Managing an economy without a budget is not the best way to run the affairs of a country —-LCCI

From Left: Director General, Lagos Chamber Of Commerce and
Industry (LCCI), Mr Muda Yusuf; President, Babatunde Ruwase; Deputy
President, Mrs Toki Mabogunje and Vice President, Dr. Micheal
Olawale-Cole at the LCCI Quarterly Press Conference on the State of
the Economy in Lagos.

Lagos Chamber of Commerce and Industry, a body of businessmen in Nigeria, has warned that the unnecessary  delay in the passage of the 2018 budget will further worsen the state of the economy. It also decried the frequency of summons of private sectors leaders by the National Assembly and the near absence of local participation of Nigerian businesses in maritime trade.  

At a press briefing in Lagos the President of the Chamber Mr. Babatunde Paul Ruwase, FCA said “we are getting close to half of the year, yet we do not have a budget.  This is certainly not the best way to run the affairs of a country.  The delay in the budgetary process would further entrench the vicious cycle of poor budget implementation, especially the capital component of the budget. The risk is that recurrent spending will be fully implemented while capital projects suffer the usual implementation deficiency.  

“The delay has implications for planning in both the public and private sectors of the economy.  Strategic planning for many organisations takes a cue from the budget structure and the policies that come with it. To the extent that the budget is not in place, uncertainty and associated business risks in the economy are heightened. This is surely not good for investors’ confidence, either from a foreign investors perspective, or from domestic investors standpoint.

“Going forward, there is need for better communication between the national assembly and the executive arm of government.  They need to be on the same page with regard to the fundamental principles of the budget.  It is also necessary to clearly define the boundaries of responsibilities between the executive and legislature in budgetary appropriations to avoid the recurring problem of delays. It is imperative as well for all arms of government to demonstrate an unequivocal commitment to the spirit and letters of the Nigerian constitution and other complementary legislations”.  

Continuing Ruwase said “several federal government properties in Lagos have been completely abandoned. We are worried about the economic and security implications.  It is a colossal economic waste to abandon valuable government assets for many years and allowing such assets to rot away.  Some of these properties include CBN properties in Lagos; the old federal secretariat, old National Assembly complex at the Tafawa Balewa Square, Independence Building that used to house the defence Ministry and former Federal Ministry of Commerce at Tinubu Square. 

Beyond the economic waste that these abandonments represent, many of them serve as hideouts for hoodlums, criminals, and miscreants.  The buildings thus pose security risks to Lagos residents.  We urge the federal government to either return the property to the Lagos State government which is the original owner of the land; or give them out on lease to the private sector”.

According to LCCI President “the value of Nigerian trade with the rest of the world was over $60 billion in 2017.  This should normally impact on the maritime economy.  This volume of trade is one of the highest in the Africa.  Regrettably, the indigenous ship owners are not beneficiaries of this story.  Foreign players have completely dominated the space.  Given the developmental value of indigenous participation in any sector, we would like to stress the need to scale up indigenous participation in the Nigerian shipping sector.  The sector is almost 90 per cent foreign.  Am aware that there have been several policies put in place to ensure the realisation of this objective.  But implementation has been a big issue.  The policies and regulations enacted over the years by the Federal Government include the National Shipping Policy Act of 1987-2003, the Coastal and Inland Shipping (Cabotage) Act of 2003-2007, the Cabotage Implementation Guideline of 2007, the Cabotage Vessel Financing Fund (CVFF) Guideline, the NIMASA Act 2007, the Merchant Shipping Act, and the Nigerian Oil and Gas Industry Content Development Act of 2010. All of these were geared towards 

“The frequency of summons of private sectors leaders by the National Assembly has become a cause for concern. Several Committees of the Senate and the House of Representatives frequently summon the CEOs of the private sector organisations to appear before them. These invitations have become a major distraction to investors, especially because of its frequency; burden of costs and the negative reputational effects. We take exceptions to the frequency and basis of such invitations. The burden of cost of shuttling between Lagos and Abuja and lodging in hotels, the adverse reputational effect of public pronouncement about such invitations, and the general disruptions to business that results from the invitations. The insistence, most times, by the National Assembly, that it is the CEOs that must appear before them, is even more worrisome. Most often, the information, demanded by the National Assembly can be obtained from the statutory agencies of the government.

We appeal to the leadership of the National Assembly properly vet these summons and invitations to private sector players in order to minimise distractions to private investors”.

LCCI also said “The Telecommunications companies in the Nigerian economy are facing very difficult challenges regarding the challenges of securing the Right of Way for the deployment of their fibre optic cables across the country. They face challenges with regards to the multiplicity of taxes/levies. The Telecommunications Association estimates that operators in the sector pay thirty-eight (38) different taxes and levies to the various tiers of government. The telecommunications sector is a very strategic sector for the economy. It is a major facilitator of investment in other sectors.

Therefore, we need to do everything possible to protect the sector from avoidable distractions. The government needs to curb the incidence of multiple taxation, vandalisation of the telecommunications equipment and the unbearable cost of the Right of Way demanded by state governments.  Internet connectivity is critical to the development of all sectors. Internet connectivity has a potentially great impact on the educational development, awareness, and exposure of the youths. It is therefore in the interest of the larger economy to reduce the burden of these distractions and taxations on the telecommunications sector.

“Before now, one of the incentives enjoyed in the renewable energy sector was zero import duty on solar panels. The idea was to motivate the citizens to alternative energy sources, particularly renewable energy. This is also in line with federal government agenda on the diversification of energy sources. The decision to impose the 10% import duty on solar panels conflicts with government’s objectives towards diversification of energy sources. We request that the federal government, through the ministry of finance, directs the Nigerian Customs Service (NCS) to reverse the import duty on solar panels. A major impediment to the adoption of renewable energy is the cost of acquisition of the equipment. Rather than impose a fresh import duty, government should in fact be subsidising renewable energy equipment. We look forward to prompt government response in this respect”.

LCCI further said “the political transition process is beginning to gather steam. The private sector players need to be more active in the entire chain of the electoral process. I encourage the private sector players, entrepreneurs, and the entire citizens of the country to register and obtain their PVCs. They should stand for elections for various offices from the local councils to the Presidency; from councillors to the National Assembly.

“The business community cannot continue to be passive in the political and electoral process. The reality is that the quality of economic policies is impacted by the quality of political governance. It is the economic policies that determines the prosperity or otherwise of our businesses. It is the economic policies that will determine how equitable the society will be and the capacity of the economy to create jobs. It is the social and economic policies that will determine the degree of social justice that we experience as a people. For these and other reasons, we need to play a more active role in influencing the choice of political leaders at all levels of government. 

“This is significant to ensure that those in authority put in place appropriate economic governance framework that will promote investment. We need a political leadership that will build institutions that are supportive of investment. We need to position the private sector as a true engine of growth. We need to develop an economy that rewards hard work, creativity, innovation, wealth creation and entrepreneurship. We need to do away with structures and polices that allow rent-seeking opportunities to flourish. These are the kinds of political and economic environment that we should enthrone at the next election”.

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