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Politics, corruption, oil price top business leaders’ worries in ‘15

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The annual BusinessDay Research and Intelligence Unit (BRIU) Business Confidence Survey shows that top among the worries of business leaders for the year 2015 are factors including potential instability in the political environment, corruption in governance and the recent collapse in oil price.

The poll which was conducted between December 15, 2014 and January 9, 2015 shows that business leaders are also worried about poor electricity supply, the regulatory environment for business and unclear tax systems.

The result of the survey which was administered to 144 business owners and leaders, showed that 82% of them were apprehensive about the unfolding political scenario in the country, 77% expressed concerns about the state of corruption in governance, while 65% pointed to the slump in oil price as a major concern ahead 2015.

Although 59% of them expressed worry over the state of electricity supply in the country, 61% are confident that the power sector reforms of the present administration would yield better results in 2015. Only 39% of respondents expressed doubt that the reforms would succeed.

The regulatory environment and unclear tax regimes operating in the country remain a concern to 35% of business leaders who took the survey. To most of them, government policies have been neutral in pushing their businesses forward in 2014.

The data shows that there is a slight reduction in the number of business leaders who identified electricity/power as their major cost component.

Last year, 62% of respondents who took the poll said electricity was a major component; this year, only 47% of them said electricity is a major component. The bulk of respondents (71%) who took the survey pointed to personnel cost as the new major cost center in their organisations. (Essentially the same business leaders took the survey as last year).

But only 12% of respondents said government policy has had a positive effect on their businesses in the past few years, while to 14% of them said government policy has had a negative effect. To the rest, policy has been largely neutral.

In response to the open ended question which asked the business leaders about changes they would like to see from the regulatory point of view in 2015, they asked for changes including: reduction in fuel pump price, due to the drop in crude oil prices globally; tax reforms that will put an end to double taxation; passage of the Petroleum Industry Bill; lower interest rates from banks; more investment friendly policies.

The survey was taken by business leaders drawn from key sectors including banking and finance, manufacturing, wholesale and retail trade, agriculture, consulting, educational services and oil and gas.

Though the bulk of the respondents reside in Lagos, others are drawn from across the country.

More than half of respondents, 53% have been in business for more than 12 years or more, 18% have been in business for between 8-11 years, while others have operated their business or been in management for between 1-7 years.

Nigeria faces the challenge of general elections in February, on the back of falling oil prices in the international commodity market. There have been several warnings from concerned individuals that the general elections could be marred by violence if politicians do not contain their supporters.

Obodo Ejiro