On Buhari, Sanwo-Olu’s economic prescriptions

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Adewale Kupoluyi

The 2022 Lagos International Trade Fair has offered another opportunity to take a closer look at the nation’s economy as key players in the both public and private sectors were able to identify major challenges and proffered solutions on how things can get better. For the Nigerian President, Muhammadu Buhari, the trade fair was the right time to showcase the nation’s capacity to produce to global standards and to export. The President, who made this known at the opening ceremony, at the Tafawa Balewa Square, Lagos, which was 36th in succession, was put together by the Lagos Chamber of Commerce and Industry (LCCI).

The President, who was represented at the occasion by the Minister of Industry, Trade and Investment, Otunba Adeniyi Adebayo, said that the essence of trade was to connect people and businesses to create value. He said that “Through increased trade, our goals of job creation, Gross Domestic Product growth, increased foreign exchange earnings and reduced insecurity are actualised. The development of export trade takes this a step further and helps our nation reach its economic diversification goals”, he said. Buhari said Nigeria had signed and ratified the agreement establishing the African Continental Free Trade Area (AfCFTA), to boost intra-African trade and integrated continental market, consisting 1.3 billion consumers, saying the country’s international trade was currently doing well with trade surplus in excess of N3.2 trillion.

The President informed that the public sector would continue to drive investment into infrastructural development, encourage access to low-cost financing and provide fiscal incentives to companies wishing to manufacture products for sale. These incentives include three to five-year tax holidays for enterprises as pioneer industries; tax-free operations and capital allowances for agriculture, manufacturing and engineering within the free trade zones. Furthermore, the Federal Government had taken much-needed steps to improve the trading environment through the creation of Special Economic Zones with 17 operational Special Economic Zones (SEZs), and 14 of these are general economic zones that support export processing, large-scale manufacturing, tourism, food processing and oil and gas-related activities, among others.

The Federal Government has also provided funding support through the Central Bank of Nigeria (CBN) and the Bank of Industry (BOI). Specifically, the CBN has initiated programmes to encourage domestic production and exports, some of which include the Anchor Borrowers’ Programme, FGN Special Intervention Fund for Micro, Small and Medium Enterprises (MSMEs) and N150bn Targeted Credit Facility. The Federal Government had equally disbursed a total of N785 billion through BOI from 2019 to 202 and also granted fiscal incentives to businesses, across multiple sectors, through the Federal Ministry of Finance, Budget and National Planning for the Pay-As-You-Earn (PAYE) and Company Income Tax (CIT) taxes are among the lowest in the world while small businesses with an annual turnover of less than 25 million naira, are exempted from paying Company Income Tax. A lower company income tax rate of 20 per cent is also provided for companies whose yearly turnover is between 25 million to 100 million Naira, the President said.

Buhari further told the audience that the Federal Ministry of Industry Trade and Investment was reviewing and updating the country’s National Trade Policy in a bid to firmly establish Nigeria as a worldwide trading hub and a regional leader for the policy seeks to maximise economic output, expand infrastructural development, promote business growth, industrialisation and entrepreneurship, as he called for synergy between relevant parties to enhance trade in Nigeria by creating a hub that is open to all by positioning the country as a gateway and giant in the Sub-Saharan Africa. Speaking at the occasion, the Lagos State Governor, Babajide Sanwo-Olu, applauded the efforts of the leadership of LCCI in bringing together its members, who he said remain the fulcrum of business in Nigeria.

“In Nigeria, this sector is the heartbeat of our industrial and economic development and in Lagos State, MSMEs have significantly contributed to employment creation, value addition, income generation and appreciable poverty reduction. Therefore, there is no doubt in my mind that MSMEs are crucial to our economic growth and stability in achieving the Sustainable Development Goals, particularly in the promotion of creativity and decent work for all. As a government, our administration’s priority is the business sector with particular focus on MSMEs. With a population of over 22 million, Lagos is the 5th fastest growing city in the world, which is why it is an investors’ delight. Lagos accounts for over 25% of the National Gross Domestic Products (GDP), and 65% of Nigeria’s industrial and commercial activities.

“I earnestly urge you (LCCI) to continue to initiate and develop more opportunities for supporting businesses, especially the young corps of entrepreneurs, who have great potentials of re-writing our state’s business history and revitalising Nigeria’s economic fortune. Undoubtedly, our continued partnership cannot, but yield bountiful returns. Let me further assure you that we shall not rest on our oars until business prosperity is guaranteed. This is because our administration is not oblivious of the fact that for us to achieve our dream of becoming Africa’s model megacity by 2025, we must continue to improve our business climate so as to attract more private sector investments, create jobs and increase productivity,” Sanwo-Olu said.

The President of LCCI, Asiwaju (Dr.) Michael Olawale-Cole affirmed that the current edition of the trade fair underscored the importance of relationships and networking among businesses for the purposes of wealth creation as it underlines the value of interactions between producers, service providers and end-users. Olawale-Cole stated that economic conditions had been challenging even as the economy sustains recovery from the Coronavirus disease (COVID-19) pandemic, navigating through shocks from the ongoing Russia-Ukraine war and climate change in the form of devastating floods across the country, as he charged investors to continue to demonstrate resilience and determination to forge ahead despite challenges.

He made a case for non-oil sector development and the need to add value to primary products to improve earnings for both the public and private sectors with the significance of value addition through the Federal Government’s recently-launched Special Agro Industrial Processing Zones (SAPZ) Programme, supported by the African Development Bank (AfDB), Islamic Development Bank, and International Fund for Agricultural Development. The LCCI President stressed that “Our economic and investment policies must be right, and our institutions must be investment-friendly. We need to fix the structural, institutional, policy, and regulatory issues impeding private sector development” while the Chairman, Trade Promotion Board of LCCI, Engr. Leye Kupoluyi also attested to the fact that “In our quest to sustain this legacy project, we have found loyal patrons, sponsors, partners, and exhibitors.”

So, where do we go from here? We simply have to ensure that all actors in the AfCFTA work towards its fruition, the public sector should continue to drive investment by encouraging access to low-cost financing and fiscal incentives, successful review of the National Trade Policy to solidly establish Nigeria as a worldwide trading hub, continued focus on MSMEs to drive the economy, lowering the cost and ease of doing business, strengthening the labour market through harmonious industrial relations, allowing more direct foreign investments, supporting young entrepreneurs, making Nigeria to become Africa’s model megacity, addressing climate change challenges, and tackling food insecurity, diversification of the economy through non-oil sector development, and finally, ensuring that our economic and investment policies are right and backed with strong democratic institutions.

Dr. Kupoluyi writes from the Federal University of Agriculture, Abeokuta (FUNAAB), Ogun State, @AdewaleKupoluyi