NECA: Ongoing Corporate Losses May Spark Shutdown of Businesses

*Urges protesters to embrace dialogue

Dike Onwuamaeze

The Nigeria Employers’ Consultative Association (NECA) yesterday expressed concern that the current rate at which companies are declaring losses might spark another round of business shutdown in the country.

The concern was expressed by the Director General and Chief Executive of NECA, Mr. Adewale-Smatt Ayorinde, in a statement that was captioned “Protests: NECA Calls for Stoppage and Urges Government to Address Economic Contradictions.”

Ayorinde said that the federal government should urgently address the seeming economic contradictions that had been strangulating the organised private sector and stopping it from fulfilling its role as the engine of development.
He said: “With the current rate at which businesses are declaring losses, especially in the real sector, the nation might be in for another round of business shutdown.

“A combined loss of over N533 billion by just four businesses in the sector in H1, 2024 calls for urgent action.
“We urge, most urgently, that government should also give urgent attention to the myriads of contradictions bedevilling the private sector to enable the economy open up and return to the path of rapid growth.”

Oyerinde averred that while the nation grappled with high unemployment rate and low business capacity utilisation, some regulatory agencies were still creating bottlenecks for business growth.
“It is obvious to all that the Mr. Taiwo Oyedele-led Presidential Committee on Tax and Fiscal Policy Reforms (PCTFPR) has done creditably well in engaging critical stakeholders and building consensus on the tax reforms. Some agencies have continued to introduce new levies and other forms of taxes that negate the main reason for the establishment of the PCTFPR.

“The expectations that Dangote Refinery will contribute to reducing the nation’s propensity for fuel importation was almost dashed by regulatory bottlenecks in the oil and gas industry if not for the presidential decision that paved the way for sale of crude to the Dangote Refinery in Naira.
“This is especially worrisome given the significant time and effort Mr. President has invested in wooing foreign direct investors,” NECA stated.

Oyerinde, therefore, urged the government to save the real sector in the midst of multi-dimensional challenges being faced by the economy.
“We urge the government to address the ‘low hanging fruit’ solutions to get the real sector back on track by prioritising among others the issuing of strict directives to regulatory agencies to prioritise regulation over the current seeming unquenchable thirst to impose penalties on already struggling businesses.
“While we are not against pro-growth regulations, we are concerned at the current arbitrariness that seems to pervade the regulatory space is driven by the need for revenue,” he said.

He also called for “the suspension of the sugar tax for the food and beverage (sugar sub-sector) to allow the sector to stabilise and contribute maximally to current efforts at achieving food security.

“Sustaining the supply of crude oil to the Dangote refinery as directed by the president to reduce the nation’s propensity to import fuel and curtailing the rising interest and inflation rates while also addressing ongoing FX volatility.
“All these measures, no doubt, are crucial to unlocking the potential of organised businesses and fast tracking the much needed economic growth,” NECA pointed out.