback and enrich the policy making process saying that this should cover macroeconomic policies, sectoral policies.
“These will include foreign exchange policy, Trade policy, Tax policy, Energy policy, transport policy, Industrial policy, Agricultural policy, ICT policy, among others. Some of these are cross cutting, while others are sector specific. Regular engagement with relevant stakeholders in the various sectors will bring a great deal of value to the economic management process. The regulatory environment also needs to align with this vision.
“We are aware of the efforts of government to fix our infrastructures, including roads and railways, but funding has remained a major challenge. We would like to see a new funding model with much bigger focus on private sector capital within a Public Private Partnership [PPP] framework for infrastructure development in the country. Am sure in the course of the dialogue, other matters will be raised.
“Your Excellency sir, at a time like this, we should do all that we can to attract private capital, both from the domestic economy and the global investing community. We are aware that there are huge financing gaps, especially in the infrastructure delivery. Challenges of funding the economy and the operations of government is a major cause for concern”, she stated.
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