•Say massive waste ongoing at Ajaokuta Steel Company •Oborevwori: Hostile environment, poor infrastructure, insecurity threats to doing business in Nigeria
Emmanuel Addeh in Abuja
The Nigerian Society of Engineers (NSE) yesterday decried the increasing number of companies either folding up or leaving Nigeria, describing the situation as “gloomy”.
The NSE President, Tasiu Gidari-Wudil, who said this in Abuja, while speaking on the association’s forthcoming flagship national engineering conference, exhibition and annual general meeting, noted that if nothing was done, more manufacturing firms would leave the country.
Also yesterday, Delta State Governor, Hon. Sheriff Oborevwori, identified harsh and hostile operating environment, poor basic infrastructure, insecurity and policy flip flops as disincentive to both local and foreign investments in Nigeria.
Speaking further, Gidari-Wudil stated that the summit themed: “Re-engineering the Manufacturing Sector for Competitiveness and Enhanced Economic Growth,” would hold from November 27th to Friday, December 1st, 2023, in Abuja and would give stakeholders the opportunity to discuss the way out of the current unacceptable situation.
“The theme of this year’s conference was informed by the continuing decline of activities in the manufacturing space of Nigeria’s economy.
“Nigerian engineers are concerned about the gradual erosion of the little record Nigeria had on her non-oil export performance in the 60s and 70s.
“Even though the non-oil export performance record was mainly based on agricultural produce, there were days of textile, coal, tyre, hides and skin and many other products export in Nigeria.
“The rubber plantations in the South have disappeared, the coal mines in the East are no more, the textile hubs in Kaduna and Kano are moribund, and so is the tannery industry across the North.
“Many international conglomerates that bolstered the manufacturing sector of Nigeria’s economy at some point have folded up their businesses and left,” the NSE president lamented.
The NSE listed some of the companies that had left the country as: Volkswagen, Michelin, Procter & Gamble, ISO Glass, Universal Steel, Universal Rubber, NASCO Fibre, GSK Pharma, Tower Aluminium, among others.
“The reasons for the gloomy situation are not far-fetched. They range from unfavourable and inconsistent government policies such as unstable foreign exchange regime, hostile import licensing policies, unavailability of constant power, rising cost of alternate energy supply, amongst many others.
“The saddest narrative in the manufacturing trajectory of Nigeria is the gigantic Ajaokuta Steel Manufacturing Company, a government-owned concern that never rolled out one length of steel since it was built and has been left to rot away,” it added.
While not exonerating his members from the rot in the system, Gidari-Wudil stated that there’s little its members can do, stressing that when successive administrations do not accept the recommendations of the society, then they should not be blamed.
The president of NSE also stated that the organisation would soon come out with a position on the raging national debate over whether to jettison asphalt for concrete pavements in road construction in Nigeria.
In light of the foregoing, the NSE said in collaboration with the United Nations Industrial Development Organisation (UNIDO), it plans to bring its members and other subject matter experts together to brainstorm and analyse the challenges bedeviling the manufacturing sector of the Nigerian economy.
It listed the key areas of interest that would be examined as sub-themes of the conference to include, among others: Review of structure and performance of the manufacturing sector, commercialisation of innovations, incubation and start-ups and value chain financing for product development.
It will also include brainstorming sessions on the promotion of Small and Medium-scale Enterprises (SMEs) for the revival of rural economies, establishment of clusters and retention of skilled workforce and reactivation of the Ajaokuta Steel Complex.
While expressing concern that since the inception of the programme, only the late Tafawa Balewa and ex-President Olusegun Obasanjo had personally attended, Gidari-Wudil said President Bola Tinubu would be the guest of honour at the coming event.
Oborevwori: Hostile Environment, Poor Infrastructure Threats to Doing Business in Nigeria
Meanwhile, Delta State Governor, Hon. Sheriff Oborevwori, has identified harsh and hostile operating environment, poor basic infrastructure, insecurity and policy flip flops as disincentive to both local and foreign investments in Nigeria.
Oborevwori, also remarked that the nation’s tax to Gross Domestic Product (GDP) ratio was low due to harsh operating business environment and called for the removal of institutional bottlenecks to the ease of doing business in the country.
He stated this in his keynote address at the 2023 Federal Accounts Allocation Committee (FAAC) retreat with the theme: “Creating a resilient economy through diversification of the nation’s reserve base,” held at the Events Centre, Asaba, the Delta State.
Represented by his Deputy, Monday Onyeme, Oborevwori frowned at the non committal of the Central Bank of Nigeria (CBN) to be responsive to the clarity and correctional demands made to it by the Federation Account Allocation Committee (FAAC), in relation to the management of the Federation Account.
He also called on the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) to quickly verify the data earlier submitted by the three tiers of government.
According to the Governor, Nigeria’s tax to GDP ratio was comparatively low, about 10-12 per cent, which makes the country vulnerable to disruptions in the global economy.
“A strong, resilient, and competitive economy, requires a flourishing private sector. But there are problems. Structurally, the private sector is largely weak, unorganised, and challenged.
“The operating environment is harsh and hostile to the ease of doing business. Poor basic infrastructure such as electricity, water, transportation, security, are strong disincentives to investments, local or foreign.
“Also, frequent policy flip flops and an inefficient bureaucracy are anything but helpful to the ease of doing business in Nigeria,” he stated.
While commending members of FAAC for their commitment and dedication to duty and for the correction of wrong computations and refunds to oil producing states of the Federation, the Governor added that much work still needs to be done on the payments of 13 per cent derivation, since the coming into force of the Petroleum Industry Act (PIA).
“Since the implementation of the PIA, a lot of concerns have been raised by stakeholders of this sector in respect of the new roles of the Nigeria National Petroleum Company Limited (NNPCL) as it affects inflows of revenue into the Federation Account. It is my hope that this retreat will address these concerns and lay them to rest permanently.
“Tax is the dividend of a thriving private sector. For us to reap the benefits, we need to, as a matter of exigency, remove the institutional bottlenecks that make the cost of doing business in Nigeria unbearably high.
“It is only after we have done this that we can realistically expect to widen the tax base and diversify the economy. It is inevitable that where the cost of doing business is frustratingly high, tax evasion and tax avoidance will be pervasive.
“In conclusion, it is my considered view that the issue of economic diversification must move beyond rhetoric.
“Concrete, measurable steps need to be taken now to facilitate non-oil exports, expand the revenue base, and make economic diversification a reality.
“Here in Delta State, for instance, we have created a Trade and Export Unit to drive the process. Let me also stress that in seeking to facilitate the growth of non-oil exports as canvassed, there is a compelling need to ensure that the oil and gas sector is consistently operating at its optimum,” Oborevwori said.
Earlier in his welcome remark, Minister of Finance and Coordinating Minister of the Economy, Chief Olawale Edun, represented by the Permanent Secretary, Special Duties, Federal Ministry of Finance, Mr. Okokon Ekanem, appreciated Oborevwori and the Delta State Government for accepting to host the retreat.
He said in six months of the Bola Tinubu’s administration, the nation had witnessed important reforms such as petroleum subsidy removal, fiscal and monetary policy reforms aimed at removing multiple taxation, streamlining and simplifying tax administration as well as achieving a single foreign exchange market.
He said the reforms have gained commendations not only by experts in Nigeria but by the international development partners such as the International Monetary Fund, the World Bank among others.
“We believe these reforms are what Nigerians need at this point and we are on course to achieving the objectives of these reforms.
“The Federation Account is witnessing improved revenue inflows since the removal of subsidy from the average of N650 billion monthly to over N1 trillion in the last four months.
“Government has long realised that the petroleum subsidy is unsustainable giving that erodes revenues that should have been used to fund viable expenditures that are critical to the well-being of the populace.
“As we continue to implement our policies, we will remain mindful of the needs and welfare of Nigerians.
“We all know that achieving tax revenue to GDP target of 22 per cent and tax to GDP of 18 per cent by 2026 are part of the terminal objectives of this administration.
“However in doing that, we appreciate the need not to overburden the taxpayers by introducing so many new taxes. What is necessary to be done is to broaden the tax base, simplify and streamline tax administration for ease of collection,” Edun stated.
The retreat is being attended by Commissioners of Finance, Accountants-General of States, NNPCL, Revenue Mobilisation Allocation and Fiscal Commission, Federal Inland Revenue Service, Customs and other revenue generation organs of government.