Business leaders have said removing structural bottlenecks is the biggest hurdle facing Nigeria’s growth prospects in coming years.
The business owners who spoke on Tuesday at a summit organised by Olaniwun Ajayi LP and BusinessDay in Lagos said they were being bogged down by extra costs imposed by the government.
“Businesses are burdened with taxes, levies, and charges. For instance, Nigeria’s port charges are among the highest in the world,” Aliko Dangote, president of Dangote Group, said.
According to Dangote, Nigeria and Africa, in general, are very difficult places to implement projects, a development that scares investors away even though the opportunities may seem very attractive.
“The most important thing is to make sure everybody pays taxes and not hunt the ones complying with taxes with more taxes,” Dangote said.
Dangote highlighted the importance of speedy government decisions in setting up private capital-intensive projects across the country.
He said the federal and state governments must make the business environment very conducive in order to facilitate growth.
“For instance, the delay in picking the final location for the Dangote refinery cost us $500 million,” Dangote said.
“Many investors have been lukewarm because of past experiences and negative conceptions. But there is no way to grow an economy without starting from us.”
For Jim Ovia, the founder of Zenith Bank, Nigeria needs to create a more enabling environment for Nigeria’s fintech sector by removing all the bottlenecks to ease doing business.
“The social media economy is larger than the Nigerian economy as a whole. Nigerian youth can propel Nigeria’s economy with the right incentives in place,” Ovia said. “We need more favourable government policies that can increase investment in Nigeria’s fintech space.”
Aigboje Aig-Imoukhuede, chairman of Coronation Capital, highlighted the importance of fixing infrastructure, a stable power sector and an efficient oil and gas sector in achieving President Bola Tinubu’s target of a $1 trillion economy in the next eight years.
“Nigeria needs a new elite consensus on national development priorities and imperatives to fight poverty,” Aig-Imoukhuede said.
He added: “Nigeria is a country that has great potential, but we face a lot of structural problems. Highly dependent on oil, loss of confidence in the exchange system.
“We need to address all of the bottlenecks if we are serious about revamping the economy.”
In his first month in office, Tinubu’s most significant reforms were the removal of the fuel subsidy and the floating of the naira, a marked departure from years of a currency peg that spooked foreign investors and hurt the economy.
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These policies have been praised by economists and investors for their potential to boost economic growth and attract foreign investment.
To attract more investments, Kalim Shah, senior country manager for Nigeria at International Finance Corporation, advised Nigeria’s economy managers to pay detailed attention to creating processes that allow businesses to strive.
“The process is important; it means that there should be a proper and transparent legal and regulatory framework for industrialisation,” Shah said. “In Columbia, South Africa we have done a series of investments because there was an adequate framework that we can bank on. We would like to replicate the same for Nigeria.”
Concerning infrastructure that can drive industrialisation, Lamido Yuguda, director general of the Securities and Exchange Commission (SEC), said that the Nigerian capital market will aid infrastructural development in the coming months.
Yuguda expressed the belief that the Nigerian capital market, being an organised and specialised financial market that drives capital mobilisation through domestic savings and foreign capital inflows, is well positioned for the realisation of the infrastructure objectives of the nation.
According to him, the benefits of adequate infrastructure in any economy cannot be over-emphasised as they help to speed up development and create wealth.
“If we are able to get well-thought-out infrastructure in this country, it will do a lot of things. It will raise the level of economic activities in the country as a whole and these activities will need people to be employed so they can carry out those activities,” the SEC boss said.
He said the commission is committed to protecting investors and creating an enabling market, emphasising its unwavering resolve to build a robust capital market that is instrumental to driving economic progress in the country.
On the power sector, Fola Fagbule, head of financial advisory at Africa Finance Corporation, said Nigeria’s new decentralised power sector presents a rare opportunity to transform the sector and make it fit for Africa’s largest and most populous country.
He noted that the electricity market in Nigeria is less than $800 billion in annual revenue.
“The key objective of the decentralised power market is to grow the market because we have an electricity deficit and a small market. We need to think of not growing the size but also competitiveness and cost, putting the customers at the front of the affairs,” Fagbule said.
