Chudi S. Ubosi
In the last few days the media has been awash with the story of a N150 billion intervention fund to be made available to selected companies in the industrial sector.
The manner in which the news was splashed across most of the dailies, one would almost get the impression that the long awaited solution to our
industrial decline had arrived. N150 billion, ($1billion). is a lot of money by any standards, but what exactly would it solve, and when that money does run out, would further handout funds be forthcoming from the government? But then, better this than nothing.
Occasionally, one gets the feeling that those in government hardly understand the plethora of issues facing those doing business in Nigeria. It is obvious that there is communication between the industrialists and those in government. If there was none, a N150 billion naira intervention fund would hardly have come about. However, the challenges of industrialists/industries are beyond money. Yes, these funds might scratch the surface of the catalogue of problems, but truth be told it would make limited impact if a lot of other problems are equally not tackled.
The key issues for industries and industrialists today is a hostile operating environment with everything keyed to discourage business. No business today operates in Nigeria without a generating plant, in fact, several generating plants. It is one of the first line expenditure heads that must be provided for in the budgetary estimates for any startup or existing business.
Public power supply remains a mirage despite numerous promises of past and present governments. Nigerian businesses spend a humongous amount of money on generating plants and diesel. A recent media report states that the Federal Aviation Authority of Nigeria (FAAN) spent over N25 billion (Twenty-five billion naira) on diesel across our airports in Nigeria in the last five years – an average of N5 billion per annum. This sad scenario is replicated in varying degrees in thousands of businesses and industries nationwide. The implication is that funds that should go to the bottom line are used to basically keep the organization running daily. Add to this associated losses as a result of staff malpractices, down times, etc and you will get a clearer picture of the depth of the problems faced due to unavailability of public power supply.
Another major challenge that industries face is that of harassment from public officials in one guise or another – environmental, tax, immigration, customs, etc. Very little needs to be written about this, as it would be pretence for anyone in government to state that they are unaware of the excesses of these officials.
Laws, real and imagined are invoked and (mis)interpreted to suit specific situations and circumstances, and where these do not suffice, or achieve desired objectives, violence and threats of lockup of staff and outright closure of the organizations come into play.
Coupled with this is the regular harassment of branded vehicles and delivery trucks by local government sanctioned touts on the nations pot holed, police check points dotted death traps that pass for roads and expressways. The harassment is usually with the aim of collecting all manner of levies, – legal and illegal all in the name of revenue drive. It is as if one is dealing with gangsters who have carved up various sections of the nations roads as their territories and no one can control or call them to order. Failure to pay results in the seizure of vehicles and goods.
In the final analysis one is left with the impression that these quasi government agencies and the people they represent would rather see industries fold up than add value to the system by operating.
Luckily, Nigerians all understand the name of the game and how to play it, but it is usually at great cost. There is of course the issue of inconsistency in the policies of government. Items, banned in one breadth are allowed to be imported in another breadth. Waivers are also given to special and close friends of the government to import the same items that have been banned. This is usually done to the detriment of enterprising investors who would have been encouraged to invest hundreds of millions of Naira on production lines to meet local demand for the banned item.
In other cases, items banned, somehow find their way into our country through our ‘watertight’ borders, and then the customs officials make a big show of going to the markets and shops to seize these items, intimidate and arrest people. In the meantime factories are closing down; entrepreneurs lose their investments and are ruined financially and other ways. Staffs are thrown onto the streets and unemployment continues to rise out of control. Many examples abound in the textile and tyre manufacturing sectors of the economy. Of course there is the lack of credit for industrial production and expansion and where this is available it is at usually very stiff terms and high interest rates. The financial institutions themselves cannot be wholly blamed for toeing that line. They have had their fingers burnt several times as a result of government not seeing through their promises on the basis of which they (banks) have financed industrialists.
The absence of quality dedicated and intelligent work force at all levels remains another issue for businesses. It is indeed so bad that Nigerians currently rely mainly on artisans from neighboring West African States to provide quality service. At the management levels, it is a mixture of prayers and the introduction of several (unnecessary) levels of checks and balances to ensure quality output. The problems in the educational sector have begun to manifest in the quality and work ethics of graduates of the system.
There is no gain saying that the operating environment for businesses at all levels in Nigeria remains very challenging. Part of the solution would be the spending of money to correct ills, better services and infrastructure, but as a people, and as a nation, we must understand that the solution to problems does not always lie in throwing money at them. Sometimes, most times, the solution remains in strengthening existing institutions and structures and getting them to work effectively and efficiently. Sometimes, even money does not achieve that. The threat of and enforcement of penalties and sanctions for erring officials would suffice.