The private sector has no business with making the macroeconomic environment tolerable for investments to flow in and thrive. This is the responsibility of the government.
Nigerians have long suffered the responsibility of micromanaging their everyday affairs at their own expense, even after making their compulsory contribution to the government in the form of taxes and other levies.
Unfortunately, the government officials use the proceeds from the collected taxes to enrich their greedy and ever-needy pockets. This is the main reason why many Nigerians opt to relocate to other countries whose governments are more responsible for state affairs.
Eulogising about how rich and prosperous Nigeria is as a nation and the human and non-human blessedness that the African giant possesses will not serve a good purpose at this point.
However, a more compelling line of thought would be to guesstimate what the country’s fate will be in the next 10 to 50 years if the current situation persists, despite the potential that the country has.
From tales of unchecked corruption and impunity, sovereign wickedness and cluelessness, cruel killings in all shades and forms, fiscal recklessness, monetary impotence, to playing politics with the lives of over 200 million Nigerians, the country’s future lies purely in the hands of those who will be willing to take uncommon risks to save the reputation of the country’s heritage.
Saving Nigeria’s celebrated but fast-ebbing economy relies heavily on a mixture of humane, political, economic, social, cultural and religious interventions, all of which must be carefully provoked to avoid further catastrophe.
Many agree that the temperature of the business environment of any nation goes a long way to predict how other areas of state affairs will fare. Therefore, keeping Nigeria’s business environment conducive to profitable activities is a necessary line of action that the government must prioritise.
Over the years, however, Nigeria’s business environment has been tampered with by forces that have ensured that the country’s macroeconomic stance remains humbled.
Nigeria’s consistently weak macroeconomic vitals, which have manifested in the form of energy and price disturbances, market frictions, currency fluctuations, inefficiency in the production and supply structure, institutional feebleness and policy inconsistencies, have imposed costly implications on the country’s business space.
Nowadays, too many businesses are leaving the country’s shores for smaller but safer havens. Investors are now more averse to channelling new investments into the country. At the same time, existing outfits are either being scaled down or completely transplanted.
Between 2009 and 2011, for instance, at least 800 companies shut down their operations in Nigeria due to a poor business climate. Those who remained in the country could barely cover their operational costs and remained seriously ailed throughout their operation.
The exit of these companies from Nigeria was majorly caused by an unpredictable regulatory environment, which made it difficult for investors and business owners to make a decent forecast, poor infrastructure and epileptic power supply, which made operational costs higher than anticipated.
Furthermore, the increase in the prices of petroleum products, the incidence of multiple taxation, smuggling activities, lack of access to investment finance, insecurity and supply bottlenecks at the ports further exacerbated the challenge of Nigeria’s harsh economic environment.
As foreign investments struggled to survive, public investments also could not keep up, and they continued to constitute a drain to the nation’s sovereign purse.
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To remedy the current situation and attract new investments into the country, the government must wake up to its core responsibilities by making the necessary commitments that will help reverse the current trend.
With power, for instance, electricity generation nationwide is below 5,000 megawatts. The World Bank’s recommendation for an industrialised Lagos State alone is 19,000MW of electricity if growth must be sustained.
According to the Ministry of Mineral Resources and Energy, as of 2021, South Africa generates up to 58,095MW of electricity. Hence, the power grids must be optimally functional to drive sustainable industry in Nigeria. Also, the appropriate amount of power that will drive easy industrial production must be generated, distributed and utilised.
Supply chain disruptions at the seaports can be muted if the government can introduce discipline and provide the appropriate infrastructure to ease the administrative processes therein.
The presence of multiple agents such as the Nigerian Customs, Immigration, Police, Nigeria Security and Civil Defence Corps, Department of State Services, National Agency for the Prohibition of Trafficking in Persons, Fire Brigade, Nigerian Ports Authority and others usually constitute a nuisance to the free flow of processes at the ports. These officials are often positioned towards rent-seeking aims, resulting in delays in the clearing process.
Hence, an effective ports administration is required to eliminate corrupt practices that constitute bottlenecks in the importation and exportation processes.
Many industries and SMEs are usually a target of multiple taxation. This makes it difficult for these businesses to function correctly. Simultaneous tax levies by the federal, state and local government authorities usually bore business operators, making many under-declare their books.
Due to multiple taxation, higher operational and production costs will be passed onto the final consumers, but this may lead to a recessive consumption response from the market. The government must harmonise its fiscal process to accommodate all taxable items along the chain of operations without leaving room for rent-seekers to take advantage of people in business.
If this happens, companies will find it less challenging to produce, and the prices of their output will be fair.
