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Tag: LCCI

  • LCCI releases economic outlook for 2020

    The Lagos Chamber of Commerce and Industry (LCCI) has projected a high cost of doing business in 2020.

    Its Director-General, Dr Muda Yusuf, made the projection in the LCCI 2019 Economic Review and Outlook For 2020 made available to newsmen on Thursday in Lagos.

    He attributed the projected high cost to poor infrastructure, multiplicity of levies, excessive regulations, among others.

    Yusuf said that while the nation may have recorded improvement on the Ease of Doing Business Ranking due to some recent policy measures, realities on ground would continue to differ if the highlighted challenges were not properly addressed.

    He said that the performance of the trade sector in 2020 would be shaped by the direction of government policies.

    Yusuf anticipated that the manufacturing sector would continue to benefit from the Central Bank of Nigeria’s aggressive credit push.

    He, however, predicted that competition between foreign and local producers would fade on prolonged closure of land borders.

    The director general said that headline inflation was expected to trend higher in 2020.

    He said this would be driven by implementation of new minimum wage and continued closure of the land border.

    Yusuf said that higher Value Added Tax rate of 7.5 per cent and the early disbursement of funds for budget implementation following the return of the budget cycle would also be contributory factors.

    “We expect economic growth to remain subdued at around 2 per cent by 2020 as consumer demand, as well as private sector investment, will most likely remain weak.

    “We are of the view that failure by government to fix structural constraints with regards to fixing power challenges and rehabilitating deplorable road networks, will perpetuate the poor productivity and performance of the sector.

    “In our opinion, continued protectionist measures of government will most likely limit growth in 2020.

    “Elsewhere, the level of the country’s engagement in Africa Continental Free Trade Area (AfCFTA) scheduled to kick-off July 1, 2020, will also impact the performance of trade sector.

    “As a sustainable solution, it is imperative to fix the fundamental issues of high cost of domestic production, the prohibitive cost of cargo clearing at the Lagos ports, prohibitive import tariffs, high cost of logistics within the economy, and border policy capacity,” he said.

    On the performance of the agricultural sector, the Director-General projected improved credit flow to agriculture on the back of proposed increase in deposit money banks’ loan to deposit ratio to 70 per cent.

    Yusuf expressed the view that prolonging closure of the land borders would further add impetus to agricultural output in 2020.

    “The monetary value of agriculture output has been on the upward trajectory, rising 40 per cent quarter-on-quarter to N5.41 trillion between July and September from N3.86 trillion between April and June, compared with N3.60 trillion in the first quarter.

    “The CBN, like it did in 2019, will maintain status quo by not relenting in supporting the sector with much-needed funds in ensuring that the wide gap between local demand for food and supply is bridged.

    “However, risk factors to our prognosis include security challenges in the North-east zone; a major food producing region in the country, resurgence in herders-farmers clash in the North-central region.

    “Overall, we expect the sector to sustain its upward growth trajectory in 2020,” he stated.

  • LCCI condemns clamp down on auto dealers

    LCCI condemns clamp down on auto dealers

    The Lagos Chamber of Commerce & industry (LCCI) has berated the Nigerian Customs Service (NCS) for clamping down on auto shops nationwide.

    In a statement signed by LCCI Director General, Muda Yusuf, the group regretted the intimidating manner the shops, which is a vital segment of the economy, were closed for three weeks.

    He said some of the dealers are leaders in the industry, representing reputable global brands in the country and contribute to tax and customs revenue. He noted that the audit exercise could have been done better by not embarrassing some of them who have been found to be tax compliant

    In his words: “There is nothing wrong with an audit exercise; what is not right is the ominous and intimidating manner the exercise was carried out. The premises of the companies were sealed for about three weeks, paralysing their entire operations. We believe that the audit exercise could still be carried out without the sealing up of the business premises of the companies for that length of time.”

    Muda said regulatory and enforcement powers should be exercised with due propriety and courtesy. According to him, it is imperative for regulatory and enforcement institutions to extend courtesy to investors in the economy in their quest to validate compliance or otherwise of statutory requirements.

    He said: “Investors should not be treated as culpable when infractions have not been proven against them. Verification processes should be done with minimal disruptions to the operations of companies. Sudden sealing up of companies for about three weeks has profound consequences for businesses such as reputational cost to the company with implications for the goodwill of the company, disruption of business transactions of the company and risk to international and domestic business relations resulting from perception problems created by the sealing up of business premises, especially for dealers of leading global automobile brands.”

    He said the action of Customs could cause embarrassment to the management and shareholders of the company with negative signaling effect to investors.

    Muda appealed to regulatory and enforcement agencies to demonstrate greater courtesy in their interactions with investors in the economy as they are critical stakeholders creating jobs, generating revenue, and stabilizing the social environment through the engagement of citizens. Hostile regulatory actions are not in consonance with the quest for job creation and poverty reduction he added.

    The LCCI chief observed that disputations around valuation and classification of consignments have become issues of concern to the private sector and has assumed a critical dimension creating disruptions and uncertainties in the international trade process.

    He appealed to the Presidency in conjunction with the ease of doing business office should come up with a framework for valuation and classification which is fair, equitable, transparent and consistent. He further called for an urgent need for an independent dispute resolution framework to speedily take decisions on disputes arising from valuation and classification of consignments.

    He frowned at what he called a disproportionate focus by customs on revenue generation a disposition that is hurting investors and the citizens. He regretted that the drive to meet revenue targets is pushing up cost of intermediate products and other inputs imported by investors.

     

  • LCCI faults ‘short notice’ of CBN’s cashless policy, demands more time, enlightenment

    LCCI faults ‘short notice’ of CBN’s cashless policy, demands more time, enlightenment

    The Lagos Chamber of Commerce and Industry (LCCI) has asked for more time for the implementation of the cashless policy.

    In a statement, its Director- General, Muda Yusuf said the latest Central Bank of Nigeria’s (CBN) circular should have given a much longer notice to economic players, including enlightenment.

    He said the effective date is extremely short as the circular was dated September 17 with effective date of September 18, noting that it is just a notice of one day.

    He said: “This would have short term disruptive effects. We implore the CBN to give at least two months to allow for players in the economy to adequately prepare themselves. This is particularly so for investors who are major players in the retail segment of the economy. It is difficult to justify the decision to penalise cash depositors. The emphasis should be on discouraging cash transactions and withdrawals, which is more in consonance with the objective of the policy.”

    Yusuf said the cashless policy is no doubt a commendable initiative which has impacted significantly on the economy but insisted that financial institutions should continuously strive to raise the level of confidence of citizens in the electronic payment platform.

    The LCCI chief said this would entail the reduction in ATM fraud, internet fraud and other fraudulent activities on the various electronic platform.

    He called for more enlightenment and incentives to encourage the citizens to use electronic payment systems. According to him, the transitioning process requires robust enlightenment, consultation and stakeholder engagements.

  • Passage of CAMA by Senate A Lifeline To Small Businesses, Says LCCI boss

    President of the Lagos Chamber of Commerce and Industry (LCCI), Mr. Babatunde Paul Ruwase has lauded the passage of the Companies and Allied Matters (CAMA) Act amendment Bill by the Senate, and said the development will greatly boost and increase the viability of small businesses in the country.

    Ruwase gave the commendation when he led other executive members of the Chamber on a courtesy visit to the President of the Senate, according to a statement by the Chief Press Secretary to the President of the Senate, Sanni Onogu, in Abuja.

    The LCCI boss noted that the passage of the CAMA amendment Bill is a major step towards enhancing the business environment in the country.

    He said that the Bill, when signed into law, would reduce the burden of reporting obligations for small businesses, reduce time and cost of setting up a company and also facilitate the transition of many informal sector players to the formal sector of the economy.

    He said that the amendment is timely in view of present economic realities as the country cannot “afford a static legislation in a dynamic business and economic environment.”

    Ruwase further stated that the beauty of a legislation lies in how well it is aligned with contemporary realities and thanked the President of the Senate for the “efforts of the Red Chamber in promoting private sector development and for collaboration.”

    “The fact that your Excellency has a private sector background has brought a lot of value to the content and processes of legislation,” he added.

    In his remarks, the President of the Senate, Dr. Abubakar Bukola Saraki, thanked the LCCI and its members for their contributions to the nation’s economic growth.

    He noted that the 8th Senate has been keen on working with the private sector to improve the nation’s economy and business environment right from its inception in 2015.

    He said that the Senate with the collaboration of major players in the private sector had identified a number of critical laws that required urgent review to improve the ease of doing business in the country, most of which have now been passed and signed into law.

    “This is a Senate that is very pro-business. We believe that our role as a government is to create enabling environment that will allow businesses to thrive.

    “Even in the area of infrastructure, our focus has been on how we can pass laws to enable private sector participation. With our reforms in railways, ports and road construction and maintenance, we hope that the private sector will play a bigger role with the bills we have passed.

    “There are some bills that are still pending like the Investment and Securities bill where there is a major amendment that we hope to pass very soon. We are also looking into the reform of the Stock Exchange to make it more attractive and also in line with global best practice,” he said.

    Saraki said the aim of the Senate is to strengthen the economy and be able to provide jobs for the youth through legislation.

  • Lagos Land Use Charge against democratic ideals – LCCI

    Sanctions to defaulters under the Reviewed Land Use Charge Law of Lagos are too severe and not in tandem with democratic ideals.

    The President of Lagos Chamber of Commerce and Industry, Mr. Babatunde Ruwase, made the observation in Lagos on Friday during a stakeholders’ forum on Lagos Land Use Charge Law, 2018.

    He said that while the chamber would not encourage or support any form of infractions of the law, the sanctions must be proportional and fair.

    The Land Use Charge law stipulates a 25 per cent increase in charge if payment is not made between 45 and 75 days.

    It also prescribed a 50 per cent increase after 105 days and a 100 per cent increase if payment is not made between 75 and 105 days.

    The law further prescribed that a property shall be liable to enforcement if payment is not made after 135 days of notice.

    “There would be instances where the citizens are willing to pay but just do not have the capacity to pay, given the state of the economy.

    “The Nigerian economy is only just gradually recovering from recession. Many companies are yet to return to profitability.

    “Industrial capacity utilisation has declined, purchasing power is still very weak, occupancy rate in many commercial and residential properties are still very low.

    “All of these have adversely impacted the returns on investment in property market and points to the fact that current market value of property may not necessarily reflect the rental income for the property,” Ruwase said.

    He said that only 300,000 property were paying the charge, while 700, 000 property were identified for tax payment.

    According to him, emphasis should be on getting more property into the tax net, rather than imposing additional burden on those currently on the database.

    He urged government to explore the platform presented by VAIDS to capture more property owners into the net.

    Ruwase suggested that implementation of the law be suspended, while the grey areas should be sorted out in the interest of fairness, equity and natural justice.

    According to him, there is no evidence to show that adequate dissemination of information to critical stakeholders had been done; noting that the conditions stipulated for law review occurred before its implementation.

    He said that stakeholders were concerned that assessed value used for computation of the law was high and difficult to justify.

    According to him, the business community appreciates government’s efforts in investing in infrastructure and security and businesses are willing and ready to pay their tax.

    He appealed to the government to create a tax environment that would be fair, equitable, inclusive, transparent and investment friendly.

    Lagos State Commissioner for Finance, Mr. Akinyemi Ashade, said the law was aimed at entrenching a regime of self assessment that would allow property owners to make their own calculation and know their rate with the help of professional valuers.

    Ashade said various reliefs had been made available to payers, including a general 40 per cent relief for all property liable to LUC payment.

    According to him, property of N10m and below constitute 75 per cent of property owners in the state and are expected to pay N5,000 per annum as land use charge.

    Ashade said the new law also established an Assessment Appeal Tribunal which authorises the adoption of Alternative Dispute Resolution in resolving disputes concerning LUC, provided the appeal was lodged within 30 days after the receipt of the notice.

     

  • Nigeria’s economy dying from multiple taxation, infrastructure deficit – LCCI

    Nigeria’s economy dying from multiple taxation, infrastructure deficit – LCCI

    The Director of Research and Advocacy of the Lagos Chamber of Commerce and Industry (LCCI), Dr Vincent Nwani, stated on Wednesday that multiple taxation and infrastructure deficits were harming the nation’s economy.

    Nwani, an economist, made the observation in a paper entitled: “Regulations Undoing Diversification of the Economy” at the Breakfast Policy Dialogue, organised by the Initiative for Public Policy Analysis (IPPA) in Lagos.

    IPPA is a public policy think-tank.

    The News Agency of Nigeria (NAN) reports that the theme of the event is: “Moving from Regulations to Policy Action–the Challenges’’.

    “So many policies in Nigeria are hindering the nation’s drive for diversification.

    “In all indicators, ease of getting credit, electricity, registering a business, resolving disputes, exporting and importing among others are challenges and we are not doing well at all.

    “A lot of people are not doing business in Nigeria because of security and so many businesses have closed down because of insecurity.

    In terms of stability of laws and inconsistency of law, we are also ranked very low: 181 out of 191 countries.

    “On infrastructure, whether it is power, road or rail, we are also one of the worst in the world. Our index is 177 out of 190 countries.

    “And on economic competitiveness, we are 124 out of 140 from the World Economy Forum.’’

    According to Nwani “from everything we look at, we are not doing well even though we are the largest country by population in Africa.

    “I can tell you, regulation is the problem. Multiplicity of regulations, taxes and reforms are issues.

    “There are some sectors we count up to about 80 different types of taxes, especially in oil and gas and manufacturing and this is why a lot of businesses are moving from formal to businesses that are invisible.’’

    Speaking on the nation’s ports, the economist said that multiplicity of agencies, cargo clearance bottlenecks and other delays were causing serious problems at the ports.

    According to him, due to these factors, some of cargoes that should land in Nigerian ports often head to other countries.

    Also speaking, a member of the House of Representatives, Hon. Olubunmi Odebunmi, said that the economy was picking up and that the Federal Government was working hard to prevent job losses.

    Odebunmi, the Chairman of the House Committee on Information, who was represented by his aide, Mr Al-Marruf Ajibolu, said that government was also tackling the problems of poor infrastructure and epileptic power supply.

    The Executive Director of IPPA, Mr Thompson Ayodele, told NAN that the body was promoting advocacy to ensure that businesses were not killed through legislation.

    “What can be done is to see other ways by which businesses can be regulated and make them more responsible to the society.

    “If we close businesses with legislations, we tend to see smugglers filling up the vacuum and even the regulators will not have control over it again.

    “So, instead of sniffing life out of existing manufacturers, why can’t we explore ways in which we can make them more responsible?’’

     

     

    NAN

  • Nigeria will lose N150bn daily should PENGASSAN, NUPENG embark on proposed strike – LCCI tells FG

    The Lagos Chamber of Commerce and Industry (LCCI), has warned that the economy would lose an estimated N150 billion daily, if the proposed strike by PENGASSAN and NUPENG is not averted.

    The Director-General of LCCI, Mr Muda Yusuf, disclosed this in an interview with newsmen on Monday in Lagos.

    Yusuf said that it would not be a good development for an economy that was just emerging from recession.

    TheNewsGuru.com reports that the two unions had threatened to embark on an indefinite strike over delay in the payment of N800 billion subsidy arrears to oil marketers.

    Yusuf urged the Federal Government to engage the unions and propose a credible payment plan to settle the arrears.

    He noted that the consequences of the proposed strike would be severe because of the strategic and critical nature of the oil and gas sector.

    “It would paralyse the chain of logistics in the economy as economic activities are driven largely by road transportation, both for commuting and freight.

    “It will impact on revenue as the upstream sector would be affected as well. It would impact the power sector which is largely powered by gas,“he said.

    The LCCI boss noted that the fuel subsidy phenomenon had become a recurring distraction in the management of the country’s economy.

    “It is regrettable that government has over the years got itself entangled in a problem which should not have arisen in the first place,“ he said.

    He alleged that the country’s economy had suffered serial scandals and monumental corruption in the oil and gas sector because of the phenomenon of petrol subsidy.

    “We have consistently argued that the government should completely decouple itself from the business of importation, refining, transportation and retailing of petroleum products.

    “This arrangement has created considerable distortions and stagnated private investment in the downstream sector because these are enterprises that the private sector is best suited to manage, “he said.

    Yusuf said that government has no business fixing prices and subsidising the players.

    He said that in spite of the monumental problem the economy had from the subsidy regime, government has not taken urgent steps to put an end to price fixing for PMS.

    “The economy cannot sustain this arrangement. The current debt of N800 billion is 151 per cent of the total capital allocation for the Federal Ministry of Works, Power, and Housing in the 2017 budget.

    “It is 1,568 per cent of the capital allocation to health; it is 305 per cent of the capital allocation to Federal Ministry of Transportation; and 1,600 per cent of the capital allocation to education.

    “This raises vital questions about the optimality and efficiency of resource allocation and utilisation by government,” he said.

    He called for speedy passage of the Petroleum Industry Bill (PIB), adding that it will help to normalise the oil and gas sector.

    Yusuf urged the government to replicate the telecoms sector model in the oil and gas industry, adding that it would free resources for investment in critical infrastructures like power, roads, the railway, health and education sector.

    He stressed that the model would improve product availability, eliminate fuel queues, and create more jobs for the teeming youth in the downstream oil sector.

  • May 29: Expert advocates total deregulation of downstream sector

    May 29: Expert advocates total deregulation of downstream sector

    Mr Muda Yusuf, the Director General, Lagos Chamber of Commerce and Industry (LCCI), has called for total deregulation of the downstream sector to boost effective service delivery in the oil and gas industry.

    Yusuf made the call at the News Agency of Nigeria Forum in Lagos on Sunday while assessing President Muhammadu Buhari’s two-year administration.

    Yusuf said that many problems confronting the industry were policy related and this had made the potential in the industry unlocked.

    He said that policy issues, as far as the oil and gas industry was concerned, had to be addressed quickly in the bid to diversify the economic base.

    According to him, it is important to address the problem immediately so that “we do not go back to another subsidy crisis”.

    “We have a lot of potential in that sector, but have not been able to unlock it because of issues surrounding oil and gas policies.

    “So, while we talk about diversifying the economy, we need to sort out the challenges within the sector.

    “This will help the country get the best in terms of investment, jobs and foreign exchange.

    “We are losing a lot because of the way the sector is being managed,” Yusuf said.

    The LCCI boss said that the country ought to have been exporting refined petroleum products to neighbouring countries, not importing.

    According to him, the government talks about diversifying the economy, yet the opportunities in the oil and gas have not been fully tapped.

    “The downstream sector of the oil and gas industry is in pains. As I speak with you now, subsidy claims is about N500 billion which has not been paid.

    “Private investment is not coming to that sector due to excessive regulations.

    “Deregulation may not be politically popular, but the government cannot continue to fix a price for a product it has no control.

    “Right now, many of those who have invested in tank farms are facing challenges because their huge investment in that sector is trapped.

    “This is because many of the tank farms do not have petroleum products and yet they cannot import petroleum products and sell at their own cost because the law pegged the price of petrol at N145 per litre,’’ Yusuf said.

    He said the current monopoly enjoyed by the NNPC on importation of petroleum products had made the market uncompetitive.

    Yusuf said that some of the revenues which ought to have gone into the federation account were being used to subsidise petroleum products.

    “Total deregulation of the downstream sector remains the best option and the only way to address product importation challenges.

    “It may not be politically popular, but unless the government does that a lot of our resources may be going back to subsidy payment.

    “We have been in the oil business for over 50 years, yet no private sector refinery.

    “That is why up to date, we are still importing 80 per cent of our petroleum products.

    “About 30 to 40 per cent of our foreign exchange goes into the importation of petroleum products. With due respect, the normal bureaucracy process is not cut-out to manage such enterprise,” he said.

    Yusuf said that private sector driven policies would bring in many refineries which would reduce the stress on importation and create more jobs for Nigerians.

    He said that government should encourage competition among importers, stressing that “where there is no competition, there will be challenges of either private or public monopoly”.

    He advised government to expedite action on full deregulation of the downstream sector to attract competition.

    Yusuf also advised the government to address delays in contract procedure in the sector because most times it took up to three years to take decision on an investment in the upstream.

    “There are the lamentations about those in the government agencies to deal with.

    “If it is purely a private investment, not a Joint Venture (JV), of course, you do your business model, take a decision on your investment and within a year, you are through.

    ”However, the expectation is that the PIB will be able to sort all that, but we need to move fast because the situation on ground is not helping the economy at all,” he said.

  • BoI, LCCI partner on MSMEs development

    The Bank of Industry (BoI) has reaffirmed its commitment to the development of the Micro, Small and Medium Enterprises (MSMEs) sector in enhancing sustainable economic growth.

    The acting Managing Director of BoI, Mr Waheed Olagunju, said in Lagos on Tuesday during a MSMEs forum that significant attention should be given to MSMEs to enhance their sustainability and societal impact.

    The forum was organised by BoI in partnership with the Lagos Chamber of Commerce and Industry (LCCI).

    Olagunju said that BoI would continue to support projects with potential to create significant jobs and value creation opportunities geared towards facilitating a robust and integrated economic growth.

    According to him, BoI will drive MSMEs penetration through its cluster strategy, strategic partnership with Microfinance banks and business development consultants, customer engagement and capacity building.

    He said that the bank was increasing its nationwide footprints to reach more businesses through its 21 offices located in different parts of the country.

    According to him, the bank’s strategic partnership of matching funds with various state governments, agencies and high net worth individuals is designed to support SMEs at five per cent interest rate.

    Olagunju said that BoI had N11 billion fund in its matching fund partnership with 21 state governments.

    He said that the bank was managing over 10 special funds valued at N1 trillion for Federal Government institutions and high net worth individuals under various schemes.

    Olagunju was represented by Mr Yinka Adegboye, Group Head, Strategy and Corporate Transformation of the bank.

    Also, Mr Sola Oyetayo, Chairman, Trade Promotion Board, LCCI, said that the partnership with BoI was strategic in building the capacity of MSMEs operators to the various financial opportunities and business support available in the country.

    He said that the alliance would translate to increased job creation, poverty reduction, export promotion and increased contribution to nations Gross Domestic Products (GDP).

     

    NAN